M/s.V.Thirteen Trust, Bangalore V. Commissioner of Income Tax, Bangalore

ITA 1682/BANG/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 0185 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 11 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2016-2017
• Appeal Filed On: 21-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Set aside
• Section: 12A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ITA NO. 1682/BANG/2016 ASSESSMENT YEAR : N.A. V. THIRTEEN TRUST, NO.95, 2 ND CROSS, 6 TH MAIN, R.T. NAGAR, 4 TH BLOCK, BANGALORE 560 028. PAN: AA B TV 9475B VS. THE COMMISSIONER OF INCOME TAX (EXEMPTIONS), BANGALORE. APP ELL ANT RESPONDENT APPELLANT BY : SHRI K.S. NAGESH, CA RESPONDENT BY : SHRI D. SUDHAKAR RAO, CIT(DR)(ITAT), BENGALURU. DATE OF HEARING : 11.09 .201 8 DATE OF PRONOUNCEMENT : 12 .09 .201 8 O R D E R PER N.V. VASUDEVAN, JUDICIAL MEMBER THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DATED 29.07.2016 OF THE CIT(EXEMPTIONS), BENGALURU [THE CIT(E)] RE JECTING THE APPLICATION FOR GRANT OF REGISTRATION U/S. 12A OF THE INCOME-TA X ACT, 1961 [THE ACT] 2. THE ASSESSEE, WHICH A TRUST CLAIMING TO BE A CHA RITABLE INSTITUTION, FILED AN APPLICATION FOR GRANT OF REGISTRATION U/S. 12A ON 22.01.2016. THE CIT(E) ISSUED LETTER DATED 31.5.2016 AND 8.7.2016 C ALLING UPON THE ASSESSEE TO FURNISH CERTAIN DETAILS. IT APPEARS TH AT THE ASSESSEE FILED ITA NO.1682/BANG/2016 PAGE 2 OF 4 CERTAIN DETAILS ON 21.07.2016, WHICH ACCORDING TO T HE CIT(E), WERE NOT COMPLIED WITH BY THE ASSESSEE. THE CIT(E) IN THE I MPUGNED ORDER AFTER REFERRING TO THE ABOVE EXCHANGE OF CORRESPONDENCE F URTHER OBSERVED THAT THE TRUST DEED DATED 20.11.2014 UNDER WHICH THE ASS ESSEE CAME INTO EXISTENCE WAS NOT REGISTERED AND THEREFORE THE SAME IS NOT VALID IN LAW. THE CIT(E) ACCORDINGLY HELD THAT HE COULD NOT VERIF Y THE SATISFACTION OF THE CONDITIONS FOR GRANT OF REGISTRATION U/S. 12A OF TH E ACT BECAUSE OF THE ASSESSEES NEGLIGENCE IN NOT GIVING RELEVANT DETAIL S. ACCORDINGLY, THE CIT(E) DISMISSED THE APPLICATION OF ASSESSEE FOR GR ANT OF REGISTRATION ON THE ABOVE GROUNDS AND ALSO ON THE GROUND THAT THE ASSES SEE WAS NOT INTERESTED IN PROSECUTING ITS APPLICATION FOR GRANT OF REGISTRATION U/S.12A OF THE ACT. 3. AGGRIEVED BY THE ORDER OF CIT(E), THE ASSESSEE H AS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS. THE PROVI SIONS OF SECTION 5 & 6 OF THE THE INDIAN TRUSTS ACT, 1882, LAYS DOWN A S FOLLOWS WITH REGARD TO CREATION OF THE TRUST:- SECTION 5: TRUST OF IMMOVABLE PROPERTY. NO TRUST I N RELATION TO IMMOVEABLE PROPERTY IS VALID UNLESS DECLARED BY A N ON- TESTAMENTARY INSTRUMENT IN WRITING SIGNED BY THE AU THOR OF THE TRUST OR THE TRUSTEE AND REGISTERED, OR BY THE WILL OF THE AUTHOR OF THE TRUST OR OF THE TRUSTEE. TRUST OF MOVEABLE PROPERTY. NO TRUST RELATING TO M OVABLE PROPERTY IS VALID UNLESS DECLARED AS AFORESAID, OR UNLESS THE OWNERSHIP OF THE PROPERTY IS TRANSFERRED TO THE TRU STEE. THESE RULES DO NOT APPLY WHERE THEY WOULD OPERATE SO AS T O EFFECTUATE A FRAUD. SECTION 6: CREATION OF TRUST: SUBJECT TO THE PROVI SIONS OF SECTION 5, A TRUST IS CREATED WHEN THE AUTHOR OF TH E TRUST INDICATES WITH REASONABLE CERTAINTY BY ANY WORDS OR ACTS, (A) AN INTENTION ON HIS PART TO CREATE THEREBY A TR UST, (B) THE PURPOSE OF THE TRUST, (C) THE BENEFICIARY, AND (D) THE TRUST, ITA NO.1682/BANG/2016 PAGE 3 OF 4 PROPERTY, AND (UNLESS THE TRUST IS DECLARED BY WILL OR THE AUTHOR OF THE TRUST IS HIMSELF TO BE THE TRUSTEE) TRANSFER S THE TRUST PROPERTY TO THE TRUSTEE. 5. IT IS CLEAR FROM THE AFORESAID STATUTORY PROVIS IONS THAT A TRUST IN RELATION TO IMMOVABLE PROPERTY ALONE REQUIRES TO BE REGISTERED. THE ADMITTED POSITION IN THE PRESENT CASE IS THAT THE D EED OF TRUST DATED 20.11.2014 BY WHICH THE ASSESSEE CAME INTO EXISTENC E, DOES NOT CONTAIN DEDICATION OF IMMOVABLE PROPERTY. THEREFORE, THE R EASON GIVEN BY THE CIT(E) THAT THE DEED OF TRUST IS NOT REGISTERED AND THEREFORE THE APPLICATION FOR GRANT OF REGISTRATION HAS TO BE DISMISSED IS NO T CORRECT. FURTHER IT IS SEEN THAT THE CIT(E) HAS NOT ELABORATED WHAT WAS TH E NON-COMPLIANCE BY THE ASSESSEE. WE ARE OF THE VIEW THAT THE ASSESSEE HAS NOT BEEN AFFORDED PROPER OPPORTUNITY OF BEING HEARD BY THE CIT(E). A CCORDINGLY, WE SET ASIDE THE ORDER OF CIT(E) AND REMAND THE QUESTION OF GRAN T OF REGISTRATION U/S. 12A TO CIT(E) FOR FRESH CONSIDERATION. THE CIT(E) W ILL AFFORD OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND DECIDE ON THE QUEST ION WHETHER THE ASSESSEE SHOULD BE GRANTED REGISTRATION U/S. 12A OF THE ACT AFRESH. 6. THE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 12 TH DAY OF SEPTEMBER, 2018. SD/- SD/- ( G. MANJUNATHA ) ( N.V. VASUDEVAN ) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE, DATED, THE 12 TH SEPTEMBER, 2018. / D ESAI S MURTHY / ITA NO.1682/BANG/2016 PAGE 4 OF 4 COPY TO: 1. APP ELL ANT 2. RESPONDEN T 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY ITAT, BANGALORE.