Sanjo Charitable & Educational Trust, Idukki V. CIT, Cochin

ITA 127/COCH/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96695 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 5 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2015
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 03-09-2015
• Assessment Year: misc
• Appeal Filed On: 24-03-2014
• Court: TRIBUNAL
• Department Lawyers: SHANTAM BOSE
• Assessee Lawyers: T K MATHEW
• Keywords: Gift; Charitable institution; Opportunity of being heard
• Section: 12AA; 63; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH C OCHIN BEFORE S/SHRI B.P. JAIN, AM AND GEORGE GEOR GE K., JM I.T.A. NO. 127/COCH /2014 ASSESSMENT YEAR : - SANJO CHARITABLE EDUCATIONAL TRUST, SANJO BHAVAN, CST FATHERS, MULLAKKANAM P.O., RAJAKKAD, IDUKKI-685 566. [PAN: AAMTS 3975L] VS. THE COMMISSIONER OF INCOME TAX, KOCHI. (ASSESSEE -APPELLANT) (REVENUE-RESPONDENT) ASSESSEE BY SHRI T.K. MATHEW, FCA REVENUE BY SHRI SHANTAM BOSE, CIT(DR) DATE OF HEARING 03/09/2015 DATE OF PRONOUNCEMENT 07/09/2015 O R D E R PER B.P.JAIN, ACCOUNTANT MEMBER: THIS APPEAL OF THE ASSESSEE IS ARISING FROM THE OR DER OF THE COMMISSIONER OF INCOME-TAX-I, KOCHI DATED 30/01/2014 PASSED U/S. 12A(1)(B)(II) OF THE INCOME TAX ACT, 1961. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE HONBLE COMMISSIONER OF INCOME -TAX IS CONTRARY TO LAW, AGAINST FACT AND OTHER EVIDENCES. 2. THE HONBLE COMMISSIONER OUGHT TO HAVE FOUND TH AT ALLEGED CLAUSES IN THE DEED OF TRUST ARE NOT AT ALL HIT BY PROVISIONS CONT AINED IN SECTIONS 60 TO 63. I.T.A. NO.127/COCH/2014 2 3. THE HONBLE COMMISSIONER ERRED IN ASSUMING THE M EANING OF IRREVOCABILITY. ACCORDING TO HIM IRREVOCABILITY AROSE WHEN THE POWERS OF THE TRUSTEES ARE CONTROLLED BY THE SETTLERS. THE IRREV OCABILITY INDENTED IN SECTION 11 WAS TO CURTAIL THE POSSIBILITY OF TRANSPOSITION OF THE TRUST FUND INTRODUCED BY THE AUTHORS IN ORDER TO ENJOY THE INCOME EARNED OUT OF IT BY THEM. 4. THE HONBLE COMMISSIONER OUGHT TO HAVE CONVINCE D WITH THE FACT THAT THERE WAS A SPECIFIC CLAUSE IN THE TRUST DEED MENTI ONING THE TRUST AS IRREVOCABLE (CLAUSE 20). 5. THE HONBLE COMMISSIONER FAILED TO APPRECIATE T HE FACT THAT IF THE SETTLERS REVOKE THE TRUST PROPERTY THEREBY INCOME/FUND/ASSET S ARE ENJOYED BY THEM THERE IS A PROHIBITING PROVISION U/S. 13(1)(C) TO D ENY EXEMPTION TO THE TRUST IN SUCH CIRCUMSTANCES. 3. THE BRIEF FACTS OF THE CASE AS EMANATING FROM THE ORDER OF THE COMMISSIONER OF INCOME-TAX-I, KOCHI ARE REPRODUCED BELOW: SANJO CHARITABLE AND EDUCATIONAL TRUST HAD FILED AN APPLICATION FOR REGISTRATION U/S. 12AA OF THE INCOME TAX ACT, 1961, IN FORM NO. 10A ON 08.07.2013. THE TRUST WAS CREATED ON 16.01.2013 A S PER THE TRUST DEED. THE MAIN OBJECTS OF THE TRUST WAS TO CONDUCT SCHOOL S, COLLEGES ETC. 2. IN THIS CONNECTION, THE CASE WAS POSTED FOR HEA RING ON 04.07.2013, BY ISSUING A LETTER DATED 04.11.2013 BY THE DDIT(E), RA NGE-4, KOCHI, ON BEHALF OF THE UNDERSIGNED. SHRI C.J. ROMID, FCA APPEARED FOR HEARING ON 18/11/2013 AND FILED NECESSARY DETAILS. IN ORDER T O VERIFY THE GENUINENESS OF THE INSTITUTION AND ITS ACTIVITIES, A DETAILED ENQU IRY WAS ALSO CONDUCTED IN THIS CASE. 3. IN ORDER TO VERIFY THE GENUINENESS OF THE OBJEC TS AND OF ITS ACTIVITIES, THE TRUST WAS GIVEN ANOTHER OPPORTUNITY OF BEING HEARD BY POSTING THE CASE FOR HEARING ON 03.12.2013 BY THIS OFFICE LETTER DATED 2 0.11.2013, FOR WHICH ALSO SHRI C.J. ROMID, FCA APPEARED AND WAS HEARD. HE WA S AGAIN HEARD ON 23- 01-2014. THE CASE WAS DISCUSSED WITH HIM IN DETAIL . 4. DURING THE COURSE OF EXAMINATION OF THE TRUST DE ED, IT WAS NOTICED THAT MANY CLAUSES OF THE TRUST DEED GAVE IMMENSE POWER T O THE SETTLER IN EVERY I.T.A. NO.127/COCH/2014 3 ACTIVITIES AND FUNCTIONING OF THE TRUST SHOWED THE REVOCABLE NATURE OF TRUST WHICH IS AGAINST THE PROVISIONS OF SECTION 11 OF TH E I.T. ACT. A LETTER DATED 28.01.2014 WAS ISSUED TO THE PETITIONER SEEKING CLA RIFICATION ON THIS ISSUE. SHRI ROMID, FCA APPEARED ON 29.01.2014 AND FILED A LETTER STATING THAT THE CONTROL OVER THE TRUSTEES BY THE SETTLER IS FOR THE SMOOTH FUNCTIONING OF THE TRUST. THE MATTER WAS DISCUSSED WITH HIM IN DETAIL . 5. THE CONTENTIONS RAISED BY THE PETITIONER HAVE B EEN DULY CONSIDERED. HOWEVER, VERIFICATION OF VARIOUS CLAUSES IN THE TRU ST DEED IS NEEDED FOR FINDING OUT THE FACTS OF THE CASE. I) CLAUSE 3 IF THE TRUST DEFINES THE TRUST PROPERTY AS IN ORD ER TO EFFECTUATE THE ABOVE REFERRED DECISION, THE SETTLERS HAVE MADE OVER TO THE TRUSTEE A SUM OF RS,1,000/- (RUPEES ONE THOUSAND ONLY) TO HOL D THE SAME TOGETHER WITH ALL ADDITION AND ACCRETIONS THERETO AND ALL OT HER PROPERTY THAT MAY BE ACQUIRED BY PURCHASE, LEASE, GIFT OR OTHERWISE AND MAY HEREINAFTER BE THE SUBJECT MATTER OF THE TRUST (HEREINAFTER CALLED THE TRUST FUND) FOR THE OBJECTS AND ON THE TERMS AND CONDITIONS HEREIN CONTAINED CO NCERNING THE SAME FOR THE OBJECT OF THE TRUST. THEREFORE, IT CAN BE SEE N THAT THE TERMS AND CONDITIONS PRESCRIBED IN THE TRUST IS APPLICABLE TO TRUST PROPERTY ALSO. II) CLAUSE 5C SAYS THAT THE PROVINCIAL COUNCIL IS EMPOWERED TO NOMINATE THE NEW PERSONS AS MEMBERS TO THE BOARD OR TO REMOVE AN Y EXISTING MEMBER FROM THE BOARD, AS FOUND NECESSARY FROM TIME TO TIM E. THIS SHOWS THAT THE SETTLER (PROVINCIAL COUNCIL) IS EMPOWERED TO REMOVE OR NOMINATE ANY PERSON FROM OR TO THE TRUST AS THEY WISH AND WITHOUT ASSIG NING ANY REASON. III) CLAUSE 8 OF THE TRUST DEED DEALS WITH THE POWERS OF THE BOAR D OF TRUSTEES. (A) AS PER SUB-CLAUSE B TO INVEST THE FUNDS OF THE TRUST IN ANY MANN ER THEY DEEM FIT CONSISTENT WITH THE OBJECTS OF THE TRUST AND IN THE INTEREST O F THE TRUST PROVIDED SUCH INVESTMENT IN IMMOVABLE PROPERTIES SHALL BE SUBJECT TO THE APPROVAL OF THE SETTLERS OF THE TRUST. (B) AS PER SUB CLAUSE C TO BORROW ANY AMOUNT EITHER BY PLEDGING THE ASSETS OF THE TRUST OR OTHERWISE FROM INDIVIDUALS, BANKS, FINANCIAL INSTIT UTIONS OR OTHER INSTITUTIONS WITH OR WITHOUT INTEREST, FOR ANY OF THE OBJECTS OF THE TRUST, PROVIDED THE SANCTION OF THE SETTLERS IS NECESSARY TO AVAIL SUCH LOAN. (C) AS PER SUB CLAUSE F TO ACQUIRE LAND AND BUILDING OR TAKE ON LEAS E, HOLD MOVABLE OR IMMOVABLE PROPERTIES AND TO LEASE OUT OR TO DISPOSE OFF THE SAME WHENEVER I.T.A. NO.127/COCH/2014 4 FOUND NECESSARY IN THE BEST INTEREST OF THE OBJECTS OF THE TRUST, PROVIDED SALE OF LANDED PROPERTY REQUIRE THE SANCTION OF THE SETT LERS. (D) AS PER SUB CLAUSE G SUBJECT TO THE APPROVAL OF THE SETTLERS, TO J OIN, COOPERATE, OR AMALGAMATE THIS TRUST WITH OTHER TRUSTS OF SIMILAR OR IDENTICA L NATURE OR INSTITUTIONS AS THE TRUSTEES THINK FIT. (E) AS PER SUB CLAUSE H TO REFER ALL DISPUTES TO THE PROVINCIAL OF ST . JOSEPHS PROVINCE AND WHOSE DECISION SHALL BE FINAL. (F) AS PER SUB CLAUSE I TO APPOINT VARIOUS COMMITTEES AS FOUND NECESS ARY AND TO FIX ITS POWERS AND FUNCTIONS SUBJECT TO THE APPROVAL OF THE SETTLE RS. AS GIVEN ABOVE, CLAUSES B, C, F, G, H, I OF CLAUSE B OF TRUST DEED CLEARLY SHOW THAT FOR ALMOST EVERY DECISION/ACTION, THE MATTER I S TO BE DECIDED BY THE SETTLERS. IV) CLAUSE 14 OF THE TRUST DEED SPEAKS ABOUT THE P OWERS OF THE SETTLERS WHICH READS AS UNDER THE SETTLERS SHALL HAVE THE POWER T O DEPUTE ANY PERSON TO INSPECT THE ACCOUNTS AND THE AFFAIRS OF THE TRUST A ND THE INSTITUTIONS UNDER THE TRUST IN THE BEST INTEREST OF THE BENEFICIARIES AND TO ISSUE ANY DIRECTION WHAT SO EVER NECESSARY TO THE BOARD OF TRUSTEES AND THEY SHALL BE BOUND TO ACCEPT AND ACT UPON SUCH DIRECTIONS. 6. FROM THE ABOVE, IT CAN BE SEEN THAT THE SETTL ER IS HOLDING THE ENTIRE POWER IN THE MANAGEMENT AND ALMOST IN ALL THE ACTIVITIES OF THE TRUST. IT CLEARLY SHOWS THAT EVEN THOUGH A TRUST IS CREATED, TRUSTEES HAVE NO POWER IN THE MANAGEMENT AND AFFAIRS OF THE TRUST, WHICH IS AGAIN ST THE BASIC PRINCIPLES OF A TRUST. IT ALSO SHOWS THE REVOCABLE NATURE OF THE T RUST. IT IS ALSO NOTICED NOWHERE IN THE TRUST DEED, THE MANNER IN WHICH THE BOARD OF TRUSTEES HAVE TO TAKE THEIR DECISIONS WHETHER IT IS ON MAJORITY OR 2/3 RD OR 3/4 TH MAJORITY ETC. IS NOT SPECIFIED. IT MAY BE DUE TO THE FACT THAT T HE DECISION OF THE BOARD OF TRUSTEES HAS NO RELEVANCE IN THE ACTIVITIES OF THE TRUST AS ENTIRE DECISIONS ARE BEING TAKEN BY THE SETTLER INSTITUTION. IT IS ALSO NOTICED THAT SETTLER IS NOMINATING THE TRUSTEES FROM TIME TO TIME. I.T.A. NO.127/COCH/2014 5 7. (I) IN THIS CONNECTION, THE BOOK OF TUDOR ON CHARITIES (6 TH EDITION) AT PAGE 131 IT IS STATED AS FOLLOWS: WHEN A CHARITY HAS BEEN FOUNDED AND TRUSTS HAVE BE EN DECLARED, THE FOUNDER HAS NO POWER TO REVOKE, VARY OR ADD TO THE TRUSTS. THIS IS SO IRRESPECTIVE OF WHETHER THE TRUSTS HAVE BEEN DECLAR ED BY AN INDIVIDUAL, OR BY A BODY OF SUBSCRIBERS, OR BY THE TRUSTEES. (II) IT IS HELD IN THE CASE OF NARESH SENGUPTA FOUN DATION VS. CIT (1994) 207 ITR 340 (CAL) THAT A DEED OF TRUST THAT QUALIF IES FOR EXEMPTION U/S. 11 CANNOT HAVE ANY STIPULATION RESERVING ANY POWER TO REVOKE OR ALTER THE TERMS OF THE TRUST DEED, BECAUSE THAT WOULD LEND TO THE TRUST THE CHARACTER OF A REVOCABLE TRUST ATTRACTING THE PROVI SIONS OF SECTIONS 61AND 63. (III) SUPREME COURT IN CIT VS. JAYANTILAL AMRATLAL (1968) 67 ITR1 HAS HELD THAT THE TERM RESUMES POWER DIRECTLY OR INDIRECTLY IN SECTION 63 IMPLIES THAT THERE SHOULD BE SOMETHING IN THE TRUST DEED WH ICH ALLOWS RESUMPTION OF PRE TRUST POWERS. THE SETTLER SHOULD IN SOME WA Y GET BACK THE POWERS HE HAD PRIOR TO CREATION OF THE TRUST DEED. IT CLEARLY SHOWS THAT IN THE INSTANT CASE, THE ASSE SSEE HAS VIOLATED THE PROVISIONS OF THE INCOME TAX ACT AS WELL AS THE DEC ISIONS OF VARIOUS COURTS WHICH ARE SETTING PARAMETERS FOR A CHARITABLE TRUST . 8. AS PER SECTION 11 OF THE IT ACT, WHICH CLEARLY S TATES THAT SUBJECT TO PROVISIONS OF SECTIONS 62 TO 63, THE INCOME IS EXE MPTED U/S. 11, IF CERTAIN CONDITIONS ARE SATISFIED. AS DISCUSSED ABOVE, IN TH E PRESENT CASE, THE SETTLER IS HOLDING ALMOST ENTIRE POWER IN THE ACTIVITIES AND M ANAGEMENT OF THE TRUST WHICH AMOUNTS TO THE REVOCABLE NATURE OF THE TRUST. THE CONTENTION OF THE ASSESSEE THAT THERE IS A PROVISION IN THE TRUST DEE D AS PER CLAUSE 20 STATING THAT THE TRUST IS IRREVOCABLE, DOES NOT CHANGE THE OVERA LL NATURE OF THE TRUST. IT IS ALSO RELEVANT TO NOTE THAT, IN EFFECT THE SETTLER I S ENJOYING THE ENTIRE POWER AS HE WAS HOLDING BEFORE THE CREATION OF THE TRUST. T HE CONTENTION OF THE ASSESSEE THAT THE RESTRICTION IMPOSED IN THE TRUST DEED IS FOR PROPER MANAGEMENT OF THE TRUST DOES NOT SEEM TO BE CORRECT . IF THE INTENTION OF THE SETTLER WAS TO CONTROL THE MISMANAGEMENT OF THE TRU STEES, IT WOULD HAVE BEEN DONE BY INCORPORATING CERTAIN CONDITIONS IN ONE OR TWO CLAUSES OF THE TRUST DEED WITHOUT DISTURBING THE IRREVOCABLE NATURE OF THE TR UST. ON THE CONTRARY, IN THE PRESENT CASE AS GIVEN ABOVE, THE ENTIRE POWER IS VE STED WITH THE SETTLER ITSELF. THIS EFFECTS THE LEGAL VALIDITY OF THE TRUST, AS IN A VALID TRUST, THE TRUST PROPERTY IS ENTRUSTED WITH THE TRUSTEES FOR PROPER MANAGEMEN T FOR THE BENEFIT OF THE I.T.A. NO.127/COCH/2014 6 BENEFICIARIES. IN THIS CASE, THE TRUSTEES HAVE NO POWER AS THE ENTIRE POWER IS VESTED WITH THE SETTLER. IT IS NOTICED THAT THIS I S A TRUST IN PRETEXT. 9. FROM THE ABOVE IT CAN BE SEEN THAT THE SANJO CHARITABLE AND EDUCATIONAL TRUST VIOLATES THE BASIC PROVISIONS OF A VALID TRUST AND FURTHER I T IS A TRUST THAT CAN BE REVOKED AT ANY TIME AT THE WILL OF THE SETTL ER INSTITUTION. THEREFORE, I AM NOT SATISFIED WITH THE GENUINENESS OF THE TRUST AND THE IRREVOCABLE NATURE OF THE TRUST. HENCE, THE APPLICATION FILED BY THE TRUST FOR REGISTRATION U/S. 12AA OF THE IT ACT IS HEREBY REJECTED. 4. THE LD. COUNSEL FOR THE ASSESSEE ARGUED TH AT THERE IS A PROVISION IN THE TRUST DEED AS PER CLAUSE 20 WHICH STATES THAT THE T RUST IS IRREVOCABLE. HE FURTHER ARGUED THAT VARIOUS CLAUSES MENTIONED IN THE TRUST DEED GAVE POWER TO THE SETTLERS ON THE TRUST AND THE SAID POWER WAS VESTED WITH THE SETTLERS MAINLY TO HAVE CONTROL OVER THE TRUSTEES FOR THE SMOOTH FUNCT IONING OF THE TRUST WHICH CANNOT BE TERMED AS REVOCABLE NATURE OF THE TRUST. HE FURTHER ARGUED THAT THE REGISTRATION CANNOT BE DENIED SINCE ALL THE INCOMES ARE APPLIED FOR THE PURPOSE OF THE TRUST. HE FURTHER ARGUED THAT APPLICABILITY OF SECTIONS 11 AND 61 TO 63 CAN BE MADE ONLY AT THE TIME OF THE ASSESSMENT BY THE A SSESSING OFFICER AND NOT BY THE COMMISSIONER. ACCORDINGLY, HE PRAYED TO REVERS E THE ORDER OF THE CIT. 5. THE LD. CIT(DR), SHRI SHANTAM BOSE, AT THE OUTSE T, RELIED ON THE ORDER OF THE CIT AND INVITED OUR ATTENTION OF VARIOUS REVOCA BLE CLAUSES MENTIONED IN PARA 5 (1) TO (IV) AT PGS. 2 TO 4 OF THE CITS ORDER. HE FURTHER INVITED OUR ATTENTION TO PARA 6 OF THE CIT ORDER WHEREIN THE MANNER IN WHICH THE BOARD OF TRUSTEES HAVE I.T.A. NO.127/COCH/2014 7 TO TAKE THEIR DECISIONS IS NOT SPECIFIED IN THE TRU ST DEED. THE ENTIRE DECISIONS ARE BEING TAKEN BY THE SETTLER ONLY. THE CIT(DR) R ELIED UPON THE DECISIONS MENTIONED IN PARA 7 OF THE ORDER OF CIT AND THE FIN DINGS OF THE CIT IN HIS ORDER. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERU SED THE FACTS OF THE CASE. AT THE OUTSET, MENTIONING OF THE CLAUSES BY THE TRUST AS IRREVOCABLE DOES NOT CHANGE THE OVERALL CHARACTER OF THE TRUST. FROM TH E PERUSAL OF THE CLAUSES OF THE TRUST DEED AS MENTIONED IN THE ORDER OF THE CIT, IT IS EVIDENT THAT THE SETTLER IS ENJOYING THE ENTIRE POWER AS HE WAS HOLDING BEFORE THE CREATION OF THE TRUST. AS REGARDS THE CONTENTION OF THE LD. COUNSEL FOR TH E ASSESSEE THAT THE SETTLER IS HOLDING POWER TO HAVE PROPER MANAGEMENT OF THE TRUS T, IT SHALL NOT MAKE THE REVOCABLE NATURE OF THE TRUST AS IRREVOCABLE IN NAT URE. THE CIT HAS RIGHTLY MENTIONED IN PARA 8 OF HIS ORDER THAT IF THE INTENT ION OF THE SETTLER WAS TO CONTROL THE MISMANAGEMENT OF THE TRUSTEES, IT WOULD HAVE BE EN DONE BY INCORPORATING CERTAIN CONDITION IN ONE OR TWO CLAUSES OF THE TRUS T DEED WITHOUT DISTURBING THE IRREVOCABLE NATURE OF THE TRUST. BUT IN THE PRESEN T CASE, THE SETTLER HOLDS THE ENTIRE POWER WHICH EFFECTS THE LEGAL VALIDITY OF TH E TRUST, AS IN A VALID TRUST, THE TRUST PROPERTY IS ENTRUSTED WITH THE TRUSTEES FOR P ROPER MANAGEMENT FOR THE BENEFIT OF THE BENEFICIARIES. IN THE PRESENT CASE, THE TRUSTEES HAVE NO POWER AND THE ENTIRE POWER IS VESTED WITH THE SETTLER AS MENTIONED HEREINABOVE. WE ARE IN AGREEMENT WITH THE VIEWS OF THE CIT THAT WHE N A CHARITY HAS BEEN FOUNDED AND TRUSTS HAVE BEEN DECLARED, THE FOUNDER HAS NO POWER TO REVOKE, I.T.A. NO.127/COCH/2014 8 VARY OR ADD TO THE TRUSTS WHICH IS IRRESPECTIVE OF THE FACT WHETHER THE TRUSTS HAVE BEEN DECLARED BY AN INDIVIDUAL, OR BY A BODY O F SUBSCRIBERS, OR BY THE TRUSTEES. 7. THE HONBLE CALCUTTA HIGH COURT IN THE CASE O F NARESH SENGUPTA FOUNDATION VS. CIT (CITED SUPRA) HAS HELD THAT A DE ED OF TRUST WHICH QUALIFIES FOR EXEMPTION U/S. 11 CANNOT HAVE ANY STI PULATION RESERVING ANY POWER TO REVOKE OR ALTER THE TERMS OF THE TRUST DEE D, BECAUSE THAT WOULD LEND TO THE TRUST THE CHARACTER OF A REVOCABLE TRUS T ATTRACTING THE PROVISIONS OF SECTIONS 61 AND 63. THE HONBLE SUPREME COURT I N THE CASE OF CIT VS. JAYANTILAL AMRATLAL (CITED SUPRA) HAS EXPLAINED THE TERM RESUMES POWER DIRECTLY OR INDIRECTLY IN SECTION 63 WHICH IMPLIES THAT THERE SHOULD BE SOMETHING IN THE TRUST DEED WHICH ALLOWS RESUMPTION OF PRE-TRUST POWERS. THE SETTLER SHOULD IN SOME WAY GET BACK THE POWERS HE HAD PRIOR TO CREATION OF THE TRUST DEED. IN THE PRESENT CASE, A S MENTIONED IN CLAUSE 5 C, THE SETTLER HAS THE POWER TO NOMINATE NEW PERSON S AS MEMBERS TO THE BOARD OR TO REMOVE ANY EXISTING MEMBER FROM THE BOA RD. HE IS FURTHER EMPOWERED TO REMOVE OR NOMINATE ANY PERSON FROM OR TO THE TRUST AS THE SETTLER WISHES WITHOUT ASSIGNING ANY REASON. INVES TMENT OF FUNDS OF THE TRUST IN ANY MANNER HAS TO BE DONE WITH THE APPROVA L OF THE SETTLERS OF THE TRUST. MONEY HAS TO BE BORROWED AND PROPERTY HAS TO BE PLEDGED ONLY WITH THE SANCTION OF THE SETTLER. PURCHASE OF MOVABLE O R IMMOVABLE PROPERTIES I.T.A. NO.127/COCH/2014 9 AND TO LEASE OUT OR TO DISPOSE OFF THE SAME REQUIRE THE SANCTION OF THE SETTLERS. THUS, AS MENTIONED IN VARIOUS CLAUSES HER EINABOVE, ALL ARE UNDER THE CONTROL OF THE SETTLER WHICH SPEAKS OF THE REVO CABLE NATURE OF THE TRUST. 8. TO SUM UP, THE TRUST IS A PRIVATE TRUST OF TH E SETTLERS AND CANNOT BE GIVEN THE STATUS OF CHARITABLE TRUST. ACCORDINGLY, WE FIND NO INFIRMITY IN THE ORDER OF THE CIT-I, KOCHI WHO HAS RIGHTLY REJECTED THE APPLICATION FILED BY THE ASSESSEE FOR REGISTRATION UNDER SECTION 12AA OF THE ACT. THUS, ALL THE GROUNDS RAISED BY THE ASSESSEE ARE DISMISSED. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESS EE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 07-09-2015. SD/- SD/- (GEORGE GEORGE K.) (B.P. JAIN) JUDICIAL MEMBER ACC OUNTANT MEMBER PLACE: KOCHI DATED: 07TH SEPTEMBER, 2015 GJ COPY TO: 1. SANJO CHARITABLE EDUCATIONAL TRUST, SANJO BHAVAN, CST FATHERS, MULLAKKANAM P.O., RAJAKKAD, IDUKKI-685 566. 2. THE COMMISSIONER OF INCOME-TAX-I, KOCHI. 3. THE COMMISSIONER OF INCOME-TAX, KOCHI 4. D.R., I.T.A.T.,COCHIN. 5. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T., COCHIN I.T.A. NO.127/COCH/2014 10