Sri Raghavendra Granthalaya Seva & Educational Charitable Trust, CHENNAI V. DIT, CHENNAI

ITA 1728/CHNY/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0986 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 23-03-2011
• Assessment Year: misc
• Appeal Filed On: 14-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K MEENATCHI SUNDARAM
• Keywords: Charitable institution
• Section: 12AA; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH A CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AN D SHRI GEORGE MATHAN, JUDICIAL MEMBER .. I.T.A. NO. 1728/MDS/2010 ASSESSMENT YEAR : - SRI RAGHAVENDRA GRANTHALAYA SEVA & EDUCATIONAL CHARITABLE TRUST, 16/116, THULASINGA PERUMAL KOIL STREET, TRIPLICANE, CHENNAI-600 005. V. THE DIRECTOR OF INCOME-TAX (EXEMPTIONS), CHENNAI. (PAN: AAITS7823B) ) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K. MEENATCHI SUNDARAM RESPONDENT BY : SHRI SHAJI P. JACOB O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LEARNED DIRECTOR OF INCOME TAX (EXEMPTIONS), CHENNAI IN DIT( E) NO.2(799)/09-10 DATED 31-05-2010. 2. SHRI K. MEENATCHI SUNDARAM, CA REPRESENTED ON BE HALF OF THE ASSESSEE AND SHRI SHAJI P. JACOB, LEARNED SR. DR REPRESENTED ON BEHALF OF THE REVENUE. 3. IT WAS SUBMITTED BY THE LEARNED AUTHORISED REPRE SENTATIVE THAT THE ASSESSEE IS A TRUST WHICH WAS CONSTITUTED BY A DEED OF TRUST DATED 27-11-2008. IT WAS THE SUBMISSION THAT THE ASSESSEE HAD FILED A N APPLICATION FOR REGISTRATION I.T.A. NO.1728/MDS/2010 2 UNDER SECTION 12AA OF THE INCOME TAX ACT, 1961 ON 2 6-11-2009. THE APPLICATION OF THE ASSESSEE WAS REJECTED BY THE LEARNED DIT ON THE GROUND THAT THE ORIGINAL TRUST DEED HAD BEEN AMENDED BY AN UNREGISTERED CODI CIL DATED 17.05.2010. IT WAS ALSO THE SUBMISSION THAT THE LEARNED DIT WAS OF THE VIEW THAT THE PROPAGATION OF THE WRITINGS OF SRI RAGHAVENDRA SWAM I AND ALSO OF HIS PREDECESSORS AND SUCCESSORS CANNOT BE CONSIDERED AS A CHARITABLE ACTIVITY. IT WAS THE SUBMISSION THAT THE ASSESSEE HAD FILED APPL ICATION FOR REGISTRATION U/S 12AA AS A RELIGIOUS TRUST AND NOT AS PURELY A CHARI TABLE TRUST. IT WAS THE SUBMISSION THAT WHEN THE ASSESSEE FILED FOR REGISTR ATION OF THE TRUST DEED ON 26.11.2009, NO CODICIL HAD BEEN MADE. IT WAS THE S UBMISSION THAT THE CODICIL WAS DATED 17.05.2010 AND EVEN IF THE CODICIL WAS TO BE CONSIDERED, IT COULD BE CONSIDERED ONLY AFTER THE REGISTRATION OF THE TRUST UNDER SECTION 12AA AND THAT TOO ONLY AFTER OBTAINING THE APPROVAL OF THE LEARNE D DIT. IT WAS THE SUBMISSION THAT HE HAD NO OBJECTION IF THE ISSUES IN THE APPEA L WERE RESTORED TO THE FILE OF THE DIT FOR RECONSIDERATION IN REGARD TO THE REGIST RATION OF THE ASSESSEE TRUST AS A PUBLIC RELIGIOUS TRUST. 4. IN REPLY, THE LEARNED DR VEHEMENTLY SUPPORTED TH E ORDER OF THE LEARNED DIT. IT WAS THE SUBMISSION THAT IF THE CODICIL WAS TO BE CONSIDERED, THEN REGISTRATION OF THE TRUST WOULD HAVE TO BE TREATED AS A FRESH APPLICATION AS THE CODICIL CANNOT OPERATE RETROSPECTIVELY AND THE MODI FICATIONS AS PER THE CODICIL WOULD OPERATE ONLY PROSPECTIVELY FROM THE DATE OF T HE RECTIFICATION AS APPROVED I.T.A. NO.1728/MDS/2010 3 BY THE TRUSTEES AND AS APPROVED BY FILING A SUIT IN THE CIVIL COURT. IT WAS THE SUBMISSION THAT THE FACT THAT THE CODICIL HAS NOT B EEN REGISTERED NOR APPROVED BY FILING THE NECESSARY SUIT IN THE CIVIL COURT, THE O RDER OF THE LEARNED DIT IS LIABLE TO BE UPHELD IN VIEW OF THE DECISIONS OF THE HON'BL E DELHI HIGH COURT (FULL BENCH) IN THE CASE OF BHRIGURAJ CHARITY TRUST V. CIT REPOR TED IN 228 ITR 50 AS ALSO OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF SA KTHI CHARITIES V. CIT, REPORTED IN 149 ITR 624. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AT TH E OUTSET WHAT IS NOTICED IS THAT THE ASSESSEE HAS FILED APPLICATION FOR REGI STRATION UNDER SECTION 12AA ON 26.11.2009. THE CODICIL TO THE TRUST DEED HAS BEEN MADE ON 17-05-2010. THE CODICIL IS ON THE BASIS OF THE RESOLUTIONS PASSED I N THE MEETING OF THE TRUSTEES HELD ON 17.05.2010. THIS CODICIL IS NOT PART OF TH E PRIMARY DOCUMENT ON THE BASIS OF WHICH THE REGISTRATION IS BEING PRAYED FOR . THE REGISTRATION OF THE TRUST IS TO BE DECIDED ON THE BASIS OF THE TRUST DEED DATED 27-11-2008. THIS IS BECAUSE THE CODICIL TO THE TRUST DEED HAS BEEN MADE ON A SU BSEQUENT DATE TO THE APPLICATION FOR REGISTRATION AND THE CODICIL IS NOT A REGISTERED DOCUMENT. THE CODICIL IS ALSO NOT APPROVED BY THE CIVIL COURT. F URTHER IT IS NOTICED THAT THE ASSESSEE AT THE OUTSET MADE A PRAYER THAT THE ASSES SEE MAY BE REGISTERED AS A PUBLIC RELIGIOUS TRUST. IT IS NOTICED THAT THE LEA RNED DIT HAS NOT CONSIDERED THIS ASPECT OF THE ASSESSEES SUBMISSIONS. IN THE CIRCU MSTANCES, THE ISSUE OF REGISTRATION OF THE ASSESSEE TRUST AS A PUBLIC CHAR ITABLE TRUST IS RESTORED TO THE FILE I.T.A. NO.1728/MDS/2010 4 OF THE LEARNED DIT FOR RE-ADJUDICATION. IT MAY ALS O BE MENTIONED HERE THAT IF THE ASSESSEE DESIRES THAT THE CODICIL DATED 17-05-2010 TO THE TRUST DEED IS ALSO TO BE CONSIDERED, THEN OBVIOUSLY A FRESH APPLICATION FOR REGISTRATION WOULD HAVE TO BE MADE AFTER THE CODICIL IS APPROVED AND INCORPORATED AS PER THE PROVISIONS OF THE INDIAN TRUST ACT. IN THE CIRCUMSTANCES, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 6. THE ORDER WAS PRONOUNCED IN THE COURT ON 23/03/2 011. SD/- SD/- (AABRAHAM P. GEORGE) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 23 RD MARCH, 2011. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE