Dawoodi Bohra Masjid, Banaskantha V. The Pr. CIT (OSD) (Exemptions), Ahmedabad

ITA 1626/AHD/2015

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9050 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 01-03-2017
• Assessment Year: misc
• Appeal Filed On: 08-06-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Question of law
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92; 12AA; 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH BEFORE: SHR I R. P. TOLANI , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER DAWOODIBOHRA MASJID BOHRA MASJID, POST. TOTANA, VIA UNN, DIST. BANASKANTHA - 385560 (APPELLANT) VS PRINCIPAL COMMISSIONER OF INCOME TAX (OSD)(EXEMPTIONS), AHMEDABAD (RESPONDENT) REVENUE BY : S H RI R.I. PATEL, CIT - D . R. ASSESSEE BY: S H RI HARDIK VOHRA , A.R. DATE OF HEARING : 01 - 03 - 2 017 DATE OF PRONOUNCEMENT : 02 - 03 - 2 017 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THIS ASSESSEE S APPEAL AR ISES FROM ORDER OF THE PRINCIPAL CIT(OSD)(EXEMPTIONS), AHMEDABAD DATED 31 - 03 - 2015 IN APPEAL NO. PR.CIT(E)/AHD / 12AA/DBM/2014 - 15/11 , IN PROCEEDINGS UNDER SECT ION 12AA OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . I T A NO . 1626 / A HD/20 15 A SSESSMENT YEAR N. P. I.T.A NO. 1626 /AHD/20 15 A.Y. N.A. PAGE NO DAWOODI BOHRA MASJID VS. PRINCIPAL CIT (OSD) (E) 2 2. THE AS SESSEE HAS RAISED FOLLOWING GROUND OF APPEAL: - 1. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED DIRECTOR OF INCOME TAX (EXEMPTION) HAS ERRED IN REJECTING APPLICATION FOR REGISTRATION U/S 12AA OF THE ACT. 3. IN THIS CASE, ASSESSEE TRUST HAS SUBMITTED APPLICATION FOR REGISTRATION U/S. 12AA OF THE ACT IN THE OFFICE OF DIT(E), AHMEDABAD ON 14 TH MARCH, 2013. THE DIT(E) HAS REJECTED THE APPLICATION OF THE TRUST AS UNDER : - 4. IN THIS CASE IT IS SEEN FROM THE APPLICATION/RECORD THAT THERE IS NO TRUST DEED FILED BY THE ASSESSEE. THE TRUST HAS FURNISHED THE COPY OF LETTER DATED 20/11/1999 OF GUJARTAT STATE WAKF BOARD, GANDHINAGAR, WHICH TH EY ARE CALLING AS T RUST DEED AND AS EVIDENCE OF TH E TRUST AND THE COPY OF R EGISTER OF GUJARAT STA T WAKF BOARD, GANDHINAG AR. TH E CERTIFICATE OF REGISTRATION WITH GUJARAT STATE WAKF BOARD, GANDHINAGAR WITH EFFECT FROM 20/10/2001 IS FURNISHED. THEREFORE THE TRUST WAS REQUESTED TO FILED THE CERTIFIED COPY OF THE TRUST DEED ALONG WIT H OTHER REQUIRED DETAILS. IN RESPONSE TO QUERY LETTER ISSUED ON 2 8/06/2013, THE ASSESSEE HAS FILED TH E REPLY ON 25/07/2013 AND AGAIN FILED THE COPY OF ABOVE MENTIONED DOCUMENTS. IT IS CLEAR THAT THE TRUST HAS NO TRUST DEED. 5. FURTHER THE TRUST HAS FURNI SH ED THE WRITTEN SUBMISSION ON 16.08.2013 AND ARGUED THAT TH ERE IS NO SPECIFIC CLAUSE OF REVOCABILITY OR I RREVOCABILITY AS PER TRUST DEED. HOW EVER, THE TRUST IS AS PER MUMBAI PUBLIC TRUST ACT, 1950, HENCE THE TRUST IS IRREVOCAB LE TRUST, AND IN ANY CASE IF THE TRUST IS REQUIRED TO BE DISSOLVED, THE SAME BY DEFAULT SHALL BE GOVERNED BY THE PROVISION OF THE BOMBAY PUBLIC TRU ST ACT. FOR THE PROPOSITION THAT INCORPORATION OF IRREVOCABLE CLAUSE IS NOT MANDATORY IN TRUST DEED. ' 6. THE APPLICANT'S SUBMISSION IS CO NSIDERED BUT NOT ACCEPTED. AS PER IT. RULE INFORM 10A CLAUSE 5(1) SAYS THAT CERTIFIED COPY OF THE INSTRUMENT UNDER WHICH THE TRUST WAS CREATED/ESTABLISHED TOGETHER WITH THE COPY THEREOF MUST BE ENCLOSED WITH THE APPLICATION FOR REGISTRATION, EVIDENCING THE CREATION OF THE TRUST OR ESTABLISHMENT OF THE TRUST. THERE MUST BE WRITTEN INSTRUMENTS BY WAY OF WHICH THE TRUST OR INSTRUMENT IS CREATED/ESTABLISHED FROM WHICH ITS OBJECTS CAN BE SEEN. IN THE ABSENCE OF THE DEED, IT CANNOT BE KNOWN WHAT WERE THE OBJECTS OF THE TRUST ORIGINALLY, WHETHER, THE I.T.A NO. 1626 /AHD/20 15 A.Y. N.A. PAGE NO DAWOODI BOHRA MASJID VS. PRINCIPAL CIT (OSD) (E) 3 OBJECTS HAVE SINCE CHANGED. IF THE TRUST CHANGES ITS OBJECTS ON FUTURE AGAIN IT WOULD NOT BE VERIFIABLE. WHETHER THE TRUST IS FAR ANY PARTICULAR CASTE, CREED ETC. CANNOT ALSO BE KNOW. IN THE ABSENCE OF DEED, IT CANNOT BE KNOWN AS TO WHAT WILL HAPPEN TO ASSETS UPON ITS DISSOLUTION, AND EVEN ITS OBJECTS CANNOT BE VERIFIED AS REQUIRED BY SECTION 12AA(1). HENCE, THE APPLICATION FILED IN FORM NO. 10A FOR REGISTRATION U/S. 12AA OF THE IT. ACT IS REJECTED. 7. MOREOVER, THE T RUST IS VERY OLD AND IT IS CHARITABLE AND RELIGIOUS TRUST AND THE MAIN ACTIVITY OF THE TRUST IS RELIGIOUS AND FOR GENERAL PUBLIC, UTILITY. HOWEVER, THE TRUST EVEN THOUGH REGISTERED WITH GUJARAT STATE WAKF BOARD, GANDHINAGAR WITH EFFECT FROM 20/01/2001 STIL L IT HAS SIMPLY STATED, NO SUBSTANTIAL ACTIVITY IS STARTED. IT IS NOT UNDERSTOOD WHAT IT HAS BEEN DOING FOR LAST 14 YEARS. THEREFORE, IN THE ABSENCE OF TRUST DEED NO ACTIVITY CAN BE VERIFIED AND NO OBJECTS CAN BE EXAMINED. 8. LOOKING TO THE ABOVE, I AM UN ABLE TO ARRIVE AT THE SATISFACTION OF THE GENUINENESS OF THE ACTIVITIES. IN VIEW OF THE ABOVE, THE APPLICATION FLIED IN FORM NO. 10A FOR THE REGISTRATION U/S. 12AA OF THE IT. ACT, 1961 IS REJECTED.' 4. AGGRIEVED AGAINST THE ORDER OF THE DIT(E) THE ASSES SEE TRUST FILED APPEAL BEFORE THE HON BLE ITAT, THE HON BLE ITAT VIDE ITS ORDER 29 TH NOVEMBER, 2013 HAS RESTORED TH IS MATTER BACK TO THE ASSESSING OFFICER FOR FRESH ADJUDICATION BY OBSERVING AS UNDER: - 2. AT THE TIME OF HEARING LEARNED COUNSEL OF THE ASSE SSEE SUBMITTED THAT ASSESSEE VIDE ITS LETTER DATED 25 - 07 - 2013 HAS FILED THE CERTIFIED COPY OF WAQF DEED (TRUST DEED) AND ALSO ATTACHED LIST OF MAIN OBJECTS OF THE TRUST. THOUGH THIS LETTER HAS BEEN ACKNOWLEDGED BY THE DIT(EXEMPTION) IN HIS ORDER BUT EVEN THEN HE HAS REJECTED THE APPLICATION OF THE ASSESSEE. HE THEREFORE PRAYED THAT ASSESSEE BE GIVEN ONE MORE OPPORTUNITY TO PRESENT HIS CASE BEFORE THE LD. DIT(EXEMPTION). LD. DR DID NOT OBJECT TO THIS PRAYER OF THE LEARNED COUNSEL OF THE ASSESSEE. THEREFO RE, THE MATTER IS BEING RESTORED BACK TO THE FILE OF AO FOR FRESH ADJUDICATION AFTER GIVING PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. I.T.A NO. 1626 /AHD/20 15 A.Y. N.A. PAGE NO DAWOODI BOHRA MASJID VS. PRINCIPAL CIT (OSD) (E) 4 SUBSEQUENTLY THE DIT(E) VIDE ITS ORDER DATED 31 ST MARCH, HAS REJECTED THE APPLICATION U/S. 12AA BY OBSERVING AS UNDER: - WITH THE DIRECTION OF 'ITAT, THE OFFICE OF THE UNDERSIGNED VIDE THIS OFFICE LETTERS EVEN NUMBER DATED 17.03.2015 ASKED TO PRODUCED: FOLLOWING DETAILS/ DOCUMENTS. 1. PLEASE SUBMIT LIST OF MAIN OBJECTS OF THE TRUST AS YOU HAVE SIMPLY SUBMITT ED UNSIGNED PIECE OF PAPER CLAIMING THEREIN OBJECTS OF THE TRUST. THE SAME CANNOT BE TAKEN INTO CONTINGENCE AS IT IS NOT SUPPORTED WITH ANY COGENT EVIDENCE. 2. PLEASE SPECIFY THE CLAUSE IN TRUST DEED REGARDING REVOCABILITY OR IRREVOCABILITY. 3. P LEASE SPECIFY THE CLAUSE IN THE TRUST DEED WHICH SAYS THAT BENEFICIARIES WOULD BE WITHOUT DISCRIMINATION ON THE BASIS OF CASTE, CREED, RELIGION OR SEX. 4. FURTHER, IT IS SEEN THAT AS PER TRUST DEED THE DISSOLUTION CLAUSE IS NOT PROPER. THE ABOVE - ME NTIONED INQUIRY ABOUT THE ACTUAL ACTIVITIES OF THE TRUST IS NECESSARY IN VIEW OF THE MANDATORY PROVISIONS OF THE PROCEDURE FOR REGISTRATION U/S 12AA ACCORDING TO WHICH THE DIT (EXEMPTION) 'SHALL - (A) CALL FOR SUCH DOCUMENTS OR INFORMATION FROM THE TRUST OR INSTITUTION AS HE THINKS NECESSARY IN ORDER TO SATISFY HIMSELF ABOUT THE GENUINENESS OF ACTIVITIES OF THE TRUST OR INSTITUTION AND MAY ALSO MAKE SUCH INQUIRIES AS HE MAY DEEM NECESSARY IN THIS BEHALF; AND (B) AFTER SATISFYING HIMSELF ABOUT THE OBJECTS O F THE TRUST OR INSTITUTION AND THE GENUINENESS OF ITS ACTIVITIES, HE - (C) SHALL PASS AN ORDER IN WRITING REGISTERING THE TRUST OR INSTITUTION; (D) SHALL, IF HE IS NOT SO SATISFIED, PASS AN ORDER IN RVNTING REFUSING TO REGISTER THE TRUST OR INSTITUTION, AN D A COPY OF SUCH ORDER SHALL BE SENT TO THE APPLICANT : PROVIDED THAT NO ORDER UNDER SUB - CLAUSE (II) SHALL BE PASSED UNLESS THE APPLICANT HAS BEEN GIVEN A REASONABLE OPPORTUNITY OF BEING HEARD.' IN RESPONSE TO THE AFORESAID LETTER, THE APPLICANT TRUST VI DE ITS LETTER DATED 25.03.2015 SOUGHT FOR AN ADJOURNMENT. ACCORDINGLY THE CASE WAS RELAXED FOR HEARING ON 30.03.2015. ON A GIVEN DATE, THE APPLICANT TRUST SUBMITTED ITS INTER ALIA WHICH IS RE PRODUCED AS UNDER. I.T.A NO. 1626 /AHD/20 15 A.Y. N.A. PAGE NO DAWOODI BOHRA MASJID VS. PRINCIPAL CIT (OSD) (E) 5 2. PLEASE NOTE THAT THERE IS NO SPECIFIC CLA USE OF REVOCABILITY OR IRREVOCABILITY AS PER TRUST DEED. HOWEVER IN THE FIRST PARA OF DEED ATTACHED HEREWITH, PLEASE NOTE THAT TRUST IS AS PER MUMBAI PUBLIC TRUST ACT, 1950 AND HENCE IRREVOCABLE. 3. PLEASE NOTE THAT THE TRUST IS BASED ON RELIGIOUS TENETS UNDER THE QURAN ACCORDING TO THE RELIGIOUS FAITH OF ISLAM. THE OBJECTS ARE BOTH CHARITABLE AND RELIGIOUS. THE SIMILAR TYPE OF WAKF NAMELY DAWOODI BOHRA' JAMAT WAS ALLOWED THE REGISTRATION BY ITAT, AHMEDABAD AND ORDER ALLOWING REGISTRATION WAS CONFI RMED BY THE HON'BIE GUJARAT HIGH COURT (TAX APPEAL 1187/2006 (GUJ), ORDER ATTACHED. 4. AS STATED IN PARA 2 ABOVE, TRUST IS IRREVOCABLE AND SEPARATE DISSOLUTION CLAUSE IS NOT REQUIRED TO BE ADDED. FOR THIS PROPOSITION, WE ARE RELYING ON DECISION OF AHMED ABAD ITAT IN SHREE VANCHHARA TIRTHADIPATI CHINTAMANI PARSWAPRABHU TRUST V/S ADIT(E) ITA NO. 610/ AHD/2013(ORDER ATTACHED HEREWITH.) IT IS PERTINENT TO NOTE THAT THE SAID ORDER IS CONFIRMED BY HONORABLE JURISDICTIONAL HIGH COURT IN TAX APPEAL NO. 548 OF 20 14. HOWEVER AS PER THE ORDER COPY IS NOT AVAILABLE AS ON DATE, ARE ATTACHING HEREWITH QUESTION OF LAW ADMITTED BY HONBLE HIGH COURT AND THE STATUS OF THE APPEAL FROM THE SIDE OF HON'BLE HIGH COURT WHICH STATES APPEAL AS DISMISSED. ACCORDINGLY ISSUE IS SETT LED BY JURISDICTIONAL HIGH COURT IN FAVOUR OF ASSESSEE AND NO SEPARATE DISSOLUTION CLAUSE IS REQUIRED. THE ABOVE SUBMISSION OF THE APPLICANT IS CONSIDERED CAREFULLY AND FOUND NOT ACCEPTABLE AS APPLICANT TRUST HAS NOT GIVEN ANY EXPLANATION IN RESPECT QUER Y RAISED. INSTEAD OF SUBMITTING COPY OF TRUST DEED, THE APPLICANT TRUST SUBMITTED COPY OF GUJARAT WAKF BOARD WHICH CANNOT BE SAID A TRUST DEED AT ALL. 5. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, THE LEARNED COUNSEL STA TED THAT DIRECTOR OF IN COME TAX (E) HAS ERRED IN REJECTING THE APPLICATION U/S. 12AA OF THE ACT AS THE ASSESSEE TRUST COMES UNDER THE GUJARAT STATE WAKF BOARD, GANDHINAGAR. HE ALSO I.T.A NO. 1626 /AHD/20 15 A.Y. N.A. PAGE NO DAWOODI BOHRA MASJID VS. PRINCIPAL CIT (OSD) (E) 6 FURNISHED PAPER BOOK CONTAINING ORDER OF ITAT IN THE FIRST ROUND (ITA NO. 2411/AHD/2013) , REPLY T O PR. CIT(E) DATED 28/02/2015 , OBJECTS OF WAQF AS CERTIFIE D BY MUNTAZEEM, WAKF DEED WITH E NGLISH TRANSLATION AND RE G I ST ER SHOWING NAME OF ASSESSEE WAKF, SHREE PRENTIJ DASHA SHRIMALI VANIK GYANTI TRUST (ITA NO. 407/AHD/2013) AND SHIYA DAWOODI BOHRA JAMAT VS . CIT - 1 (ITA NO. 208/IND/2011. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF THE DIT(E). 6. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD. WE NOTICED THAT THE ASSESSE TRUST IS BASED ON RELIGIOUS TENETS UNDER THE Q URAN AND ACCORDING TO THE RELIGIOUS FAITH OF ISLAM. FURTHER WE NOTICED THAT ASSESSEE TRUST HAS BEEN RERISTERED WITH THE GUJARAT STATE WAKF BOARD AS PER BOMBAY PUBLIC TRUST ACT, 1950 . AS PER T HE OBJECT OF THE W AFK SURPLUS INCOME AFTER MEETING THE ADMINISTRATIVE EXPENSE S AND REPAIR WOR K OF WAKF ASSESTS WOULD BE USED FOR ALL THE PURPOSES(RELIGIOUS OR CHARITABLE ) . WE HAVE NOTICED THAT THE WAKF ACT, 1950, APPLICABLE FOR ALL OVER GUJARAT STATE AND AS PER THE PROVISION OF THIS ACT GUJARAT STATE WAKF BOARD HAS REGISTE RED THE ASSESSEE TRUST SINCE 1992 .WE HAVE GONE THROUGH THE REGISTRATION DETAIL MENTIONED UNDER THE PARTICULARS AS W AKF NAME AND ADDRESS, S H IYA AND SUNNI , MUTVALLI/MANAGER S NAME AND ADDRESS, OBJECTS OF THE WAQF, HOW TO APPOINT MANAGER AND ADDRESS OF WAKF ETC. . WE OBSERVE D THAT THE ABOVE MENTIONED INFORMATION AND DOCUMENTS INDICATE THE EXISTENCE OF TRUST AS PER THE REGISTRATION CERTIFICATE OF GUJARAT STATE WAKF BOARD WHICH CERTIFY THE OBJECT OF THE TRUST, I.T.A NO. 1626 /AHD/20 15 A.Y. N.A. PAGE NO DAWOODI BOHRA MASJID VS. PRINCIPAL CIT (OSD) (E) 7 APPOINTMENT OF MANAGERS ETC. AS ELABORATE D ABOVE IN THIS ORDER , THEREFORE, WE CONSIDERED THAT LOOKING TO THE NATURE OF TRUST NO SEPARATE TRUST DEED IS REQUIRED . IN VIEW OF ABOVE MENTIONED FACTS AND LEGAL FINDINGS, WE DO NOT JUSTIFY THE DECISION OF DIT(E) TO REJECT THE APPLICATION OF THE ASSESS EE T RUST U/S. 12AA OF THE ACT THEREFORE, THE APPEAL OF THE ASSESSEE IS ALLOWED. 7. IN THE RESULT , THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 02 - 03 - 201 7 SD/ - SD/ - ( R. P. TOLANI ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 02 /03 /2017 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER / , / ,