Sai Love Trust, Secunderabad V. DIT(Exemptions), Hyderabad

ITA 1414/HYD/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 82624 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 04-10-2016
• Assessment Year: misc
• Appeal Filed On: 25-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D SUDHAKAR RAO
• Assessee Lawyers: K K GUPTA
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO. 1414/HYD/2014 ASSESSMENT YEAR NOT APPLICABLE M/S. SAI LOVE TRUST HYDERABAD PAN: AANTS5840B VS. THE DIRECTOR OF INCOME - TAX (EXEMPTIONS) HYDERABAD APPELLANT RESPONDENT APPELLANT BY: SRI K.K. GUPTA RESPONDENT BY: SRI D. SUDHAKAR RAO DATE OF HEARING: 3 0 .1 2 .2014 DATE OF PRONOUNCEMENT: 31 . 12.2014 O R D E R PER ASHA VIJAYARAGHAVAN, JM: THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST ORDER OF THE DIRECTOR OF INCOME-TAX (EXEMPTIONS) [DIT(E)], HYDERABAD DATED 31.7.2014. 2. THE ASSESSEE TRUST, M/S. SAI LOVE TRUST, HYDERABAD, FILED AN APPLICATION IN FORM NO. 10A ON 6.1.2014 SE EKING REGISTRATION U/S. 12AA OF INCOME-TAX ACT, 1961. TH E DIT(E) OBSERVED AS FOLLOWS: 'IN THE FIRST PART OF THE TRUST DEED, IN THE CASE O F THE APPLICANT TRUST, IT IS MENTIONED THAT THE TRUST SHA LL PURSUE THE OBJECTS TO PROMOTE WELL BEING AND BETTER MENT OF RESIDENTS NOT ONLY IN THE STATE OF A.P., BUT ACR OSS INDIA AND OTHER PARTS OF THE WORLD. FROM THE SAME, IT MAY BE NOTICED THAT THE APPLICANT TRUST INTENDS TO CARRY ON ACTIVITIES EVEN OUTSIDE INDIA. THE SAME SHOWS INTENTION OF THE PART OF THE ASSESSEE TRUST TO APPL Y ITS INCOME FOR ITS OBJECTS/PURPOSE OUTSIDE INDIA. THE SAME BEING OPPOSED TO THE PROVISIONS CONTAINED IN SEC. 11(1)(A) OF THE ACT, WHEREIN THERE IS STIPULATION F OR APPLICATION OF INCOME FOR CHARITABLE AND RELIGIOUS PURPOSES ONLY IN INDIA, UNDER THAT CIRCUMSTANCES, ITA NO. 1414/HYD/2014 M/S. SAI LOVE TRUST =================== 2 HAVING REGARD TO THE PROVISIONS OF SEC. 12A(1) OF T HE ACT READ WITH PROVISIONS OF CLAUSE (AA) THEREUNDER, THE APPLICANT TRUST, IN MY VIEW, MAY NOT BE ELIGIBLE FO R REGISTRATION U/S. 12AA OF THE ACT.' 3. THE DIT(E) FURTHER OBSERVED THAT CLAUSE 3(D) OF THE OBJECTS OF THE TRUST STATES AS FOLLOWS: '(D) OTHER CHARITABLE SERVICES/ ACTIVITIES AS AND WHEN NEEDED AS PER THE DECISION OF THE BOARD OF TRUSTEES .' 4. THE DIT(E) OBSERVED THAT THE ABOVE CLAUSE (D) STIPULATES THAT THE BOARD OF TRUSTEES SHALL UNDERTA KE THE OTHER CHARITABLE SERVICES/ACTIVITIES AS PER THEIR D ECISION AND THE NATURE OF SUCH SERVICES/ACTIVITIES WHICH TH E ASSESSEE TRUST INTENDS TO CARRY ON, ARE NOT MENTION ED THEREIN. THE DIT(E) HELD THAT IN THE ABSENCE OF ME NTIONING OF SPECIFIC SERVICES/ACTIVITIES IN CLAUSE 3(D), THE ENTIRE OBJECTS IN THE CASE OF THE APPLICANT TRUST ARE NOT VERIFIABLE. THE DIT(E) CONCLUDED THAT AS PER SECTION 12AA(1)(B) OF THE ACT, THE COMMISSIONER SHALL GRANT REGISTRATION TO A TRUST ONLY AFTER SATISFYING HIMSELF ABOUT OBJECTS OF THE TRUST AND GENUINENESS OF ITS ACTIVITIES AND SINCE IN THE INST ANT CASE THE ENTIRE OBJECTS ARE NOT VERIFIABLE, HE HELD THAT THE APPLICANT TRUST IS NOT ELIGIBLE FOR REGISTRATION U/ S. 12AA OF THE ACT. HENCE, REGISTRATION U/S. 12AA OF THE ACT WAS REFUSED AND THE APPLICATION IN FORM NO. 10A WAS REJ ECTED. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 5. THE LEARNED COUNSEL FOR THE ASSESSEE, SRI K.K. GUPTA, ARGUED THAT IT THE TRUST DEED IT HAS BEEN ME NTIONED THAT THE TRUST SHALL PURSUE THE OBJECTS TO PROMOTE WELL BEING AND BETTERMENT OF THE RESIDENTS NOT ONLY IN T HE STATE OF A.P., BUT ACROSS INDIA AND OTHER PARTS OF THE WO RLD. IT WAS SUBMITTED THAT ACTUALLY THE ASSESSEE HAS APPLIE D ITS ITA NO. 1414/HYD/2014 M/S. SAI LOVE TRUST =================== 3 INCOME ONLY TO THE OBJECTS AND ACTIVITIES IN INDIA AND HENCE NOT OPPOSED TO THE PROVISIONS OF SECTION 11(1)(A) O F THE ACT. 6. THE LEARNED DR RELIED ON THE ORDER OF THE DIT(E). 7. WE HEARD BOTH PARTIES. WE ARE OF THE OPINION THAT THOUGH FACTUALLY IT MIGHT BE THAT THE ASSESSEE TRUS T HAS APPLIED ITS INCOME ONLY FOR ACTIVITIES IN INDIA, NE VERTHELESS, IN THE FIRST PART OF THE TRUST DEED IT IS STATED TH AT THE TRUST SHALL PURSUE OBJECTS TO PROMOTE WELL BEING AND BETT ERMENT OF RESIDENTS NOT ONLY IN THE STATE OF A.P. BUT ACRO SS INDIA AND OTHER PARTS OF THE WORLD. THE TRUST HAS TO CURTAIL ITS ACTIVITIES WITHIN INDIA AND EVEN AN INTENTION TO SP READ ITS ACTIVITIES TO OTHER PARTS OF THE WORLD HAVE EFFECT OF ASSESSEE LOSING REGISTRATION U/S 12AA OF THE ACT, A S THE PROVISIONS OF SECTION 11(1)(A) ARE VIOLATED. 8. HENCE, WE DIRECT THE DIT(E) TO GIVE REGISTRATION TO THE ASSESSEE TRUST PROVIDED THE ASSESSEE CARRIES AN AMENDMENT TO OBJECTS OF THE TRUST BY DELETING THE C LAUSE 'OTHER PARTS OF THE WORLD' IN ITS TRUST DEED. UNLE SS THE ASSESSEE PRODUCES THE AMENDED TRUST DEED WHICH STAT ES THE OBJECT 'TO PROMOTE WELL BEING AND BETTERMENT OF RESIDENTS' WILL BE ENTITLED TO THE RESIDENTS IN A.P . AND ACROSS INDIA ONLY, THE DIT(E) CANNOT GRANT REGISTRA TION U/S. 12AA OF THE ACT. 9. ONE MORE OBJECTION RAISED BY THE DIT(E) WAS WITH REGARD TO CLAUSE 3(D) 'THAT THE CHARITABLE SERVICES AND ACTIVITIES ARE TO BE UNDERTAKEN BY THE TRUST AS AND WHEN NEEDED AS PER THE DECISION OF THE BOARD OF TRUSTEES ', CANNOT BE OBJECTED TO AS CLAUSE (D) HAS TO BE READ ALONG WITH CLAUSES (A), (B) AND (C) WHICH ARE SERVICES RE NDERED TOWARDS MEDI-CARE, EDU-CARE AND SPREADING MESSAGE O F ITA NO. 1414/HYD/2014 M/S. SAI LOVE TRUST =================== 4 LOVE AND SERVICE OF SATYA SAI. HENCE THE OTHER CHAR ITABLE ACTIVITIES MENTIONED IN CLAUSE (D) WOULD MERELY BE IN THE SAME LINES AS MENTIONED IN CLAUSES (A), (B) AND (C) . HENCE, WE ARE OF THE OPINION THAT SPECIFIC VERIFICA TION WOULD NOT BE NECESSARY AS THE OTHER CHARITABLE SERV ICES WOULD MERELY BE AN EXTENSION OF THOSE MENTIONED IN CLAUSES (A), (B) AND (C) AND AKIN TO THE SAME. 10. TO CONCLUDE, THE TRUST SHALL BE GRANTED REGISTRATIO N ON PRODUCTION OF AMENDED TRUST DEED AS STATED ABOVE . 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FO R STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 31 ST DECEMBER, 2014. SD/ - (P.M. JAGTAP) ACCOUNTANT MEMBER SD/ - (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER HYDERABAD, DATED 31 ST DECEMBER, 2014 TPRAO COPY FORWARDED TO: 1. M/S. SAI LOVE TRUST, C/O. SRI K.K. GUPTA, FCA, KATRAPALLI & CO., CHARTERED ACCOUNTANTS, 3464, DUNDOO VIHAR, R.P. ROAD, SECUNDERABAD-03. 2. THE DIRECTOR OF INCOME - TAX (EXEMPTIONS), AAYAKAR BHAVAN, BASHEERBAGH, HYDERABAD. 3. THE DDIT(E) - I , HYDERABAD . 4 . THE DR ' B ' BENCH, ITAT, HYDERABAD