Seth Jagannath Bajoria Trust, Kolkata V. CIT, (Exemptions), Kolkata, Kolkata

ITA 19/KOL/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9149 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-03-2017
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 05-01-2016
• Court: TRIBUNAL
• Department Lawyers: S JHAJHARIA
• Keywords: Charitable institution
• Section: 12A; 12AA; 12

Judgement Text

1 ITA NO.19/KOL/16 IN THE INCOME TAX APPELLATE TRIBUNAL,ABENCH, KOLKATA BEFORE: SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO. 19/KOL/2016 A.Y 2006-07 SETH JAGANNATH BAJORIA VS. COMMISSIONER OF INCOME CHARITABLE TRUST TAX (EXEMPTIONS), KOLKATA PAN: AAPTS 4975D (APPELLANT) (RESPONDENT) APPEARANCES BY : S/SHRI S.JHAJHARIA, & SUJOY SEN, FCAS, LD.ARS FOR T HE ASSESSEE SHRI AVINASH MISHRA, CIT, LD.SR. DR FOR THE REVENUE DATE OF HEARING : 08-03-2017 DATE OF PRONOUNCEMENT : 17-03-2017 O R D E R SHRI S.S. VISWANETHRA RAVI, JM :- THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DT : 04-11- 2015 PASSED BY THE COMMISSIONER OF INCOME TAX (EXEM PTIONS), KOLKATA REJECTING THE GRANT OF REGISTRATION U/S. 12 AA OF THE ACT. 2. THE ONLY ISSUE IS TO BE DECIDED IN THIS APPEAL AS TO WHETHER THE CIT(E), KOLKATA JUSTIFIED IN REJECTING THE GRANT OF REGISTRATION U/S. 12AA OF THE ACT IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE LD. AR OF THE ASSESSEE SUBMITS THAT THE TRU ST WAS CREATED ON 12-07-1944 BY ITS FOUNDER, LATE NARAYNDA S BAJORIA. THE TRUST IS A PUBLIC CHARITABLE AND ESTABLISHED AN ASRAM IN 2 ITA NO.19/KOL/16 HARDWAR TO PROVIDE FOOD, LODGING, CLOTHES AND OTHER NECESSITIES AND AMENITIES TO NEEDY HINDU SANYASIS AND OTHER NEE DY PERSONS OF THE HINDU RELIGION DEVOTING THEIR LIVES IN DIVINE CONTEMPLATION AND TO PROMOTE AND PROPAGATE HINDI A ND SANSKRIT LEARNING ETC. THE ASSESSEE FILED AN APPLI CATION DT. 14- 07-2015 BEFORE THE CIT(E), KOLKATA SEEKING REGIST RATION U/SEC 12A AS CHARITABLE OR RELIGIOUS INSTITUTION IN FORM NO.10A. THE LD.AR OF THE ASSESSEE FURTHER SUBMITS THAT THE CIT( E) REJECTED THE SAID APPLICATION BY OBSERVING THAT THE ORIGINAL COPY OF TRUST DEED WAS NOT FILED AND THE COPY OF THE TRUST DEED D OES NOT CONTAIN DISSOLUTION CLAUSE. HE FURTHER SUBMITS THAT THE ASSESSEE HAS ONLY IMMOVABLE ASSET I.E. A TEMPLE AT KANKHAL H ARDWAR. THE LOCAL PEOPLE WORSHIP AND CONDUCT BHAJAN IN THE SAID TEMPLE. NO TRUSTEE(S) AND THEIR RELATIVES ARE ENTITLED TO D ERIVE ANY INCOME FROM SUCH TEMPLE. 4. THE LD.AR OF THE ASSESSEE FURTHER SUBMITS IN CAS E OF DISSOLUTION OF TRUST ALL THE MOVABLE AND IMMOVABLE ASSETS WOULD BE HANDED OVER TO ANY OTHER TRUST HAVING SIMI LAR OBJECTS AND IN CASE OF NO SUCH TRUST FOUND THE SAID ASSETS SHALL BE VESTED TO THE RESPECTIVE SATE GOVT. HE RELIED ON TH E ORDER OF THE CO-ORDINATE BENCH OF MUMBAI BENCH IN THE CASE O F TARA EDUCATIONAL AND CHARITABLE TRUST IN ITA NO. 1247/MU M/2013 AND WHILE REFERRING TO PARA 4 OF THE SAID ORDER AR GUED THAT THE SCOPE OF ENQUIRY CONTEMPLATED U/S. 12A OF THE ACT I S LIMITED, WHEREIN THE CIT(E) HAS EITHER TO GRANT OR REFUSE T HE REGISTRATION HAVING SATISFIED WITH THE ACTIVITIES O F THE TRUST OR THE OBJECTS OF THE TRUST ARE NOT CORRECT AND GENUIN E. HE FURTHER SUBMITS THAT THE CIT(E) GONE BEYOND THE SCOPE OF EN QUIRY AS ENVISAGED U/S. 12AA, REJECTED THE APPLICATION FOR G RANT OF 3 ITA NO.19/KOL/16 REGISTRATION U/S. 12AA OF THE ACT AND WITHOUT MAKIN G ANY ADVERSE REFERENCE TO ITS OBJECTIVES AS WELL AS GENU INENESS OF ITS ACTIVITIES. 5. ON THE OTHER HAND, THE LD. DR HAS RELIED ON THE ORDER OF THE CIT(E) IN REJECTING THE SAME. 6. HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ASSESSEE HAS FILED AN A PPLICATION DT. 14-07-2015 BEFORE THE CIT-E FOR OBTAINING GRANT OF REGISTRATION. THE ASSESSEE TRUST FILED ALL THE DETAILS AS REQUIRE D BY THE CIT(E) VIDE LETTER VIDE A LETTER DATED 9-10-2015, P LACED AT PAGE 21 OF THE ASSESSEES PAPER BOOK. FROM THE SAID LETT ER DT. 09-10- 2015, IT IS OBSERVED THAT THE ASSESSEE TRUST HAS ON LY IMMOVABLE ASSET I.E. A TEMPLE AT KANKHAL (HARIDWAR) AND THE T RUSTEES OF THE TRUST ARE NOT DERIVING ANY PROFIT FROM THE SAID TEMPLE AND THE LOCAL PEOPLE ARE MANAGING THE AFFAIRS OF THE SA ID TEMPLE. IT IS ALSO OBSERVED THAT ALL THE ASSETS OF THE TRUST W ILL BE HANDED OVER TO ANY TRUST HAVING SIMILAR OBJECTS IN CASE OF DISSOLUTION OR IN THE CASE OF ANY TRUST NOT FOUND, THE PROPERTY SHALL BE VESTED TO RESPECTIVE GOVT. RELEVANT DETAILS AS ALRE ADY FILED BY THE ASSESSEE VIDE LETTER DT. 9-10-2015 BEFORE THE C IT-A FOR OBTAINING REGISTRATION U/S. 12A OF THE ACT ARE REPR ODUCED HEREIN BELOW FOR BETTER UNDERSTANDING:- 1. COPY OF PAN CARD OF TRUST AND TRUSTEES ARE ENCLO SED. ANNEX. I 2. TRUST DEED WITH A COPY THEREOF HAS BEEN SUBMITTE D ALONG WITH THE APPLICATION. 3. GEOGRAPHICAL AREA OF OPERATION OF THE TRUST IS I N INDIA. 4. PAN CARD OF THE TRUSTEES ARE ENCLOSED BEING ANNE X AS ABOVE. UNDER TAKING FROM THE TRUSTEES WITH OTHER DETAIL IS ENCLOSED. AN NEX. 2 5. DETAIL OF RELATIONSHIP OF ALL TRUSTEES WITH THE SETTLER. ANNEX. 3 6. THE TRUST IS A PUBLIC CHARITABLE TRUST. THE IMMO VABLE A SET IS A TEMPLE AT KANKHAL (HARIDWAR) FOR THE GENERAL PUBLIC. LOCAL PE OPLE WORSHIP IN THE TEMPLE AND IN THE EVENING LOCAL PEOPLE GATHERS AT T HE TEMPLE AND CHANT 'BHAJAN' FOR HOURS TOGHTER. NO TRUSTEE AND THEIR RE LATIVE ARE ENTITLED FOR ANY PROFIT IN PROFITS AND ANY ASSET I PROPERTY IN THE E VENT OF DISSOLUTION OF THE TRUST. IN CASE OF DISSOLUTION OF THE TRUST, LOCAL P EOPLE SHALL NOT SPARE THE TEMPLE BUT THEY SHALL MAINTAIN THE SAME FOR WORSHIP . HOWEVER, THE TRUST HAS 4 ITA NO.19/KOL/16 PASSED A RESOLUTION STATING THAT, IN THE EVENT OF D ISSOLUTION OF THE TRUST, ALL AVAILABLE FUNDS, INCLUDING ALL MOVABLE AND IMMOVABL E ASSETS OF THE TRUST TO BE HANDED OVER TO ANY OTHER TRUST HAVING SIMILAR OB JECTS AND OPERATING WITHIN THE UNION OF INDIA. IF NO SUCH TRUST IS FOUN D, THE PROPERTY SHALL BE VESTED TO THE GOVERNMENT. ANNEX 4. 7 A COPY OF LETTER FROM THE TRUSTEE, SRI S.S.KHEMKA IS ENCLOSED CONFIRMING OF PROVIDING A SPACE IN HIS OFFICE TO THE TRUST TO CAR RY ON ITS ACTIVITIES. ANNEX. 5 8 COMPUTERIZED BOOKS OF ACCOUNTS ARE MAINTAINED AND ARE PRODUCED. 9 THE TRUST IS NOT DOING ANY BUSINESS ACTIVITIES 10 TRUST HAS ONLY ONE EMPLOYEE CALLED 'PUJARL'. HE MAINTAINS THE TEMPLE. SALARY PAID TO PUJARI IS VERIFIABLE FROM THE CASH B OOK PRODUCED. 11 A COPY OF STATEMENT OF CURRENT ACCOUNT NO. 00060 5027783 WITH ICICI BANK, R.N. MUKHERJEE ROAD, KOLKATA IS ENCLOSED. ANN EX. 6 12 DETAIL OF DONATION ALONG WITH DONOR'S CONFIRMATI ON LETTERS ARE ENCLOSED ANNEX.? 13 THE TRUST AS PER ITS OBJECT HAS MANY CHARITABLE ACTIVITIES BUT FOR LACK OF FUND IT COULD NOT BE POSSIBLE TO UNDER-TAKE CHARITA BLE ACTIVITIES IN PRESENT PERIOD. TRUST MAINTAINS A TEMPLE WHERE PEOPLE OF TH E AREA PERFORM PUJA. 14 THE SETTLER BY A SALE DEED DATED 24TH APRIL 1947 PURCHASED A PIECE OF LAND AT KANKHAL (HARIDWAR) AND ERECTED THE TEMPLE. THE TRUST MAINTAINS THE SAID TEMPLE. BESIDES THAT THE TRUST HAS NO OTHER AS SETS. PHOTO OF THE TEMPLE IS ENCLOSED ANNEX.8 15 AS SUBMITTED IN PARA 13 ABOVE THE TEMPLE MAINTAI NED BY THE TRUST IS FOR THE LOCAL PEOPLE AT LARGE FOR WORSHIP AND FOR MEDIT ATION IN THE BASEMENT OF THE TEMPLE. 16 THE TRUST, AT PRESENT, FOR LACK OF FUND, CANNOT CARRY OTHER CHARITABLE ACTIVITY AS DESIRED BY THE FOUNDER IN THE TRUST DEE D. 17 THE TRUST DID NOT RECEIVE ANY FOREIGN CONTRIBUTI ON. 18 THE TRUST WAS ALLOTTED PA 11-101-AZ0718/CALLW-20 (2). XEROX OF THE PAN CARD IS ENCLOSED. AS PER OLD RECORDS AVAILABLE, LAS T RETURN OF INCOME WAS FILED FOR THE ASSESSMENT YEAR 1992-93 AND ASSESSMENT WAS COMPLETED LVS.143(3)/13(L) OF THE IT ACT BY AN ORDER DATED 30 -09-1994 AND IT WAS SUBSEQUENTLY RECTIFIED U/S.154 BY ORDER DATED 11-01 -1996 AND THE TAX DEMAND WAS VACATED. COPY OF BOTH THE ORDERS ARE ENC LOSED AND MARKED AS ANNEX. 9. AT PRESENT, THE INCOME OF THE TRUST IS FA R BELOW THE MAXIMUM AMOUNT CHARGEABLE TO INCOME TAX. AS SUCH, TRUST IS NOT SUBMITTING RETURN OF INCOME THE TEMPLE IS MAINTAINED BY MEAGER OFFERINGS OF THE DEVOTEES / PILGRIMS. 19. THE TRUST HAS NO CORPUS FUND. THE SMALL DONATIO N AMOUNT RECEIVED HAS BEEN DEPOSITED IN THE BANK ACCOUNT. A COPY OF BANK STATEMENT IS ENCLOSED BEING ANNEX. 6 HEREIN BEFORE. 20. COMPUTERIZED BOOKS OF ACCOUNTS ARE PRODUCED FOR THE KIND PERUSAL OF YOUR HONOUR. 7. COMING TO THE ORDER DT. 18-07-2014 OF THE ITAT, MUMBAI BENCH, MUMBAI IN THE CASE OF TARA EDUCATIONAL & CHA RITABLE TRUST SUPRA AS RELIED ON BY THE LD.AR OF THE ASSESS EE BEFORE US WITH REGARD TO SCOPE OF THE CIT(E) U/S. 12A OF THE ACT, IT IS NOTICED THAT THE CO-ORDINATE BENCH, ITAT, MUMBAI DE ALT THE SIMILAR ISSUE AND OPINED THAT THE POWER TO EXERCISE IN GRANTING REGISTRATION FOR A RELIGIOUS OR CHARITABLE INSTITUT ION THE COMMISSIONER HAS TO SATISFY HIMSELF ABOUT THE OBJEC TS OF THE TRUST AND GENUINENESS OF ITS ACTIVITIES AND WITHOUT THERE BEING FINDING ADVERSE TO THAT EFFECT THE CIT(E) CANNOT RE FUSE TO GRANT 5 ITA NO.19/KOL/16 REGISTRATION U/S. 12A OF THE ACT. RELEVANT FINDING AT PARA 4 OF THAT ORDER SUPRA TO THAT EFFECT IS REPRODUCED HEREI N BELOW FOR BETTER UNDERSTANDING:- 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERVED THAT T HE APPLICATION FILED BY THE ASSESSEE U/S 12 A OF THE ACT HAS BEEN REJECTED BY THE LD. DIT (EXEMPTIONS) MAIN LY ON THE GROUND THAT THE RELEVANT TRUST DEED DOES NOT CONTAIN THE S O-CALLED 'DISSOLUTION CLAUSE'. AS PER THE PROVISIONS OF SECTION 11 & 12 OF THE ACT, INCOME DERIVED FROM PROPERTY HELD FOR CHARITABLE OR RELIGIOUS PURPOSES AND INCOME OF TRUS TS OR INSTITUTIONS FROM CONTRIBUTIONS ARE EXEMPT FROM TAX PROVIDED SUCH TRUSTS OR INSTITU TIONS ARE REGISTERED U/S 12 A OF THE ACT . THE PROCEDURE FOR REGISTRATION U/S 12A IS PRESCRI BED IN SECTION 12AA OF THE ACT WHICH PROVIDES THAT THE COMMISSIONER, ON THE RECEIP T OF AN APPLICATION FOR REGISTRATION OF A TRUST OR INSTITUTION MADE U/S 12A, SHALL CALL FOR SUCH INFORMATION FROM THE TRUST/INSTITUTION AS HE THINKS NECESSARY IN ORDER T O SATISFY HIMSELF ABOUT THE GENUINENESS OF ACTIVITIES OF THE TRUST/INSTITUTION AND MAY ALSO MAKE SUCH INQUIRIES AS DEEMED NECESSARY ON THIS BEHALF. IT FURTHER PROVIDE S THAT AFTER SATISFYING HIMSELF ABOUT THE OBJECTS OF THE TRUST/INSTITUTION AND THE GENUIN ENESS OF ITS ACTIVITIES, THE COMMISSIONER SHALL PASS AN ORDER IN WRITING REGISTE RING THE TRUST/INSTITUTION U/S 12A AND IF HE IS NOT SO SATISFIED, HE SHALL PASS AN ORD ER IN WRITING REFUSING TO REGISTER THE TRUST/INSTITUTION. THE SCOPE OF ENQUIRY CONTEMPLATE D U/S 12AA OF THE ACT THUS IS LIMITED TO THE EXTENT OF COMMISSIONER GETTING HIMSELF SATIS FIED ABOUT OBJECT OF THE TRUST AND THE GENUINENESS OF ITS ACTIVITIES SO AS TO GRANT OR REFUSE THE REGISTRATION U/S 12 A OF THE ACT . A PERUSAL OF THE IMPUGNED ORDER OF THE LD. DIT (E XEMPTIONS), HOWEVER, SHOWS THAT HE HAS NOT RECORDED ANY ADVERSE COMMENT OR DIS-SATI SFACTION ABOUT THE OBJECT OF THE 4 ITA 1247/M/13 TRUST OR GENUINENESS OF THE TRUST ACT IVITIES. HE HAS REFUSED TO GRANT THE REGISTRATION U/S 12 A OF THE ACT ON THE GROUND THAT ITS TRUST DEED DOES NOT CONTAIN 'DISSOLUTION CLAUSE'. IN OUR OPINION, THE LD. DIT ( EXEMPTIONS) THUS HAS CLEARLY GONE BEYOND THE SCOPE OF ENQUIRY CONTEMPLATED U/S 12 A OF THE ACT AND HAS REFUSED TO GRANT THE REGISTRATION U/S 12 A OF THE ACT TO THE ASSESSEE TRUST ON A TOTALLY IRRELEVANT GROU ND WITHOUT POINTING OUT AS TO HOW HE WAS NOT SATISFIED EITHER ABOUT THE OBJECT OF THE TRUST OR THE GENUINENESS OF ITS ACTIVITIES. WE THEREFORE SET ASIDE THE IMPUGNED ORDER OF THE LD. DIT (EXEMPTIONS) AND DIRECT THAT THE REGISTRATI ON U/S 12 A OF THE ACT AS APPLIED BY THE ASSESSEE TRUST BE GRANTED. 8. IN THE PRESENT CASE IT IS OBSERVED THAT THE CIT( E) DID NOT MAKE ANY ADVERSE REFERENCE TO THE OBJECTS OF THE TR UST AND ITS GENUINENESS OF THE ACTIVITIES. THE CIT(E) REFUSED T O GRANT REGISTRATION AS ORIGINAL TRUST DEED WAS NOT PRODUCE D BEFORE HIM AND DISSOLUTION CLAUSE WAS NOT FOUND IN THE COPY OF SAID DEED. IN OUR OPINION THAT THE DECISION OF THE ITAT MUMBAI IN THE CASE OF SUPRA AS RELIED ON BY THE LD.AR OF THE ASSESSEE IS APPLICABLE TO THE PRESENT FACTS OF THE CASE IN HAND. THEREFORE , RELYING ON THE SAME IN THE CASE OF SUPRA, WE SET ASIDE THE IMP UGNED ORDER OF THE CIT(E) IN REJECTING THE GRANT OF REGISTRATIO N. ACCORDINGLY, WE DIRECT THE CIT(E) TO GRANT REGISTRATION TAKING I NTO 6 ITA NO.19/KOL/16 CONSIDERATION THE SUBMISSIONS AS MADE BEFORE HIM VI DE LETTER DT. 09-10-2015. 9 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN OPEN COURT ON 17/03/2 017 SD/- SD/- M. BALAGANESH S.S. VIS WANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 17-0 3-2017 *PP/SPS: COPY OF THE ORDER FORWARDED TO: 1 . THE APPELLANT/ASSESSEE: M/S. SETH JAGANNATH BAJORI A CHARITABLE TRUST C/O SRI S.S KHEMKA, 4 TH FLOOR, 15 CHITTARANJAN AVENUE, KOLKATA-700 007. 2 THE RESPONDENT/DEPARTMENT: THE COMMISSIONER OF INC OME TAX (EXEMPTIONS), 10 B MIDDLETON ROW, 6 TH FLOOR, KOLKATA-700 071. 3 4. THE CIT(A) THE CIT 5 . DR, KOLKATA BENCH 6 . GUARD FILE . BY ORDER, ASSTT. REGISTRAR