Shri Kutchi Dasa Oswal Moto Pariwar, GANDHIDHAM V. The Commissioner of Income Tax, Rajkot-1, RAJKOT-GUJARAT

ITA 1282/RJT/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 7352 (ITAT-RAJKOT)
• Duration Of Justice: 2 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: misc
• Appeal Filed On: 25-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AVINASH KUMAR
• Keywords: Charitable institution
• Section: 12A; 12AA; 250; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH SMC, RAJKOT BEFORE SHRI A.L. GEHLOT (AM) I.T.A. NO. 1282/RJT/2010 SHRI KUTCHI DASA OSWAL VS THE CIT-I MOTO PARIWAR AMBAMA TRUST RAJKOT VILLAGE TERA FALIA DIST, ABADASA PAN : AABTK5863C (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI KALPESH DOSHI RESPONDENT BY: SHRI AVINASH KUMAR O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF CIT-I, RAJKOT, DATED 29-09-2010. THE GROUND RAISED IN THE APPEAL IS IN RESPECT OF NOT ALLOWING REGISTRATION U/S 12A / 12AA OF THE ACT . 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E TRUST MADE AN APPLICATION FOR REGISTRATION U/S 12AA(A) OF THE ACT ON 26-03-2010 IN FORM NO.10A ALONGWITH COPY OF TRUST DEED AND REGISTRATIO N CERTIFICATE DATED 04- 02-2010. THE COMMISSIONER OF INCOME-TAX NOTICED TH AT THE OBJECTS OF THE TRUST ARE MAINLY RELIGIOUS. THE COMMISSIONER ASKED THE ASSESSEE TO PRODUCE THE EVIDENCE REGARDING EXPENSES INCURRED TO WARDS THE OBJECT OF THE ORGANIZATION AND BRIEF NOTE ON THE ACTIVITIES C ARRIED OUT BY THE TRUST SINCE ITS INCEPTION ALONGWITH DOCUMENTARY EVIDENCE IN SUPPORT THEREOF. THE ASSESSEE VIDE LETTER DATED 23-09-2010 HAS SUBMI TTED THAT THERE WAS NO ACTIVITIES TILL 31-03-2010 AS VERY LITTLE TIME W AS LEFT TO CARRY OUT ACTIVITIES DURING THE YEAR ENDED 31-03-2010. HOWEVER, ACTUAL ACTIVITY WOULD START IN COMING NAVRATRI. THE COMMISSIONER OF INCOME-TAX RE JECTED THE ITA NO.1282//RJT/2010 2 ASSESSEES SUBMISSION AS THE ASSESSEE DID NOT FURNI SH ANY DOCUMENTARY EVIDENCE REGARDS ITS ACTIVITIES. THE COMMISSIONER NOTED THAT THERE IS NOTHING ON RECORD FROM WHICH THE GENUINENESS OF THE ACTIVITIES OF THE ASSESSEE TRUST COULD BE ESTABLISHED. HE ACCORDINGL Y REJECTED ASSESSEES APPLICATION FOR REGISTRATION. 3. THE LD.AR SUBMITTED THAT THE ASSESSEE TRUST WAS CONSTITUTED THROUGH TRUST DEED DATED 04 TH FEBRUARY 2010. THE SAME WAS REGISTERED WITH NAYAB CHARITY COMMISSIONER, KUTCH PRADESH, BHUJ. HE FURT HER SUBMITTED THAT THE ASSESSEE TRUST ALSO GOT PERMANENT ACCOUNT NO AABTK5 863C, ITO, WARD : GANDHIDHAM. THE LD.AR SUBMITTED THAT THE ASSESSEE TRUST WAS CONSTITUTED FOR RELIGIOUS PURPOSE. CHARITABLE ACTIVITIES INCLU DE RELIGIOUS ACTIVITIES. IN SUPPORT OF HIS CONTENTION, THE LD.AR RELIED UPON TH E FOLLOWING JUDGMENTS: CIT VS SOCIAL SERVICE CENTRE 250 ITR 39 (AP) DHARMA SANSTHAPAK SANGH (NIYAS) VS CIT 118 TTJ (DE L) 823 SARDARI LAL OBERAI MEMORIAL CHARITABLE TRUST VS IT O 3 SOT 229(DEL) THE LD.AR POINTED OUT THE OBJECTS OF THE TRUST AND CLAUSE REGARDING THE DISSOLUTION. THE ORIGINAL TRUST DEED IS IN GUJARAT I, A FREE ENGLISH TRANSLATION OF THE RELEVANT CLAUSES 4 & 12 ARE FILED ON RECORD, WHICH READS AS FOLLOWS: 4. OBJECTIVES: (A) FOR THE ESTABLISHMENT, MAINTENANCE AND ADMINIST RATION OF KULDEVI AMBAMAA TERA, TRUST. SO THAT DEVOTEES CAN PERFORM RELIGIOUS CEREMONY PEACEFULLY, WITHOUT ANY PROBLEMS. (B) THE DEVOTEES OF THE COMMUNITY EVERY YEAR SHOULD PERFORM RELIGIOUS CEREMONY TOGETHER AND TAKE THE P RASAD SO THAT THERE WOULD BE UNITY, LOVE AND AFFECTION AND B ONDING AMONGST THE MEMBERS OF THE COMMUNITY. ITA NO.1282//RJT/2010 3 (C) TO UNDERTAKE THE ACTIVITIES FOR THE PROGRESS OF THER DEVOTEES OF AMBAMAA TERA, TO PUBLISH PHOTOS AND REL IGIOUS LITERATURE FRO PROMOTING BELIEF IN KULDEVI AND RE LIGIOUS ACTIVITIES. 5. DISSOLUTION TRUSTEES APPOINTED UNDER THE DEED OF THE TRUST IN S HRI KUTCHI DASA OSWAL MOTA PARIVAR AMBAMAA TRUST, TERA, ARE NO T EMPOWERED TO TAKE ANY DECISIONS OR PASS ANY RESOLUT ION AS REGARDS DISSOLUTION OF THE TRUST. BUT IN CASE OF A NY UNFORESEEN SITUATIONS OR EVENT WHICH MAY LEAD TO THE DISSOLUTI ON OF THE TRUST THEN IN SUCH CASE TRUST FUND WILL NOT BE DIST RIBUTED OR DIVIDED FOR ANY PERSONAL BENEFITS OF THE TRUSTEES O R ANY OTHER PERSONS. THE FUNDS OF THE TRUST SHALL BE HANDED OV ER ONLY FOR THE ADMINISTRATION, BENEFITS AND WELL BEING OF KUL DEVI OF MOTA PARIVAAR OR TO ANY OTHER TRUST OR INSTITUTION HAVIN G SIMILAR OBJECTIVES. FOR THE DISSOLUTION OF THE TRUST SPECI AL MEETING SHALL BE CONVEYED INVITING EVERY MEMBER THROUGH LET TERS FOR THE MEETING AND THE RESOLUTION FOR THE DISSOLUTION SHALL BE PASSED BY THE MINIMUM 90% OF MEMBERS PRESENT AND VO TING IN FAVOR OF THE RESOLUTION. ON 07/-4/2009 THE ABOVE MENTIONED AMENDMENT AND ADDITIONS WERE MADE IN THE DEED BY PASSING A RESOLU TION BY MAJORITY IN THE PRESENCE OF FOLLOWING MEMBERS OF MO TA PARIVAAR. 4. THE LD.AR SUBMITTED THAT THE ACTIVITIES OF THE T RUST ARE GENUINE ACTIVITIES AS IS EVIDENT FROM THE TRUST DEED. THE COMMISSIONER OF INCOME- TAX IS NOT CORRECT IN SAYING THAT THE ASSESSEE COUL D NOT ESTABLISH THE GENUINENESS OF ACTIVITIES OF THE ASSESSEE TRUST MER ELY ON THE FACTS THAT THE ASSESSEE COULD NOT START ITS ACTIVITIES TILL 31-03- 2010. 5. THE LD.DR, ON THE OTHER HAND, RELIED UPON THE OR DER OF THE COMMISSIONER OF INCOME-TAX. ITA NO.1282//RJT/2010 4 6. I HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PARTIES, RECORD PERUSED AND GONE THROUGH THE DECISIONS CITED. THE BASIS OF REJECTION OF ASSESSEES APPLICATION BY THE COMMISSIONER IS THAT THE ASSESSEE COULD NOT START ITS ACTIVITIES TILL 31-03-2010. EXCEPT THIS, THERE WERE NO OTHER REASONS FOR REJECTION OF ASSESSEES APPLICATION. SO FAR AS THE ACTIVITIES OF THE TRUST ARE CONCERNED SECTION 12A LAYS DOWN CERTAIN CONDITI ONS FOR APPLICABILITY OF SECTIONS 11 & 12. SECTION 12A(1)(A) PRESCRIBED THA T THE PERSON IN RESPECT OF THE INCOME HAS MADE AN APPLICATION FOR REGISTRAT ION OF THE TRUST OR INSTITUTION IN THE PRESCRIBED FORM AND IN THE PRESC RIBED MANNER TO THE COMMISSIONER BEFORE THE PRESCRIBED PERIOD. SECTION 12AA PROVIDES THE PROCEDURE FOR REGISTRATION. THE SAID SECTION PROVI DES THAT COMMISSIONER ON RECEIPT OF AN APPLICATION FOR REGISTRATION OF TR UST SHALL CALL FOR SUCH DOCUMENTS OR INFORMATION FROM THE TRUST OR INSTITUT ION AS HE THINKS NECESSARY IN ORDER TO SATISFY HIMSELF ABOUT THE GEN UINENESS OF THE ACTIVITIES OF THE TRUST AND MAY ALSO MAKE SUCH ENQUIRIES AS HE MAY DEEM NECESSARY IN THIS BEHALF AND AFTER SATISFYING HIMSELF ABOUT T HE OBJECT OF THE TRUST AND THE GENUINENESS OF HIS ACTIVITY HE SHALL PASS ORDER IN WRITING REGISTERING THE TRUST OR REFUSING THE REGISTRATION TO THE TRUST. O N PLAIN READING OF SECTION 12AA I FIND THAT AT THE TIME OF GRANTING REGISTRATI ON THE COMMISSIONER HAS LIMITED POWER ONLY TO EXAMINE THE OBJECT OF THE TRU ST AND GENUINENESS OF THE ACTIVITIES OF THE TRUST AND FOR THAT PURPOSE HE MAY CALL FOR SUCH DOCUMENT OR INFORMATION FROM THE TRUST. IN THE CAS E UNDER CONSIDERATION THE COMMISSIONER DID NOT DISPUTE ABOUT THE CHARITAB LE ACTIVITIES AS INDICATED IN THE OBJECT CLAUSE OF THE ASSESSEE. ON PERUSAL OF ORDER OF THE COMMISSIONER OF INCOME-TAX I FIND THAT THE COMMISSI ONER WAS OF THE VIEW THAT SINCE THERE WAS NO ACTIVITY THE ASSESSEE DID N OT SATISFY THE CONDITION ABUT THE GENUINENESS OF THE ACTIVITIES, WHICH IN MY VIEW, IS NOT CORRECT. WHEN THERE ARE NO ACTIVITIES AT ALL, THEN THERE IS NO QUESTION OF HOLDING THAT THE ACTIVITIES WERE NON GENUINE. THE GENUINENESS O F THE ACTIVITIES ONLY CAN ITA NO.1282//RJT/2010 5 BE VERIFIED WHEN THERE IS SOME ACTIVITY. IN CASE W HERE THE ASSESSEE TRUST DID NOT START CHARITABLE ACTIVITY AT THE TIME OF GR ANTING REGISTRATION, THE SAME CAN BE VERIFIED FROM THE OBJECT CLAUSE. THIS VIEW IS FORTIFIED BY VARIOUS DECISIONS INCLUDING THE DECISIONS CITED BY THE LD.A R, SOME OF WHICH ARE - 212 CTR (ALL) 394 CIT VS RED ROSE SCHOOL 118 TTJ (DEL) 823 DHARMA SANSTHAPAK SANGH (NIYAS) VS CIT 3 SOT 229 (DEL) SARDARI LAL OBERAI MEMORIAL CHARIT ABLE TRUST VS ITO 104 TTJ (CHEN)(TM) 467 PEOPLE EDUCATION & ECONOMIC DEVELOPMENT SOCIETY (PEEDS) VS ITO IN THE LIGHT OF ABOVE DISCUSSION I FIND THAT THE TR UST HAS SATISFIED THE CONDITION AS REGARDS THE OBJECTS AND GENUINENESS OF THE ACTIVITIES. THEREFORE, ASSESSEE TRUST IS ENTITLED FOR REGISTRAT ION U/S 12A OF THE ACT. I DIRECT THE COMMISSIONER OF INCOME-TAX TO GRANT REGI STRATION TO THE ASSESSEE TRUST AS APPLIED FOR. 7. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11-02-2011. SD/- (A.L. GEHLOT) ACCOUNTANT MEMBER RAJKOT, DT : 11 TH FEBRUARY, 2011 PK/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-I, RAJKOT 4. THE DR (TRUE COPY) BY ORDER ASSTT.REGISTRAR, ITAT, RAJKOT