Sri Vellai Veshti Siddar Swamigal Trust, Karaikudi V. CIT, Madurai

ITA 1834/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64618 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-12-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 10-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: T VASUDEVAN
• Keywords: Charitable institution
• Section: 12AA; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH CHENNAI BEFORE DR. O. K. NARAYANAN, VICE PRESIDENT AND SHRI V. DURGA RAO, JUDICIAL MEMBER ------- ITA NO. 1834/MDS/2012 ASSESSMENT YEAR : - SRI VELLAI VESHTTI SIDDAR SWAMIGAL TRUST, NO. 1797, PONMALAR STREET, VALLUVAR NAGAR, BURMA COLONY, KARAIKUDI-630 002. V. THE COMMISSIONER OF INCOME TAX-I, MADURAI. (PAN : AAKTS4704M) (APPELLANT) (RESPONDENT) APPELLANT BY : SRI T.VASUDEVAN, ADVOCATE RESPONDENT BY : SRI GURU BASHYAM, JCIT DATE OF HEARING : 10-12-2012 DATE OF PRONOUNCEMENT : 10-12-201 2 O R D E R PER V. DURGA RAO, JUDICIAL MEMBER : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF TH E COMMISSIONER OF INCOME TAX-I, MADURAI DATED 17-07-2 012. ITA NO.1834/MDS /2012 : 2 : 2. BRIEF FACTS ARE THAT THE ASSESSEE TRUST FILED AN APPLICATION ON 02-03-2011 SEEKING REGISTRATION UNDER SECTION 12 AA OF THE INCOME TAX ACT, 1961 ('THE ACT' FOR SHORT). THE TR UST WAS CONSTITUTED BY A DEED EXECUTED ON 24-02-2011. THE MAIN OBJECTS OF THE TRUST ARE AS FOLLOWS : A. TO GIVE CHARITY TO THE POOR BOYS AND GIRLS FOR THE PURPOSE OF ALL TYPES OF EDUCATION AND ENCOURAGEMENT OF THEIR KNOWLEDGE. B. TO ESTABLISH AND RUN FOR OLD AGED PERSONS AND TO GIVE FREE FOOD DRESSES SHELTER AND MEDICAL HELP. C. TO ORGANIZE AND CONDUCT FREE MEDICAL CAMPS FREE MEDICAL SERVICES TO THE NEEDY PEOPLE. D. TO ESTABLISH TECHNICAL INSTITUTE AND GET EMPLOYMENT OPPORTUNITIES IN THE RELEVANT TECHNICAL FIELD FOR THESE POOR UNEMPLOYED STUDENTS. E. TO SPREAD KNOWLEDGE EDUCATION CULTURE BY PUBLISHING BOOKS HOLDING LECTURES AND ESTABLISHING ENDORSEMENTS. F. TO CONSTRUCT AND MAINTAIN COMMUNITY HALLS AND BUILDINGS FOR THE PURPOSE OF CONDUCTING LECTURES LIBRARIES, SEMINARS MASS MARRIAGES AND ALL SOCIAL FUNCTIONS AND SUCH OTHER FUNCTIONS FOR EDUCATING THE PUBLIC AND TO CONDUCT LECTURES MUSIC FINE ARTS CONCERTS AND TO CONDUCT YOGA CLASSES. G. TO ESTABLISH AND CONTRIBUTE TO EDUCATIONAL CULTURAL AND SPORTS INSTITUTIONS, COLLEGES, SCHOOLS NURSERIES, LIBRARIES AND READING ROOMS, AND PLACES OF PUBLIC WORSHIP NOTIFIED BY THE GOVERNMENT. ITA NO.1834/MDS /2012 : 3 : H. ANY OTHER OBJECTS WHICH OVER PERMITTED TO BE CARRIED OUT AS CHARITABLE ACCORDING TO THE INCOME TAX ACT. I. THE TRUST WILL CARRY OUT ITS ACTIVITIES IN INDIA. J. THE BENEFITS OF THE TRUST ARE OPEN TO ALL IRRESPECTIVE OF CASTE, CREED RELIGION OF SEX. 3. ON 09-04-2012 THE ASSESSEE TRUST RECEIVED A NOTI CE FROM THE ASSESSING OFFICER CALLING FOR VARIOUS DETAILS. IN RESPONSE TO THAT THE ASSESSEE HAS GIVEN REPLY ON 24-04-2012. T HEREAFTER AGAIN THE ASSESSEE RECEIVED A NOTICE DATED 23-05-20 12 CALLING FOR VARIOUS DETAILS. IN RESPONSE TO THAT THE ASSES SEE HAS SUBMITTED ALL THE DETAILS ON 29-05-2012. THEREAFTE R, THE COMMISSIONER OF INCOME TAX REFUSED TO GRANT REGISTR ATION UNDER SECTION 12AA OF THE ACT ON THE GROUND THAT TH E SOURCE OF CORPUS DONATION IS NOT EXPLAINED AND THAT THE AS SESSEE HAS NOT FURNISHED COMPLETE DETAILS/ADDRESSES OF THE DON ORS FOR VERIFICATION. THE CIT HELD THAT THE ASSESSEE HAS F AILED TO PROVE THE GENUINENESS OF THE TRUST AND THE CHARITAB LE ACTIVITIES BEING CARRIED OUT IN TERMS OF THE TRUST DEED. 4. ON BEING AGGRIEVED, THE ASSESSEE HAS CARRIED THE MATTER BEFORE THE TRIBUNAL. THE LEARNED COUNSEL FOR THE A SSESSEE POINTED OUT THAT THE TRUST WAS CREATED RECENTLY AND IT IS IN THE ITA NO.1834/MDS /2012 : 4 : BEGINNING DAYS. ALL THE DETAILS CALLED BY THE ASSE SSING OFFICER WERE PRODUCED BEFORE HIM. HE FURTHER SUBMITTED THA T THE TRUST WAS CREATED ONLY WITH THE SOLE MOTIVE OF CHAR ITY AND THEREFORE THE CIT WITHOUT EXAMINING THE OBJECTS OF THE TRUST, SIMPLY REJECTED THE REGISTRATION APPLICATION. HE H AS REFERRED TO PAGES 17 TO 28 OF THE PAPER BOOK FILED WITH REFEREN CE TO THE NOTICES AND THE DETAILS FILED BY THE ASSESSEE. 5. ON THE OTHER HAND, THE LEARNED DR SUPPORTED THE ORDER PASSED BY THE LEARNED CIT. 6. WE HAVE HEARD BOTH THE SIDES, PERUSED THE RECORD S AND GONE THROUGH THE ORDER PASSED BY THE LEARNED CIT. THE ASSESSEE IS A PUBLIC CHARITABLE TRUST AND HAS APPLI ED FOR REGISTRATION U/S 12AA OF THE ACT BY FILING FORM NO. 10A BY STATING THE AFOREMENTIONED OBJECTS OF THE TRUST. TH E ASSESSING OFFICER CALLED FOR VARIOUS DETAILS AND ALL THE DETA ILS WERE SUBMITTED. THE REASON GIVEN BY THE LEARNED CIT FOR REFUSING TO GRANT REGISTRATION WAS THAT THE ASSESSEE HAD REC EIVED SOME CORPUS DONATIONS FOR WHICH DETAILS WERE NOT GIVEN. AS POINTED OUT BY THE LEARNED COUNSEL FOR THE ASSESSEE AT PAGE NO. 18 OF THE PAPER BOOK, THE MANAGING TRUSTEE DONATED ` 14,500/- AND PAN WAS ALSO GIVEN. HE HAS ALSO GIVEN THE DETAILS OF CORPUS ITA NO.1834/MDS /2012 : 5 : DONATIONS RECEIVED FROM OTHERS AT PAGE NO.24 OF THE PAPER BOOK. HE HAS FURTHER GIVEN DETAILS OF OTHER DONATI ONS RECEIVED FROM VARIOUS PEOPLE AT PAGE NO.19 OF THE PAPER BOOK . THE LEARNED CIT WITHOUT EXAMINING THE DETAILS FILED BY THE ASSESSEE SIMPLY REJECTED THE APPLICATION FOR REGIST RATION U/S 12AA. THE LEARNED CIT SAYS THAT SINCE THE ASSESSEE HAS FAILED TO GIVE DETAILS, THE TRUST IS NOT GENUINE AND THAT THE ASSESSEE HAS FAILED TO ESTABLISH THE CHARITABLE ACTIVITIES O F THE TRUST. WE FIND THAT WHEN THE ASSESSEE HAS GIVEN DETAILS OF TH E DONATIONS RECEIVED AND THE TRUST IS IN THE BEGINNING DAYS, TH E LEARNED CIT IS NOT JUSTIFIED IN REJECTING THE REGISTRATION UNDER SECTION 12AA OF THE ACT WITHOUT EXAMINING THE DETAILS. 7. IN THIS CONNECTION WE WOULD LIKE TO REFER TO THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF DIT (EXEMPTIONS) V. MEENAKSHI AMMA ENDOWMENT TRUST (201 1) 50 DTR (KAR) 243. IN THIS CASE THE HONBLE KARNATAKA HIGH COURT HAS HELD AS UNDER (VIDE HEAD NOTE) : WHEN THE TRUST WAS JUST FORMED IN JANUARY,2008 WITH CONTRIBUTIONS OF ` 1000/- BY EACH OF THE TRUSTEES , ONE CANNOT EXPECT IT TO CARRY OUT CHARITABLE ACTIVITY IMMEDIATELY AND THE CONCERNED AUTHORITY COULD NOT COME TO THE CONCLUSION THAT THE TRUST WAS NOT INTENDING TO DO ANY CHARITABLE ACTIVITY. ITA NO.1834/MDS /2012 : 6 : 8. IN THE PRESENT CASE THE ASSESSEE TRUST WAS ESTAB LISHED RECENTLY AND WAS IN ITS BEGINNING DAYS. THEREFORE, IT IS PREMATURE TO SAY THAT THE ASSESSEE IS NOT CARRYING ON ANY CHARITABLE ACTIVITY. IN OUR OPINION, THE LEARNED C IT WAS NOT JUSTIFIED IN REFUSING TO GRANT THE REGISTRATION. K EEPING IN VIEW THE ENTIRE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO BY FOLLOWING THE DECISION OF THE HONBLE KARNATAKA HIG H COURT IN THE CASE OF DIT (EXEMPTIONS) V. MEENAKSHI AMMA ENDOWMENT TRUST (SUPRA), WE QUASH THE ORDER PASSED BY THE LEARNED CIT AND DIRECT HIM TO GRANT THE ASSESSEE RE GISTRATION UNDER SECTION 12AA OF THE ACT. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON MONDAY, THE 10 TH OF DECEMBER, 2012, AT CHENNAI. SD/- SD/- (DR. O. K. NARAYANAN) (V.DURGA RAO) VICE PRESIDENT JUDICIAL MEMBER CHENNAI, DATED THE 10 TH DECEMBER, 2012. H. COPY TO: ASSESSEE/AO/CIT(A)/CIT/D.R./GUARD FILE