M/s Sri Dashmesh Academy Trust, Ropar V. CIT(E), Chandigarh

ITA 1257/CHANDI/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 4133 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 24-08-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: J K GARG
• Keywords: Gift; Revenue expenditure; Capital expenditure
• Section: 143(3); 12A; 12AA; 12; 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, B, CHANDIGARH , ! . .., # $, %& BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ./ ITA NO. 1257CHD/2017 (U/S 12AA) M/S SRI DASHMESH ACADEMY TRUST, ANANDPUR SAHIB, ROPAR THE CIT (EXEMPTIONS), CHANDIGARH ./PAN NO: AAEFTS3279F / APPELLANT /RESPONDENT /ASSESSEE BY : SHRI TEJ MOHAN SINGH, ADVOCATE / REVENUE BY : SH. J.K.GARG, CIT DR ! ' # /DATE OF HEARING : 31.07.2018 $%&'() # / DATE OF PRONOUNCEMENT : 30. 10. 2018 %'/ ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE APPELL ANT-ASSESSEE NAMELY SRI DASHMESH ACADEMY TRUST AGAINST THE DENIAL OF EXEMPTION U/S 12A OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT' ) BY THE COMMISSIONER OF INCOME TAX (EXEMPTIONS), CHANDIGARH [HEREINAFTER REFERRED TO AS CIT(E)] VIDE HIS ORDER DATED 30.06.2017. 2. THE AIMS AND OBJECTS OF THE ASSESSEE SOCIETY ARE TO SET UP AND CARRY ON THE ADMINISTRATION AND MANAGEMENT OF AN ACADEMIC INSTITUTION AT ANANDPUR SAHIB TO BE KNOWN AS SRI DASHMESH ACADEMY FOR IMPARTING ITA NO.1257/CHD/2017- SRI DASHMESH ACADEMY TRUST, ROPAR 2 EDUCATION OF HIGH STANDARD IN GENERAL AND TRAINING FOR ADMINISTRATIVE SERVICE AND ARMED FORCES IN PARTICULAR TO THE CHILD REN OF PERSONS DOMICILED IN PUNJAB. IT HAS BEEN SUBMITTED THAT THE ASSESSEE IS AN ONGOING ENTITY AND HAS BEEN IN OPERATION FOR NEARLY 40 YEARS. THE APPE LLANT-SOCIETY FILED APPLICATION BEFORE THE CIT (E) FOR REGISTRATION U/S 12A OF THE ACT SO AS TO BE ABLE TO CLAIM EXEMPTION U/S 11 OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). IT HAS BEEN FURTHER SUBMITTED BY THE L D. COUNSEL FOR THE ASSESSEE THAT THE LD. CIT(E) REJECTED THE APPLICATI ON OF THE APPELLANT- ASSESSEE MAINLY FOR THE REASON THAT THERE WAS NO DI SSOLUTION CLAUSE IN THE MEMORANDUM OF ASSOCIATION (MOA) / TRUST DEED OF T HE APPELLANT- ASSESSEE. THE LD. CIT(E) OBSERVED THAT IN CASE OF T RUST / SOCIETY ESTABLISHED FOR CHARITABLE OR RELIGIOUS PURPOSES, T HE INCOME OR ANY PROPERTY OF SUCH TRUST OR INSTITUTION SHOULD BE APPLIED FOR SUCH PURPOSES ONLY AND THAT NO PART OF INCOME OR ANY PROPERTY OF TRUST OR THE SOCIETY SHOULD BE USED OR APPLIED DIRECTLY OR INDIRECTLY FOR THE BENE FIT OF ANY PERSON REFERRED TO IN SUB SECTION (3) OF SECTION 13 I.E. THE AUTHOR OF THE TRUST OR FOUNDER OF THE INSTITUTION, ANY FAMILY MEMBER OF SUCH AUTHOR O R FOUNDER, ANY TRUSTEE OF THE TRUST OR MANAGER OF THE INSTITUTION, ANY REL ATIVE OF SUCH AUTHOR OR FOUNDER PERSON OR MEMBER TRUSTEE OR MANAGER AND EVE N ANY CONCERN IN WHICH ANY OF SUCH PERSON HAS A SUBSTANTIAL INTEREST INCLUDING A PERSON WHO HAS MADE SUBSTANTIAL CONTRIBUTION TO THE TRUST OF THE SOCIET Y. 3. THE LD. CIT(A) (E) OBSERVED THAT IN THE ABSENCE OF DISSOLUTION CLAUSE, THERE WAS A REASONABLE PRESUMPTION THAT TH E ASSETS AND LIABILITY OF THE SOCIETY WILL BE DISTRIBUTED AMONGST THE MEMBERS OF THE SOCIETY IN CASE THE SOCIETY STOPS ITS OPERATION OR DISSOLVED. HE, THEREFORE, OBSERVED THAT ITA NO.1257/CHD/2017- SRI DASHMESH ACADEMY TRUST, ROPAR 3 THE PROVISIONS OF SECTION 13(1)(C) OF THE ACT WERE CLEARLY ATTRACTED IN THIS CASE. HE FURTHER OBSERVED THAT EARLIER THE SOCIETY WAS DENIED REGISTRATION IN THE YEAR 1981 BY THE THEN COMMISSIONER OF INCOM E TAX(E), PATIALA STATING THAT THE APPLICANT WAS AN EDUCATIONAL INSTI TUTION COVERED U/S 10(22) OF THE INCOME-TAX ACT, 1961 AND THAT THE PROVISIONS OF SECTIONS 11 & 12 OF THE ACT WERE NOT APPLICABLE IN THIS CASE. THEREAFT ER, THE ASSESSEE SOCIETY DID NOT FILE ANY APPLICATION FOR 36 YEARS. THE SOCI ETY THEREAFTER HAS BEEN CLAIMING DEDUCTION U/S 10(23C) (IIIAB) OF THE ACT AS THE ENTIRE CAPITAL COST OF THE SCHOOL / ACADEMY HAS BEEN MET BY THE MINISTR Y OF DEFENCE AND GOVERNMENT OF PUNJAB. THAT THE SOCIETY RECEIVE THE GRANTS REGULARLY FROM THE GOVERNMENT FOR ALL SPECIFIC NEEDS TO MEET THE C APITAL AND REVENUE EXPENDITURE. THAT THERE WAS NO EXPLANATION ON THE PART OF THE SOCIETY AS TO HOW THE CASE OF THE APPELLANT WAS STILL NOT COVER ED U/S 10(23C)(IIIAB) OF THE ACT. FINALLY, THE LD. CIT (E) BECAUSE OF THE ABSENCE OF THE DISSOLUTION CLAUSE IN THE TRUST DEED AND FINDING THE EXPLANATIO N FROM THE ASSESSEE SOCIETY TO THE QUERIES RAISED, AS NOT PLAUSIBLE, DI SMISSED THE APPLICATION OF THE APPELLANT FOR REGISTRATION U/S 12 OF THE ACT. 4. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE OBJECTION RELATING TO NON-INCORPORATION OF DISSOLUT ION CLAUSE HAS BEEN ADDRESSED NOW AND A DISSOLUTION CLAUSE HAS BEEN ADD ED IN THE MOA, HENCE, THE ASSESSEE TRUST BE GRANTED REGISTRATION U /S 12A OF THE ACT. HE IN THIS RESPECT HAS PRODUCED A LETTER DATED 5.2.2018 ALONG WITH AMENDED MEMORANDUM OF ASSOCIATION AND HAS PLEADED THAT THE SOCIETY, DURING THE MEETING OF ITS MEMBERS HELD ON 17.7.2017 UNDER THE CHAIRMANSHIP OF SARDAR PARKASH SINGH BADAL, HAS AMENDED THE MEMORA NDUM OF ASSOCIATION ITA NO.1257/CHD/2017- SRI DASHMESH ACADEMY TRUST, ROPAR 4 WHEREIN A DISSOLUTION CLAUSE (XVI) HAS BEEN ADDED. THE CONTENTS OF THE SAID LETTER DATED 05.02.2018 ARE REPRODUCED AS UNDE R:- 2740893 0172-2740303 SRI DASMESH ACADEMY TRUST NO.SDA/TRUST H.NO. 60, SECTOR -5, CHANDIGARH ______________________________________________ NO. SDA.MOA/2018 05 FEB 2018 TO THE REGISTRAR, REGISTRAR OF FIRMS& SOCIETIES PUNJAB, SECTRO 17, CHANDIGARH SUB:- ADDITON/ AMENDMENT TO MEMORANDUM OF ASSOCATION SRI DASMESH ACADEMY TRUST 1. REFERENCE DISCUSSION HELD IN YOUR OFFICE IN JAN 201 8 ON THE SUBJECT 2. FOLLOWING REGISTERS CONTAINING MINUTES OF BOARD OF GOVERNESS MEETING HELD SINCE 1978 ONWARDS ARE SENT HEREWITH A DDITION DESIRE:- 3. (A) REGISTRAR CONTAINING BOARD OF GOVERNORS MEETING FROM SER NO. 01 TO 06. (B)REGISTER CONTAINING BOARD OF GOVERNORS MEETING F ROM SER NO.07 TO 19. 2. LAST MEETING OF BOARD OF GOVERNORS WAS HELD ON 15 MAY 2007 (MS-3) 3. TERM OF BOARD OF GOVERNORS WAS NOT EXTENDED FU RTHER BY THE MEMBERS OF THE DASMESH TRUST. 4. DURING THE MEETING OF MEMBER OF SRI DASMESH ACAD EMY TRUST HELD ON 17 JULY 2017, UNDER THE CHAIRMANSHIP OF SARDAR P ARKASH SINGH BADAL, IT WAS DECIDED TO ADD THE AMENDMENT TO MEMOR ANDUM OF ASSOCIATION VIDE SUB HED (ITEM NO. III) OF THE MINU TES, COPY OF MINUTES ARE ENCLOSED. 5. COPY OF LETTER SIGNED BY SARDAR PARKASH SINGH BA DAL FOR OBTAINING APPROVAL OF AMENDED MEMORANDUM OF ASSOCIATION, ALO NG WITH ITS ENCLOSURE ARE FORWARDED HEREWITH FOR YOUR ACTION PL EASE. THE ADDITION / AMENDMENT HAS BEEN CARRIED OUT IN SUB HE AD (XVI,. PARA 2 OF MEMORANDUM OF ASSOCIATION. AN EARLY ACTION IS REQUESTED PLEASE SD/- (.) (EMPHASIS SUPPLIED BY US) ITA NO.1257/CHD/2017- SRI DASHMESH ACADEMY TRUST, ROPAR 5 5. THE SCANNED AMENDED MEMORANDUM OF ASSOCIATIO N ATTACHED WITH THE AFORESAID LETTER IS REPRODUCED AS UNDER:- ITA NO.1257/CHD/2017- SRI DASHMESH ACADEMY TRUST, ROPAR 6 ITA NO.1257/CHD/2017- SRI DASHMESH ACADEMY TRUST, ROPAR 7 ITA NO.1257/CHD/2017- SRI DASHMESH ACADEMY TRUST, ROPAR 8 6. A PERUSAL OF THE AFORESAID AMENDED MEMORANDUM OF ASSOCIATION REVEALS THAT VIDE CLAUSE 4(A) THE MOA, THE FOLLOWIN G PERSONS, SUBJECT TO THEIR AGREEING IN WRITING, HAVE BEEN DECIDED TO BE ADMITTED TO THE MEMBERSHIP OF THE TRUST. ITA NO.1257/CHD/2017- SRI DASHMESH ACADEMY TRUST, ROPAR 9 1. S. SURJIT SINGH RAKHRA, EX-CABINET MINISTER, PUNJAB 2. S. BALWINER SINGH BHUNDAR, HON'BLE MEMBER OF THE RA JYA SABHA 3. GP CAPT AMARJEET SINGH GREWAL, FRGS (RETD), CHANDIG ARH 4. AIR MARSHAL MANMOHAN SINGH(RETD), AVSM, PVSM, VR C, CHANDIGARH 7. THE AFORESAID PERSONS HAVE APPENDED THEIR SIGNAT URES AGAINST THEIR NAMES CONVEYING THEIR ACCEPTANCE FOR BEING ADMITTED TO THE MEMBERSHIP OF THE TRUST. 8. THIS AMENDED MOA / RESOLUTION HAS BEEN SIGNED BY THE FOLLOWING PERSONS:- 1 S. PARKASH SINGH BADAL SON OF LATE S.RAGHURAJ SINGH, VILL & PO BADAL DISTT. MUKTSAR 2 S. SURJIT SINGH RAKHRA S/O SH. KARTAR SINGH, RAKHRA PALACE, PATIALA 3 S. BALWINDER SINGH BHUNDAR,M.P. KOTHI NO.256,SECTOR 11-A, CHANDIGARH 4 AIR MARSHAL MANMOHAN SINGH (RETD), PVAS, AVSM, VR C, S/O S.IQBAL SINGH, KOTHI NO.198, SECTOR 18A, CHANDIGARH 5 GP CAPT AMARJEET SINGH GEREWAL, FRGS (RETD) S/O S.DALIP SINGH, H.NO. 5782, DUPLEX MODERN HOUSING COMPLEX, MANIMAJRA (UT), CHANDIGARH 6 DR JASBIR SINGH AHLUAWALIA, IAS (RETD), S/O S.KARTAR SINGH AHLUAWALIA KOTHI NO. 1607, SECTOR 33, CHANDIGARH ITA NO.1257/CHD/2017- SRI DASHMESH ACADEMY TRUST, ROPAR 10 7 S.AMARJEET SINGH SANDH, IAS (RETD), S/O S.GURBAX SINGH, 17-B, MODEL TOWN, PATIALA 8 SMT.SATWINDER KAUR DHILIWAL, EX.MP, KOTHI NO. 965, PHASE IV, SAS NAGAR, (MOHALI) 9 MR VISHAL SINGH, S/O S. SATNAM SINGH, KOTHI NO.502, SECTOR 10-C, CHANDIGARH 9. SURPRISINGLY, THE SAID MOA, WHEREBY, THE FOU R PERSONS AS MENTIONED ABOVE HAVE BEEN DECIDED TO BE ADMITTED AS MEMBERS OF THE TRUST AND WHO HAVE PUT THEIR SIGNATURES AGAINST THE IR NAMES CONVEYING THEIR CONSENT FOR ADMITTING THEM TO MEMBERSHIP OF TRUST, ARE THEMSELVES SIGNATORY OF THE SAID AMENDED RESOLUTION. THE FACT ON THE FILE REVELS THAT THE SAID RESOLUTION IS NOT A VALID RESOLUTION AS TH E PERSONS WHO WERE PROPOSED TO ADMITTED AS MEMBERS OF THE TRUST ARE THEMSELVES SIGNATORY OF THE AMENDED MOA MAKING WHOLE OF THE DOCUMENTS AS INVALID AND ILLEGAL. 10. NOW COMING TO THE ORIGINAL MEMORANDUM OF ASSOCI ATION (MOA) OF DATED 17.02.1978, CLAUSE 4 (E) OF THE MOA, SPEAK S ABOUT THE FIRST MEMBERS OF THE GOVERNING BODY TO WHOM THE MANAGEMEN T OF THE AFFAIRS OF THE TRUST IS ENTRUSTED. THE SAID ORIGINAL MOA IS REPRODUCED AS UNDER:- MEMORANDUM OF ASSOCAITION 1. THE NAME OF SOCIETY IS SRI DASHMESH TRUST HEREINA FTER FOR THE SAKE OF BREVITY REFERRED TO AS THE TRUST 2. THE OBJECTS FOR WHICH THE TRUST IS ESTABLISHED ARE TO SET UP AND CARRY ON THE ADMINISTRATION AND MANAGEMENT OF A N ACADEMIC INSTITUTION AT ANANDPUR SAHIB TO BE KNOWN AS SRI DASHMESH ACADEMY HEREINAFTER CALLED THE ACADEMY FOR ITA NO.1257/CHD/2017- SRI DASHMESH ACADEMY TRUST, ROPAR 11 IMPARTING EDUCATION OF HIGH STANDARD IN GENERAL AND TRAINING FOR ADMINISTRATIVE SERVICES AND ARMED FORCES IN PAR TICULAR TO THE CHILDREN OF PERSONS DOMICILED IN PUNJAB. 3. THE POWERS AND FUNCTIONS OF THE TRUST ARE :- 4. I) TO REGULATE THE EXPENDITURE AND TO MANAGE THE ACCOUNTS OF THE ACADEMY II) TO RECEIVE GRANTS, SUBSCRIPTIONS AND DONATIONS FOR THE PRUPOSE OF THE ACADEMY. III) TO MAKE RULES AND REGULATIONS FOR THE CONDUCT OF MEETING AND AFFAIRS OF THE TRUST AND TO ADOPT AND VARY THEM FROM TIME TO TIME. IV) TO PURCHASES, TAKE ON LEASE OR ACCEPT AS GIFT O R OTHERWISE ANY LAND WHICH MAY BE NECESSARY OR CONVENIENT FOR T HE PURPOSE OF THE TRUST AND ON SUCH ITEMS AND CONDITIO NS AS THEY MAY THINK FIT AND PROPER; V) TO CONSTRUCT, PURCHASE, TAKE ON LEASE OR ACCEPT AS A GIFT OR OTHERWISE, ANY BUILDING OR BUILDINGS WHICH MAY BE N ECESSARY OF SUITABLE OF THE PURPOSES OF THE TRUST AND ON SUC H ITEMS AND CONDITIONS AS THEY MAY THINK FIT AND PROPER; VI) TO SELL, EXCHANGE, LEASE OR OTHERWISE DISPOSAL OF ANY PROPERTIES OF THE TRUST, MOVABLE OR IMMOVABLE ON SU CH TERMS AS MAY THINK FIT AND PROPER; VII) TO EXERCISE CONVEYANCE, TRANSFER OR GOVERNMENT SECURITIES, RECONVEYANCES, MORTGAGES, LEASES, BOND AND AGREEMENTS IN RESPECT OF PROPERTY, MOVABLE OR IMMO VABLE BELONGING TO THE TRUST OR TO BE ACQUIRED FOR THE PU RPOSE OF THE TRUST; VIII) TO APPOINT IN ORDER TO EXECUTE ANY INSTRUMENT OF TRANSACT ANY BUSINESS OF THE TRUST, ANY PERSONS AS ATTORNEY OF THE TRUST WITH SUCH POWERS AS THEY MAY DEEM FIT; IX) TO ENTER INTO AN AGREEMENT WITH CENTRAL GOVERNM ENT OR STATE GOVERNMENTS FOR RECEIVING GRANTS; X) TO RAISE AND BORROW MONEY ON BONDS, MORTGAGES, PROMISSORY NOTES AND OTHER OBLIGATIONS OR SECURITIE S FOUNDED OR BASED UPON ALL OR ANY OF THE PROPERTIES AND ASSE TS OF THE ITA NO.1257/CHD/2017- SRI DASHMESH ACADEMY TRUST, ROPAR 12 TRUST OR WITHOUT ANY SECURITIES AND UPON SUCH TERMS AND CONDITIONS AS THEY MAY THINK FIT; XI) TO MAKE, DRAW, ACCEPT ENDORSEE AND NEGOTIATE TH E CENTRAL GOVERNMENT AND OTHER PROMISSORY NOTES, BILLS, CHEQU ES OR OTHER NEGOTIABLE INSTRUMENTS; XII) TO INVEST THE FUNDS OF THE TRUST IN OR UPON SU CH SECURITIES AS THEY MAY DEEM FIT AND FROM TIME TO TIME TRANSPOS E ANY INVESTMENT. XIII) TO MAKE SUCH RULES AND BYE-LAWS AS THEY MAY F ROM TIME TO TIME, CONSIDER TO BE NECESSARY FOR REGULATING T HE MANAGEMENT OF THE ACADEMY FOR THE AFFAIRS OF THE TR UST; XIV) TO DELEGATE ALL OR ANY OF ITS POWERS TO THE GO VERNING BODY OR TO ANYONE OR MORE MEMBERS OF THE ITS BODY O R ITS OFFICERS; AND XV) TO DO ALL SUCH OTHER ACTS AND THINGS AS MAY BE REQUISITE IN ORDER TO FURTHER THE OBJECTS OF THE TRUST. 4 (A) THE SIGNATORIES TO THIS MEMORAUDUM OF ASSOCIA TION MAY ADMIT TO THE MEMBERSHIP OF THE TRUST THE FOLLOWING PERSONS SUBJECT TO THEIR AGREEING IN WRITING TO JOINT THE M EMBERSHIP OF THE TRUST:- 1. COL P.S.GILL, LTD. GOVERNOR, GOA, PANAJI 2 AIR CHIEF MARSHAL ARJAN SINGH, 7-A, KAUTHILYA MARGE NEW DELHI 3. SHRI YAGYA DATT SHARMA, M.P. 30, DR.RAJENDRA PRASAD ROAD, NEW DELHI 2. MAJ.GEN A.K.LUTHRA, 52, SECTOR 4, CHANDIGARH (B) IN THE EVENT OF ANY VACANCY ARISING IN THE MEMB ERSHIP OF THE TRUST, DUE TO ANY CAUSE WHATSOEVER, THE REMA INING MEMBERS MAY SUPPLY THE VACANCY BY CO-OPTING ANY PER SONS WHO MAY AGREE IN WRITING TO JOIN THE MEMBERSHIP OF THE TRUST. C) ONE OF THE MEMBERS OF THE TRUST MAY BE APPOINTED TO BE AN HONORARY SECRETARY OF THE TRUST. ITA NO.1257/CHD/2017- SRI DASHMESH ACADEMY TRUST, ROPAR 13 D) THE TRUST WILL BE SUPREME BODY FOR REGULATING TH E AFFAIRS OF THE ACADEMY. (E) THE NAME AND ADDRESSEES AND OCCUPATIONS OF THE FIRST MEMBERS OF THE GOVERNING BODY TO WHICH THE RULE OF THE TRUST, THE MANAGEMENT OF ITS AFFAIRS IS ENTRUSTED A REA:- 1. CHIEF MINISTER, PUNJAB, (CHAIRMAN, (EX-OFFICIO) 2. FOUR MEMBER FROM AMONGST THE TRUSTEES TO BE ELECTED BY THEMSELVES: 3. ONE MEMBER TO BE NOMINATED BY THE PUNJAB DEFENCE & SECURITY RELIEF FUND COMMITTEE ; 4. THREE, ADMINISTRATIVE SECRETARIES OF PUNJAB GOVT. (EDUCATION, FINANCE AND DEFENCE SERVICES WELFARE DE PTT. AS EX-OFFICIO MEMBERS ; 5. TWO EMINENT EDUCATIONISTS TO BE NOMINATED BY THE TR UST; 6. SECRETARY OF THE TRUST AS HONY. MEMBER SECRETARY OF THE GOVERNING BODY; 7. DIRECTOR OF THE ACADEMY AMENDMENT: THE FOLLOWING AS SUB PARA (B) TO EXIST ING PARA (4) (B ) IF A TRUSTEE FAILS TO ATTEND THREE CONSECUTIV E MEETINGS OF THE TRUST, HIS /HER NAME MAY BE DELETED FROM THE L IST OF TRUSTEES ON .. WE THE SEVERAL PERSONS, WHOSE SIGNATURES, OCCUPATIO NS AND ADDRESSES ARE GIVEN HEREUNDER ARE DESIROUS OF BEING FORMED INTO AN ASSOCIATION IN ACCORDANCE WITH THE PROVISIO NS OF SOCIETIES REGISTRATION ACT, 1860, IN PURSUANCE OF T HIS MEMORANDUM OF ASSOCIATION AND IN TESTIMONY OF THIS, WE HAVE SUBSCRIBED OUR RESPECTIVE NAMES AND SIGNATURES HERE TO ON THE 17 TH DAY OF FEBRUARY IN THE YEAR 1978: 1 S. PARKASH SINGH BADAL SON OF LATE S.RAGHURAJ SINGH, VILL & PO BADAL DISTT. FARIDKOT 2 GURCHARAN SINGH TOHRA, M.P. 12-A, WESTERN COURT, NEW DELHI ITA NO.1257/CHD/2017- SRI DASHMESH ACADEMY TRUST, ROPAR 14 3 COL. P.S. GILL LT. GOVERNOR, GOA, PANAJI 4 AIR CHIEF MARSHAL ARJAN SINGH 7-A,KAUTIYLA MARG, NEW DELHI 5 LT GEN GARTAJ SINGH, KOTHI NO. 80,SECTOR 5, CHANDIGARH 6 SH. BALAWANT SINGH, FINANCE MINISTRY, PUNJAB 7 YAGNA DATT SHARMA, M.P. 30, DR.RAJENDRAPRASAD ROAD NEW DELHI 8 DASANT SINGH KHALSA,M.P. 22, WESTORN COURT, NEW DELHI 9 RAVI INDER SINGH, SPEAKER, PUNJABVIDHAN SABHA, CHANDIGARH 10 AJIT SINGH SARHADI, ADVOCATE GENERAL, PUNJAB CHANDIGARH 11 MAJ.GEN A.K.LUTHRA, 32, SECTOR 4, CHANDIGARH SD/- WITNESSES 11. ALONGWITH THE SAID MOA OF 1978, THERE IS ATTA CHED AMENDED REGULATION, WHICH READS AS UNDER:- AMDNDED REGULATION GOVERING BODY 1. THE MANAGEMENT OF THE AFFAIRS OF THE SRI DASMESH ACADEMY TRUST WILL BE ENTRUSTED TO A BOARD OF GOVER NOR, HEREINAFTER REFERRED TO AS THE BOARD. 2. (A) THE BOARD SHALL COMPRISE OF THE FOLLOWING MEMBE RS:- 1 CHIEF MINISTER, PUNJAB CHAIRMAN SD/ 2 FOUR MEMBER FROM AMONGST THE TRUSTEES TO MEMBERS SD/ ITA NO.1257/CHD/2017- SRI DASHMESH ACADEMY TRUST, ROPAR 15 BE ELECTED BY THEMSELVES 3 PRINCIPAL AND DIRECTOR OF THE ACADEMY MEMBER SECRETARY SD/ 4 SECRETARY TO THE GOVERNMENT OF PUNJAB, EDUCATION DEPARTMENT EX-OFFICIAL MEMBER SD/ 5 SECRETARY TO THE GOVERNMENT OF PUNJAB, FINANCE DEPARTMENT -DO- SD/ 6 SECRETARY TO GOVERNMENT OF PUNJAB, DEFENCE SERVICE WELFARE DEPARTMENT -DO- SD/ 7 TWO EMINENT EDUCATIONISTS TO BE NOMINATED BY THE TRUST CO-OPTED MEMBER SD/ 8 ONE MEMBER TO BE NOMINATED BY THE PUNJAB DEFENCE AND SCRUTINY RELIEF FUND COMMITTEE. NOMINATED MEMBER SD/ 9 MEMBER SECRETARY OF THE TRUST EX-OFFICIO MEMBER SD/ (B) THE CHIEF MINISTER OF THE PUNJAB SHALL BE EX-OFFICIO CHAIRMAN OF THE BOARD AND THE PRINCIPAL AND DIRECTO R OF SRI DASHMESH ACADEMY SHALL BE EX-OFFICIO MEMBER SECRETARY OF THE BOARD. C) THE TERM OF THE BOARD SHALL BE THREE YEARS (D) THE SEAT OF A NOMINATED MEMBER OF THE BOARD SHA LL BECOME VACANT IF HE / SHE DIES. RESIGNS, BECOME OF UNSOUND MIND, IS DECLARED INSOLVENT, IS CONVICTED OF CRIMIN AL OFFENCE, INVOLVING MORAL TURPITUDE, CEASES TO BE A MEMBER OF THE COMMITTEE/TRUST ACCEPTS ANY PAID JOB OR OFFI CE OF PROFIT IN THE ACADEMY OR ENTERS INTO ANY CONTRACT O F RELATIONSHIP WITH THE ACADEMY THEREBY HIS INTEREST AS MEMBER CONFLICTS WITH HIS DUTY AS SUCH OR IS REMOVE D BY THE TRUST FROM THE MEMBERSHIP OF THE BOARD. DESIGNATION 3. A MEMBER OTHER THAN AN EX-OFFICIO MEMBER MAY RESIGN HIS OFFICE BY A LETTER ADDRESSED TO THE CHAI RMAN AND ITA NO.1257/CHD/2017- SRI DASHMESH ACADEMY TRUST, ROPAR 16 SUCH RESIGNATION SHALL TAKE EFFECT AS SOON AS IT HA D BEEN DELIVERED TO THE LATTER. FILLING UP VACANCES 4 (A) ANY VACANCY IN THE BOARD SHALL BE FILLED IN THE SAME MANNER AS IS PROVIDED IN REGULATION NO.2. (B) NO ACT DONE, OR PROCEEDINGS TAKEN BY THE BOARD SHALL BE INVALID MERELY ON THE GROUND OF ANY VACANCY OF DEFE CT IN THE CONSTITUTION OF THE BOARD OR OF ANY DEFECT OR IRREG ULARITY IN THE NOMINATION OF ANY PERSON ACTING AS MEMBER THERE OF OR OF ANY DEFECT OR IRREGULARITY IN SUCH ACT OR PROCEDURE NOT EFFECTING THE MERITS OF THE CASE. POWER OF THE BOARD 5 THE BOARD SHALL HAVE ALL POWERS WHICH MAY BE NECESS ARY OR EXPEDIENT FOR THE ACHIEVEMENT OF THE OBJECTS OF THE TRUST. THESE POWERS SHALL INCLUDE POWER TO CREATE ANY POST FOR CARRYING OUT THE PROSES OF THE TRUST AND TO EMPLOY ANY OFFICER AND SERVANT INCLUDING THE HEAD OF THE EDUCATIONAL I NSTITUTION AND OTHER TEACHING STAFF, TO FIX THEIR GRADE OF PAY , EMOLUMENTS AND OTHER TERMS AND CONDITIONS OF SERVICE, TO SUSPE ND, REMOVE, DISMISS OR OTHERWISE PUNISH ANY OFFICER OF SERVANT SO APPOINTED AND TO ABOLISH ANY POST WHEN IN THE OPINI ON OF THE TRUST IT IS NO MORE REQUIRED. POWERS AND DUTIES OF THE CHAIRMAN OF THE BOARD. 6 (A) THE CHAIRMAN SHALL HAVE POWER TO CONVENE MEETIN GS OF THE BOARD AT ANY TIME WHEN HE CONSIDERS IT NECESSAR Y. (B) IN AN EMERGENCY, WHICH, IN THE OPINION OF THE C HAIRMAN REQUIRES THAT IMMEDIATE ACTION SHOULD BE TAKEN, THE CHAIRMAN SHALL TAKE SUCH ACTION AS HE DEEMS NECESSARY BUT SH ALL REPORT HIS ACTION TO THE BOARD AT ITS NEXT MEETING. (C) THE CHAIRMAN SHALL EXERCISE SUCH OTHER POWERS A S MAY BE DELEGATED BY THE BOARD. (D) IN THE ABSENCE OF THE CHAIRMAN, AT ANY MEETING OF THE BOARD, THE MEMBERS PRESENT SHALL SELECT ONE FROM AM ONGST THEMSELVES TO PRESIDE AT THE MEETINGS. ITA NO.1257/CHD/2017- SRI DASHMESH ACADEMY TRUST, ROPAR 17 POWERS AND FUNCTIONS OF THE MEMBER SECRETARIES. (A) THE MEMBER SECRETARY OF THE TRUST SHALL BE THE CHIE F ADMINISTRATIVE OFFICER OF THE TRUST AND BE RESPONSI BLE FOR THE SETTING UP OF THE ENTIRE CAMPUS AND CARRYING OU T ALL THE DIRECTIVES OF THE TRUST. (B) THE MEMBER SECRETARY OF THE BOARD OF GOVERNORS SHAL L BE RESPONSIBLE FOR THE ACADEMIC WING INCLUDING ITS ADMINISTRATION AND SHALL DEAL WITH THE BOARD OF GOVERNORS FOR THE SAID PURPOSE. (C) THE MEMBER SECRETARIES SHALL BE RESPONSIBLE FOR ENSURING THAT ALL MONEYS ARE EXPANDED ON THE PURPOS E OF WHICH THEY ARE GRANTED OR ALLOTTED. (D) THEY SHALL PREPARE AND SUBMIT TO THE TRUST AND THE BOARD FOR THEIR APPROVAL, ANNUAL STATEMENT OF THE ACCOUNTS AND BUDGET ESTIMATES; (E) THEY SHALL KEEP THE RECORD OF THE MEETING OF THE T RUST AND THE BOARD. (F) THEY SHALL EXERCISE SUCH POWERS AND PERFORM SUCH D UTIES AS MAY BE DELEGATED AGREED OR ASSIGNED TO THEM BY T HE TRUST AND THE BOARD EITHER GENERALLY OR SPECIFICALL Y . MEETING OF THE BOARD OF GOVERNORS (8) ( A) THE BOARD SHALL MEET AT LEAST THRICE A YEAR AND A COPY OF THE PROCEEDINGS OF EACH MEETING SHALL BE FU RNISHED TO THE CHAIRMAN AS SOON AS POSSIBLE AFTER THE MEETI NG. (B) THE QUORUM OF THE MEETING OF THE BOARD WILL BE FIVE. (C) THE CHAIRMAN, IF PRESENT, SHALL PRESIDE OVER TH E MEETING OF THE BOARD AND IN HIS ABSENCE, THE MEMBER S PRESENT SHALL ELECT ONE FROM AMONGST THEMSELVES TO PRESIDE. SUITS BY OR AGAISNT THE TRUST 9. ALL SUITS, COMPLAINTS AND APPLICATIONS BY THE TR UST IN ANY COURT OR OFFICE WHATSOEVER SHALL BE INSTITUTED OR F ILED IN NAME OF TRUST UNDER THE SIGNATURES OF THE MEMBER SECRETA RY OF THE TRUST / BOARD OF GOVERNORS OR IF FOR ANY CAUSE THE Y ARE UNABLE TO DO SO ON ACCOUNT OF PHYSICAL ABSENCE OR OTHERWIS E, ANY OTHER MEMBER OF THE TRUST / GOVERNING BODY. BODY MAY DO S O, IF AUTHORISED BY A RESOLUTION OF THE TRUST DULY PASSED AT AS MEETING CONVENED FOR THE PURPOSE. ITA NO.1257/CHD/2017- SRI DASHMESH ACADEMY TRUST, ROPAR 18 FUNDS OF THE TRUST 10 ALL FUNDS OF THE TRUST SHALL BE INVESTED IN A BA NK OF BANKS OR IN FINANCIALLY SOUND COMPANIES OFFERING BEST RAT E OF INTEREST. THE MEMBER SECRETARY OF THE TRUST ALONGWITH OTHER T RUSTEES OR MEMBERS OF THE BUILDING COMMITTEE TO BE NOMINATED F OR THIS PURPOSE SHALL BE ENTITLED TO AND AUTHORISED TO DEAL WITH THE NAME. FOR THE PROSPERS OF DEALING WITH BANK OR BANK S OR WITH GOVERNMENT IN REGARD TO FUNDS AND INVESTMENTS OF TH E TRUST, THEY SHALL BE AND ARE HEREBY AUTHORISED TO SIGN, ENDORSE , NEGOTIATE AND OTHERWISE DEAL WITHAL SUCH ACCOUNTS, FUNDS OR I NVESTMENTS. 11 NON-OFFICIAL MEMBERS SO THE TRUSTS AND THE BOARD WILL BE REIMBURSED BY THE TRUST AND THE ACADEMY THEIR TRAVE LLING ALLOWANCE IN RESPECT OF THE JOURNEY UNDERTAKEN TO A TTEND SUCH COMMITTEES THEREOF, OR IN CONNECTION WITH THE BUSIN ESS OF THE TRUST AND THE ACADEMY AS MAY BE PROVIDED IN THE RU LES TO BE MADE IN THIS BEHALF BY THE TRUST AND THE BOARD. N ON-OFFICIAL MEMBERS SHALL NOT BE ENTITLED TO GET ANY OTHER REMU NERATION. 12 THE TRUST AND THE BOARD SHALL CAUSE REGULAR ACCO UNTS TO BE KEPT OF ALL ITS MONEYS AND PROPERTIES AND TO HAVE T HEM AUDITED BY QUALIFIED AUDITORS. 13 SUCH OTHER MATTERS AS HAVE NOT BEEN PROVIDED FOR ABOVE WILL BE REGULATED BY RULES TO BE MADE BY THE TRUST. IT IS CERTIFIED THAT THIS IS A TRUE COPY OF THE REG ULATIONS OF THE TRUST . SD/- (PARKASH SINGH BADAL) CHAIRMAN SRI DASMESH ACADMY TRUST. SD/ AIR CHIEF MARSHAL ARJAN SINGH MEMBER, SRI DASHMESH ACADEMY TRUST SD/- SARDAR BASANT SINGH KHALSA MEMBER, SRI DASHMESH ACADEMY TRUST MAJOR GENERAL SD/- A.K. LUTHERA MEMBER, SRI DASHMESH ACADEMY TRUST ITA NO.1257/CHD/2017- SRI DASHMESH ACADEMY TRUST, ROPAR 19 12. IT IS PERTINENT TO MENTION THAT THE SAID CLAUSE 4 (E) TILL DATE HAS NOT BEEN AMENDED AS THE SIMILAR CLAUSE 4(E) HAS ALSO BE EN FOUND MENTIONED IN THE ALLEGED AMENDED MOA, AS REPRODUCED IN EARLIE R PARA OF THIS ORDER. A PERUSAL OF THE ABOVE CLAUSE REVEALS THAT THE CHIEF MINISTER PUNJAB IS THE EX-OFFICIO CHAIRMAN OF THE GOVERNING BODY, WHICH ME ANS THAT THE CHAIRMAN OF THE GOVERNING BODY / BOARD OF GOVERNORS HAS TO BE A PERSON WHO IS THE SERVING / PRESENT CHIEF MINISTER OF PUNJ AB AND NOT TO BE A PRIVATE PERSON IN HIS INDIVIDUAL NAME OR CAPACITY. 13. EVEN AS PER AMENDED REGULATION ATTACHED WITH TH E ORIGINAL MEMORANDUM OF ASSOCIATION 1978, IT HAS BEEN RESOLVE D THAT THE MANAGEMENT OF THE AFFAIRS OF SRI DASHMESH ACADEMY TRUST SHALL BE ENTRUSTED TO BOARD OF GOVERNORS WHOSE CHAIRMAN WILL BE THE CHIEF MINISTER OF PUNJAB AND FURTHER THAT OTHER EX.OFFICI O OFFICERS OF THE GOVERNMENT AS MENTIONED ABOVE, WILL ALSO BE PART OF THE BOARD OF GOVERNORS. HOWEVER, A PERUSAL OF THE LETTER DATED 5 .2.2018 ADDRESSED TO THE REGISTRAR OF FIRMS AND SOCIETIES, PUNJAB (AS REPROD UCED IN EARLIER PARA) REVEALS THAT THE LAST MEETING OF THE BOARD OF GOVER NORS WAS HELD ON 15.5.2017 AND THAT THE TERM OF BOARD OF GOVERNORS W AS NOT EXTENDED FURTHER BY MEMBERS OF SRI DASHMESH ACADEMY TRUST , WHICH MEANS THAT THE MEMBERS OF THE ASSESSEE TRUST HAVE CONVENIENTL Y STEPPED BACK AND STOPPED ENTRUSTING THE MANAGEMENT AFFAIRS OF THE T RUST TO THE GOVERNING BODY AS AGAINST OBJECT CLAUSE MENTIONED IN THE ORIG INAL MOA AS WELL AS ALLEGED AMENDED MOA OF THE YEAR 2017 ATTACHED WIT H THE AFORESAID LETTER DATED 5.2.2018. IT IS PERTINENT TO MENTION HERE THA T THE DATE ON WHICH THE SAID AMENDED MOA WAS PASSED, AS IS REVEALED FROM THE ABOVE REPRODUCED ITA NO.1257/CHD/2017- SRI DASHMESH ACADEMY TRUST, ROPAR 20 MOA, IS MENTIONED AS ON THE___DAY OF AUGUST IN THE YEAR 2017 AT CHANDIGARH. THE RELEVANT DATE ONLY FINDS MENTION IN THE LETTER DATED 5.2.2017 ADDRESSED TO THE REGISTRAR OF FIRMS AND SO CIETIES I.E. DATED 17.7.2017. EVEN THE MONTH MENTIONED IN THE LETTER IS JULY 2017, WHEREAS, THE MONTH MENTIONED IN MOA IS THAT OF AUGUST 2017 . WHY THE MEMBERS HAVE NOT MENTIONED THE DATE WHILE SINGING AND ADOPT ING THE AMENDED MOA HAS REMAINED UNEXPLAINED. IT IS PERTINENT T O MENTION HERE THAT THOUGH THE ASSESSEE TRUST (IN ITS LETTER DATED 12.6 .2017) ADDRESSED TO THE ACIT (EXEMPTIONS) HAS CLAIMED THAT IT WAS FORMED BY MINISTRY OF DEFENCE AND GOVERNMENT OF PUNJAB AND FURTHER THAT IT OWNED LAND AND BUILDING ALLOTTED BY THE GOVERNMENT OF PUNJAB / CONSTRUCTED FROM THE 100% FINANCES OBTAINED FROM THE GOVERNMENT OF PUNJAB AND MINISTRY OF DEFENCE, GOVERNMENT OF INDIA. EVEN IT HAS BEEN FURTHER MENT IONED THAT THE CORPUS FUND WAS CONTRIBUTED INITIALLY AT THE TIME OF INCO RPORATION BY THE PUNJAB GOVERNMENT TO THE TUNE OF RS. 2,00,00,000/- AND BY THE PUNJAB DEFENCE AND SECURITY RELIEF FUND COMMITTEE OF RS. 70,00,00 0./-. IT HAS BEEN FURTHER CLAIMED THAT THE TRUST HAS BEEN 100% FINANC ED BY THE GOVERNMENT. FURTHER, IN THE LETTER DATED 16.2.2017 ADDRESSED T O THE ACIT (EXEMPTIONS) IT HAS BEEN FURTHER CLAIMED BY THE ASSESSEE SOCIETY THAT THE ENTIRE CAPITAL COST (100%) OF THE SCHOOL / ACADEMY MET BY THE MINI STRY OF DEFENCE AND THE GOVERNMENT OF PUNJAB AND FURTHER THEY SEND REGU LARLY THE GRANTS FOR ALL SPECIFIC NEEDS TO MEET CAPITAL OR REVENUE EXPENDITU RE OF THE TRUST. THAT SINCE THE SAID TRUST IS BABY OF THE CENTRAL AND STATE GOVERNM ENT (EMPHASIS SUPPLIED BY US) AND MOST OF THE GOVERNING BODY MEMBERS ARE EX-OFFICIO MEMBERS VIZ. CHIEF MINISTERS OF PUNJAB, ONE MEMBER OF PUNJAB DEFENCE & SECURITY COMMITTEE, THREE ADMINISTRATIVE SECRETARIES OF PUNJAB ITA NO.1257/CHD/2017- SRI DASHMESH ACADEMY TRUST, ROPAR 21 GOVERNMENT (EDUCATION, FINANCE & DEFENCE) ETC, AND, THEREFORE, IT HAS BEEN CLAIMED THAT THE TRUST IS BEING RUN BY THE GOV ERNMENT AND THAT IN CASE OF DISSOLUTION, NOBODY SHALL DRAW ANY SHARE OR BEN EFIT FROM THE TRUST / SOCIETY. THE CONTENTS OF THE LETTER DATED 12.6.2017 AS WELL AS 16.6.2017 FOR THE PURPOSE OF READY REFERENCE ARE REPRODUCED BELOW :- 12 TH JUNE 2017 THE ASSTT. COMMISSIONER OF INCOME TAX (EXEMPTIONS) CHANDIGARH RE : APPLICATION U/S 12AA OF INCOME TAX ACT IN THE CASE OF _SRI DASMESH ACADEMY TRUST DEAR MAAM', THIS REFERS TO YOUR LETTER F. NO. CIT(E)/CHD/12AA/2 017-18/1491 DATED 02.06.2017 ON THE ABOVE CAPTIONED SUBJECT. THE PARA WISE REPLY OF THE SAME AS UNDER:- 1. THE ASSESSES OWNS LAND AND BUILDING, THE GOVT. O F PUNJAB ALLOTTED THE LAND BY A SPECIAL GAZETTE NOTIFICATION, COPY ATTACH ED AS ANNEXURE 'A'. 2. THE SRI DASHMESH ACADEMY TRUST WAS FORMED BY MIN ISTRY OF DEFENCE AND GOVT. OF PUNJAB TO EDUCATE THE CHILDREN OF SERVING AND EX-DEFENCE PERSONNELS AND THE POOR CHILDREN OF TH E AREA. 3. THE COPY OF MEMORANDUM OF ASSOCIATION ALONG WITH ITS REGISTRATION HAS ALREADY BEEN PLACED ON RECORD EARL IER. 4. THE COPIES OF THE BANK STATEMENT ARE ATTACHED AS AN NEXURE B. ALL THE PAYMENT RELATES TO THE DIRECT EXPENDITURE MADE FOR RUNNING THE SCHOOL 5. THE TRUST RECEIVES THE GRANTS FROM PUNJAB GOVT. AND MINISTRY OF DEFENCE AS PER THE SPECIFIC REQUIREMENT FROM TIME T O TIME. 6. THE COPIES OF INCOME TAX RETURNS FOR THE LAST THREE ASSESSMENT YEARS ARE ATTACHED AS ANNEXURE 'C'. THE A SSESSES CLAIMS THE DEDUCTIONS U/S 10(23C)(IIIAB) OF INCOME TAX ACT. 7. THE ASSESSEE HAS FILED THE APPLICATION U/S 11 & 12 OF INCOME TAX ACT ON 7 TH AUGUST, 1981. THE HON'BLE COMMISSIONER OF INCOME TAX, PATIALA HAS COMMUNICATED THAT THE PROVISIONS O F SECTION 11&12 OF INCOME TAX ACT ARE NOT APPLICATION TO THE TRUST, COPY ATTACHED AS ANNEXURE 'D'. 8. NO DONATION UNDER FCRA HAS EVER BEEN RECEIVED BY TH E ASSESSEE. 9. THE CORPUS MONEY WAS CONTRIBUTED INITIALLY AT THE T IME OF ITA NO.1257/CHD/2017- SRI DASHMESH ACADEMY TRUST, ROPAR 22 INCORPORATION AS PER FOLLOWING DETAILS:- I) PUNJAB GOVT. 2,00,00,000 II) PUNJAB DEFENCE AND SECURITY 70,00,000 RELIEF FUND COMMITTEE _ _. ._ _ (UNDER THE MINISTRY OF DEFENCE) TOTAL 2,70,00,000 10. THE TRUST RUNS A SCHOOL FROM 3 TD CLASS TO PLUS TWO WITH HOSTEL AND DAY BOARDING AND IS PURELY EDUCATIONAL INSTITUT E. 11. THE ASSESSEE CLAIMS DEDUCTIONS U/S 10(23C)(IIIAB) O F INCOME TAX ACT SINCE IT IS 100% FINANCED BY GOVT. 12. THE DETAILS OF CASH DEPOSITS IN BANK FOR A PERIOD F ROM 08.11.2016 TO 31.03.2017 THE DEPOSITS PERTAINS TO THE FEE OF THE STUDENTS. 13. THE SALARY DETAILS FOR THE LAST THREE YEARS ARE ATT ACHED AS ARMEXURE 'E' ALONG WITH THE DEDUCTION OF TDS. 14. THE COPIES OF FINANCIAL STATEMENTS FOR THE LAST 3 Y EARS ARE ATTACHED AS ANNEXURE 'F'. 15. NO DONATION HAS BEEN RECEIVED DURING THE ASSTT. YEA R 2016-17. 16. THE TRUST IS PI-RELY AND EDUCATIONAL INSTITUTE. 17. THE ASSESSEE HAS FILED APPLICATION U/S 11&12 IN 198 1, BEING EXPLAINED EARLIER IN PARA NO. 7. 18. THE COPY OF THE ASSTT. ORDERS U/S 143(3) OF INCOME TAX ACT FOR THE ASSTT, YEAR2012-13 IS ATTACHED AS ANNEXURE 'G'. 19. THERE IS NO BRANCH OF THE TRUST. I HOPE THE DOCUMENTS AND INFORMATION ARE IN ORDER. THANKING YOU YOURS SINCERELY, SD/- (CA. SANJEEV -MEHAN) FOR & ON BEHALF OF ASSESSEE 16TH JUNE, 2017 THE ASSTT. COMMISSIONER OF INCOME TAX (EXEMPTIONS) CHANDIGARH RE : APPLICATION U/S 12AA OF INCOME TAX ACT IN THE CASE OF SRI DASHMESH ACADEMY TRUST ITA NO.1257/CHD/2017- SRI DASHMESH ACADEMY TRUST, ROPAR 23 DEAR MAAM', THIS REFERS TO THE PREVIOUS HEARING, THE DESIRED IN FORMATION AND DOCUMENTS ARE AS UNDER:- 1. THE ORIGINAL DOCUMENTS WITH REGARD TO MEMORANDUM & CERTIFICATE OF REGISTRATION ARE PRODUCED FOR YOUR V ERIFICATION. 2. THE AFFILIATION CERTIFICATE OF CBSE IS ATTACHED AS ANNEXURE 'H'. 3. THE LIST OF BANK ACCOUNTS IS ATTACHED AS ANNEXURE I . 4. THE SALARY TO STAFF IS BEING PAID AS PER THE CBSE G UIDELINES. 5. THE TRUST/SOCIETY RUNS A SCHOOL FROM 3 RD CLASS TO +2 LEVEL WITH THE FACILITY OF HOSTEL AND DAY BOARDING FOR THE DEFENCE PEOPLE AND THE POOR STUDENTS OF THE AREA. THE CONCESSIONAL FEE IS CHARG ED TO ALL THE DESERVING AND POOR STUDENTS. THE SCHOOL IS OPEN TO ALL THE APPLICANTS/STUDENTS DESIROUS TO BE CLAIMANTS UNDER THE RTE ACT. 6. THE ASSESSEE IS CLAIMING DEDUCTION U/S 10(23) (IIIA B) OF INCOME TAX ACT AS THE ENTIRE CAPITAL COST (100%) OF THE SCHOOL / A CADEMY HAS BEEN MET BY THE MINISTRY OF DEFENCE AND THE GOVT OF PUNJ AB. FURTHER THEY REGULARLY SEND THE GRANTS FOR ALL SPECIFIC NEEDS TO MEET THE CAPITAL OR REVENUE EXPENDITURE. THE TRUST HAS NOT BEEN ACCEPTI NG ANY GRANTS OR DONATIONS FROM THE OTHER PARTIES EXCEPT AT ONE TIME SGPC HAD SENT CERTAIN GRANT FOR SPECIFIC CAPITAL EXPEND ITURE. SINCE THE TRUST IS SUBSTANTIALLY FINANCE BY THE CENTRAL & STATE GOVERN MENTS THUS BEING ELIGIBLE FOR THE SAID DEDUCTIONS. FURTHER I WISH TO ADD THAT THERE WERE TWO INCOME TAX ASSESSMENTS U/S 143(3) WHERE TH E DEDUCTION HAS BEEN ALLOWED U/S 10(23) (IIIAB) OF INCOME TAX A CT. 7. THE MEMORANDUM OF THE TRUST INCORPORATED IN FINA NCIAL YEAR 1977- 78 AND THERE WAS NO SPECIFIC REQUIREMENT OF THE DIS SOLUTION CLAUSE AT THAT TIME. SINCE THE SAID TRUST IS THE BABY OF THE CENTRAL AND STATE GOVT. AND MOST OF THE GOVERNING BODY MEMBERS ARE EX -OFFICIO MEMBERS VIZ. CHIEF MINISTER OF PUNJAB, ONE MEMBE R OF PUNJAB DEFENCE & SECURITY COMMITTEE, THREE ADMINISTR ATIVE SECRETARIES OF PUNJAB GOVT (EDUCATION, FINANCE & DEFENCE) ETC. THI S CONSTITUTION CLARIFIES AND JUSTIFIES THAT THE TRUST IS BEING RUN BY THE GOVERNMENTS AND IN CASE OF DISSOLUTIONS NO BODY SHALL BE ABLE T O DRAW ANY SHARE OR BENEFIT FROM THE TRUST/ SOCIETY. FURTHER T HE TRUST SHALL TAKE A NOTE TO CHANGE THE MEMORANDUM WITH A DISSOLU TION CLAUSE AT THE EARLIEST 'THAT IN CASE OF THE DISSOLUTION OF THE TRUST/SOCIETY IT SHALL BE TAKEN OVER BY ANY OTHER SOCIETY WITH SIMIL AR OBJECT OR THE GOVT SHALL HAVE THE RIGHT TO TAKE IT OVER'. 8. NOW THE GOVERNMENT ADVISED TRUST TO BE SELF-SUFFICIENT WITHOUT THE ITA NO.1257/CHD/2017- SRI DASHMESH ACADEMY TRUST, ROPAR 24 GOVT GRANTS AND THUS A NEED HAS BEEN ARISEN TO GET THE TRUST REGISTERED U/S 12AA OF INCOME TAX ACT. IN VIEW OF THE ABOVE IT IS HEREBY PRAYED THAT THE T RUST BE REGISTERED U/S 12AA OF INCOME TAX ACT. THANKING YOU YOURS SINCERELY, SD/- (CA. SANJEEV MEHAN) FOR & ON BEHALF OF ASSESSEE 14. HOWEVER, IN THE LETTER DATED 5.2.2018 ADDRESSE D TO THE REGISTRAR OF FIRMS AND SOCIETIES, IT HAS BEEN MENTIONED THAT THE LAST MEETING OF THE BOARD OF GOVERNORS WAS HELD ON 15.5.2007 AND THEREA FTER THE TERM OF BOARD OF GOVERNORS WAS NOT EXTENDED FURTHER BY THE MEMBERS OF SRI DASHMESH ACADEMY TRUST. THE ABOVE CONTENTS OF THE LETTER DATED 05.2.2018 REVEALS THAT THERE IS NO BOARD OF GOVERNO RS FORMED AFTER 15.5.2007 AND EVEN THE INTIMATION REGARDING THE ABO VE IS GIVEN TO THE REGISTRAR, FIRMS AND SOCIETIES AFTER 11 YEARS I.E. VIDE LETTER DATED 5.2.2018, ONLY WHEN THE TRUSTEES GOT AWAKEN UP TO ADD THE DIS SOLUTION CLAUSE, WHEN POINTED OUT BY THE LD. CIT(E) IN THE IMPUGNED ORDER . THE FACTS ON THE FILE CLEARLY REVEALS THAT ORIGINAL LY THE TRUST WAS FORMED WITH 100% AID AND FINANCES FROM THE GOVERNME NT OF PUNJAB AS WELL AS FROM THE UNION GOVERNMENT AND THAT IT WAS TAKEN AS A BABY OF THE GOVERNMENT (AS ITSELF PLEADED BY THE TRUST ITSELF) AND FURTHER THAT ITS MANAGEMENT AND AFFAIRS WERE SUPPOSED TO BE ENTRUSTE D TO THE GOVERNING BODY, THE CHAIRMAN OF WHICH WAS SUPPOSED TO BE THE CHIEF MINISTER OF PUNJAB, APART FROM THAT, ONE MEMBER OF PUNJAB DEF ENCE & SECURITY ITA NO.1257/CHD/2017- SRI DASHMESH ACADEMY TRUST, ROPAR 25 COMMITTEE AND OTHER EX-OFFICIO MEMBERS WHO ARE GOVE RNMENT OFFICIALS OF HIGH RANK OF SECRETARY TO THE GOVERNMENT OF PUNJA B LIKE, THREE ADMINISTRATIVE SECRETARIES OF PUNJAB GOVERNMENT (ED UCATION, FINANCE & DEFENCE) ETC. IT HAD ALWAYS BEEN REPRESENTED AS A G OVERNMENT ORGANIZATION HOWEVER, AFTER ACCUMULATING LAND AND BUILDING AN D FUNDS FROM THE STATE AND CENTRAL GOVERNMENT, THE MEMBERS OF THE TRUST C ONVENIENTLY CAPTURED THE CONTROL OF THE TRUST BY NOT FURTHER EXTENDING THE TERM OF BOARD OF GOVERNORS, CLEARLY AGAINST THE OBJECTS OF MOA O F 1978 AS WELL AS THE AMENDED REGULATION ATTACHED WITH IT AND EVEN AGAINS T THE ALLEGED AMENDED MOA OF 2017. 15. IT IS PERTINENT TO MENTION HERE THAT AS ON THE DATE, SARDAR PARKASH SINGH BADAL IS NOT THE CHIEF MINISTER OF PUNJAB. IN FACT CAPTION AMRINDER SINGH HAS ASSUMED THE OFFICE OF CHIEF MINISTER OF P UNJAB ON 16.3.2017 AND HE IS SUPPOSED TO PRESIDE OVER THE MEETING OF THE B OARD OF GOVERNORS. FURTHER, AS PER CLAUSE 4(E) OF THE ORIGINAL MOA A S WELL AS AMENDED MOA, THE GOVERNING BODY TO WHICH MANAGEMENT OF T HE AFFAIRS OF THE TRUST ARE ENTRUSTED HAS TO BE CONSTITUTED HAS TO I NCLUDE ONE MEMBER TO BE NOMINATED BY PUNJAB DEFENCE AND SECURITY RELIEF FUN D COMMITTEE, THREE ADMINISTRATIVE SECRETARIES OF PUNJAB GOVERNMENT (ED UCATION, FINANCE AND DEFENCE SERVICES WELFARE DEPTT.) AS EX-OFFICIO MEMB ERS, TWO EMINENT EDUCATIONISTS TO BE NOMINATED BY THE TRUST BESIDES SECRETARY OF THE TRUST AND THE DIRECTOR OF THE ACADEMY. HOWEVER, A PERUSA L OF LETTER DATED 5.2.2018 REVEALS THAT MEMBERS OF THE TRUST HAVE CON VENIENTLY BY NOT FURTHER EXTENDING THE TERM OF BOARD OF GOVERNORS HA VE ENTRUSTED UNTO THEMSELVES THE CONTROL AND MANAGEMENT OF THE TRUST. ITA NO.1257/CHD/2017- SRI DASHMESH ACADEMY TRUST, ROPAR 26 16. NOW, ANOTHER PARTICULAR FACT ON THE FILE IS THA T IN THE WRITTEN PLEADING OF THE ASSESSEE TRUST MADE BEFORE THE ASST. COMMISS IONER OF INCOME TAX (E) VIDE LETTERS DATED 12.6.2017 AND 16.6.2017, IT HAS BEEN PLEADED THAT THE LAND TO THE TRUST HAS BEEN ALLOTTED BY THE GOV ERNMENT OF PUNJAB BY WAY OF SPECIAL GAZETTE NOTIFICATION. THAT THE ASSE SSEE TRUST WAS FORMED BY MINISTRY OF DEFENCE AND GOVERNMENT OF PUNJAB TO EDUCATE THE CHILDREN OF SERVING AND EX-DEFENCE PERSONNEL AND THE POOR C HILDREN OF THE AREA. THAT THE TRUST RECEIVES / RECEIVED GRANTS FROM THE PUNJAB GOVT. AND MINISTRY OF DEFENCE. THAT THE ASSESSEE HAS BEEN CLA IMING DEDUCTION U/S 10(23C) (IIIAB) OF THE INCOME TAX ACT SINCE IT IS 1 00% FINANCED BY THE GOVERNMENT. THAT THE ENTIRE CAPITAL COST (100%) OF SCHOOL / ACADEMY HAS BEEN MET BY MINISTRY OF DEFENCE & GOVERNMENT OF PUN JAB AND FURTHER THAT THEY REGULARLY SEND THE GRANTS FOR ALL SPECIFIC NE EDS TO MEET THE CAPITAL AND REVENUE EXPENDITURE. THAT THE TRUST HAS NOT BEEN A CCEPTING ANY GRANTS OR DONATIONS FROM THE OTHER PARTIES, EXCEPT AT ONE TI ME SGPC HAS SENT CERTAIN GRANT FOR SPECIFIC CAPITAL EXPENDITURE. THAT THE TR UST IS 100% FINANCED BY THE CENTRAL AND STATE GOVERNMENT. IT HAS ALSO BEEN PLEADED IN THE LETTER DATED 16.6.2017 THAT THE TRUST IS BABY OF THE CENTR AL AND STATE GOVERNMENT AND THE MOST OF THE GOVERNING BODY MEMBERS ARE EX- OFFICIO MEMBERS VIZ. CHIEF MINISTER OF PUNJAB, ONE MEMBER OF PUNJAB DEFE NCE & SECURITY COMMITTEE, THREE ADMINISTRATIVE SECRETARIES OF PUNJ AB GOVERNMENT (EDUCATION, FINANCE & DEFENCE) ETC. IT HAS BEEN F URTHER STATED THAT THE CONSTITUTION OF THE TRUST CLARIFIES AND JUSTIFIES THAT THE TRUST IS BEING RUN BY THE GOVERNMENT AND IN CASE OF DISSOLUTION, NOBOD Y SHALL BE ABLE TO DRAW ITA NO.1257/CHD/2017- SRI DASHMESH ACADEMY TRUST, ROPAR 27 ANY SHARE OR BENEFIT FROM THE TRUST /SOCIETY. HOWEV ER, THE TRUST WILL INCORPORATE THE DISSOLUTION CLAUSE. WHEN THE AFORESAID MOA AND LETTER DATED 5.2.2018 ARE READ TOGETHER WITH THE ORIGINAL MOA OF THE TRUST, THE FACTS SPEAK THAT THE TRUST HAS BEEN SUPPOSED TO BE GOVERNED BY THE OFFIC IALS OF THE GOVERNMENT UNDER THE CHAIRMANSHIP OF CHIEF MINISTER OF PUNJAB AS PLEADED BY THE ASSESSEE SOCIETY, ITSELF, BEFORE THE CIT(E) BUT H AS NOW GIVEN ITS CONTROL TO THE PRIVATE PERSONS WHO ARE NO MORE IN THE GOVERNME NT. THIS FACT HAS BEEN CONVENIENTLY CONCEALED FROM THE CIT(E) THAT THE TER M OF BOARD OF GOVERNORS HAS NOT BEEN EXTENDED SINCE 15.5.2007 AND THAT AFTER YEAR 2007, THERE IS NO CONTROL OF THE GOVERNMENT OR ANY OFFICI AL OF THE GOVERNMENT ON THE TRUST AFTER THE YEAR 2007 AND THAT THE MEMBERS OF THE TRUST, WHO ARE PRIVATE PERSONS, THEMSELVES HAVE ESTABLISHED CONTRO L OVER THE TRUST. A TOTALLY FALSE AND WRONG PLEADINGS HAVE BEEN MADE BY THE ASSESSEE TRUST BEFORE THE INCOME TAX AUTHORITIES THAT IT IS A GOVE RNMENT CONTROLLED ORGANIZATION . THE FACTS ON THE FILE SPEAKS THAT THE TRUSTEES IN VIOLATION OF THE MOA AND REGULATIONS OF THE TRUST HAVE SHIF TED CONTROL & MANAGEMENT OF THE TRUST FROM THE STATE AND CENTRA L GOVERNMENT OFFICIALS UNTO THEMSELVES. UNDER THE CIRCUMSTANCES, THE LD. CIT(E) HAD A VALID AND REASONABLE APPREHENSION THAT IN CASE OF DISSOLUTION , THE PROPERTIES OF THE TRUST, WHICH ADMITTEDLY HAVE BEEN CREATED AND CONS TITUTED OUT OF 100% GRANTS GIVEN BY THE STATE AND CENTRAL GOVERNMENT A ND HAVE NOW BEEN ATTEMPTED TO BE SHIFTED IN THE HANDS OF THE PRIVAT E MANAGEMENT, MAY BE DISTRIBUTED AMONGST THE PRIVATE INDIVIDUAL MEMBERS OF THE TRUST. THE ITA NO.1257/CHD/2017- SRI DASHMESH ACADEMY TRUST, ROPAR 28 ABOVE FACTS AND CIRCUMSTANCES ALSO CAST DOUBT ABOUT THE FUNCTIONING AND GENUINENESS OF THE OBJECTS OF THE TRUST. IN VIEW OF THIS, WE DO NOT FIND ANY INFIRMITY IN T HE ORDER OF THE CIT(E) IN REJECTING THE APPLICATION OF THE TRUST F OR REGISTRATION U/S 12A OF THE ACT. 17. WE ARE FURTHER PAINED TO NOTE HERE THAT IDENTIC AL CONTENTIONS AS WERE RAISED BY THE REPRESENTATIVES OF THE TRUST BEFORE T HE LOWER AUTHORITIES THAT THE TRUST IS CONTROLLED AND MANAGED BY THE GOVERNME NT OR THAT ITS FUNDS AND PROPERTIES OTHERWISE BELONG TO THE GOVERNMENT, HAVE BEEN RAISED BY THE COUNSEL FOR THE ASSESSEE TRUST BEFORE US ALSO A ND FURTHER THAT EVEN OTHERWISE, DISSOLUTION CLAUSE HAS BEEN ADDED VIDE T HE AMENDED RESOLUTION. THIS, IN OUR VIEW, IS A CLEAR AND VISIBLE ATTEMPT O N BEHALF OF THE TRUST TO MISLEAD THIS BENCH OF THE TRIBUNAL BY WAY OF CONCEA LING THE REAL AND TRUE FACTS THAT THE MEMBERS OF THE TRUST HAVE, BY NOT EX TENDING THE TERM OF BOARD OF GOVERNORS, CONVENIENTLY ENTRUSTED UNTO THE MSELVES THE CONTROL AND MANAGEMENT OF THE TRUST. HAD THE CASE OF THE TR UST BEEN NOT CAREFULLY EXAMINED, THESE IMPORTANT AND RELEVANT FACTS WOULD HAVE REMAINED WRAPPED UNDER THE CARPET, AND THE TRUST COULD HAVE MANAGED TO GET THE RELIEF OF EXEMPTION FROM TAXATION BY PRESENTING WRONG AND FAL SE FACTS. THIS IS A CLEAR CASE OF AN ATTEMPT TO PLAY FRAUD NOT ONLY WIT H THE LOWER INCOME TAX AUTHORITIES, BUT ALSO UPON THIS TRIBUNAL, WHICH IS DEEMED TO BE A CIVIL COURT FOR THE PURPOSE OF DISCHARGING ITS FUNCTIONS AND THE PROCEEDINGS BEFORE THIS APPELLEE TRIBUNAL ARE DEEMED TO BE JUDI CIAL PROCEEDINGS WITHIN THE MEANING OF SECTIONS 193 & 228 FOR THE PURPOSE O F SECTION 196 OF INDIAN PENAL CODE. IN VIEW OF THIS, ANY ATTEMPT TO PLAY F RAUD ON THE COURT BY WAY ITA NO.1257/CHD/2017- SRI DASHMESH ACADEMY TRUST, ROPAR 29 OF CONVEYING WRONG AND FALSE FACTS AND PLEADINGS IS REQUIRED TO BE STRICTLY DEALT WITH. HENCE, THE APPEAL OF THE ASSESSEE IS HE REBY DISMISSED WITH EXEMPLARY COSTS OF RS. 1,00,000/- TO BE RECOVERABLE AS ARREARS OF TAX REVENUE BY THE DEPARTMENT. ORDER PRONOUNCED IN THE OPEN COURT ON 30.10.2018. SD/- SD/- ( ) * # +, / ANNAPURNA GUPTA) %& / ACCOUNTANT MEMBER ( / SANJAY GARG) / JUDICIAL MEMBER DATED : 30.10. 2018 .. %+ ,- .-( / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ! / / CIT 4. ! / ( )/ THE CIT(A) 5. - 01 2 , # 2) , 34516 / DR, ITAT, CHANDIGARH 6. 15 7' / GUARD FILE %+ ! / BY ORDER, 8 / ASSISTANT REGISTRAR