Raj Karan Matadan Charitable Trust, V. Commissioner of Income Tax (Exemption), Lucknow

ITA 190/LKW/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0550 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 7 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 12-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P K KAPOOR
• Keywords: Charitable institution
• Section: 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B , LUCKNOW BEFORE SHRI. T.S. KAPOOR, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER ITA NO. 190/LKW/2016 ASSESSMENT YEAR: N.A. RAJ KARAN MATADAN CHARITABLE TRUST DURGA GANJ R OAD GYANPUR BHADOHI V. THE CIT (EXEMPTIONS) LUCKNOW T AN /PAN : AACTR5887L (APP ELL ANT) (RESPONDENT) APPELLANT BY: SHRI P. K. KAPOOR, C.A. RESPONDENT BY: SHRI MANOJ KUMAR GUPTA, CIT (DR) DATE OF HEARING: 06 12 201 7 DATE OF PRONOUNCEMENT: 07 12 201 7 O R D E R PER P ARTHA SARATHI CHAUDHURY, J.M : THIS APPEAL PREFERRED BY THE ASSESSEE EMANATES FROM THE ORDER OF THE LD. COMMISSIONER OF INCOME - TAX (EXEMPTIONS) DATED 4/2/2016, PASSED UNDER SECTION 12AA(1)(B)(II) OF THE ACT. 2 . THE CRUX OF THE GRIEVANCE OF THE ASSESSEE IS REJECTION OF APPLICATION FOR GRANTING REGISTRATION UNDER SECTION 12AA OF THE ACT. THE BRIEF FACTS , AS APPEARING IN THE ORDER OF THE LD. COMMISSIONER OF INCOME - TAX (EXEMPTIONS) , ARE THAT THE ASSESSEE - TRUST COMPRISES OF TWO BROTHERS AND THEIR M OTHER BEING THE SETTLER OF THE TRUST. THE LD. COMMISSIONER OF INCOME - TAX (EXEMPTIONS) OBSERVES THAT NO CHARITABLE ACTIVITY HAS TAKEN PLACE TILL DATE AND NO EVIDENCE WAS PRODUCED BY THE [ ITA NO.190/LKW/2016 ] 2 ASSESSEE. THE ASSESSEE - SOCIETY/TRUST COULD NOT PRODUCE THE BOOKS, BAN K STATEMENT AND VOUCHERS IN RESPECT OF EXPENSES CLAIMED BY THE ASSESSEE FOR VERIFICATION OF ACTIVITIES OF THE TRUST . THE LD. COMMISSIONER OF INCOME - TAX (EXEMPTIONS) REJECTED THE APPLICATION FOR GRANT OF REGISTRATION UNDER SECTION 12AA ON THE BASIC GROUND THAT AS PER MATERIALS AVAILABLE ON RECORD, THE ASSESSEE - TRUST WAS NOT CARRYING ON ANY CHARITABLE ACTIVITY. 3 . AT THE TIME OF HEARING, THE LD. A.R. OF THE ASSESSEE SUBMITTED THAT VARIOUS QUERIES THROUGH DETAILED QUESTIONNAIRE W ERE ASKED BY THE OFFICE OF THE LD . COMMISSIONER OF INCOME - TAX (EXEMPTIONS), TO WHICH THE ASSESSEE HAS ALSO FILED REPLY AND ALL THESE DOCUMENTS FIND PLACE IN THE PAPER BOOK. THE LD. A.R. OF THE ASSESSEE VEHEMENTLY RELIED ON VARIOUS JUDICIAL PRONOUNCEMENTS, ESPECIALLY THE DECISION OF HON'B LE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. RED ROSE SCHOOL [2007] 212 CTR 0394 (ALLD) AND THE DECISION OF HON'BLE KARNATAKA HIGH COURT IN THE CASE OF DIRECTOR OF INCOME TAX (EXEMPTIONS) VS. MEENAKSHI AMMA E NDOWMENT TRUST [2013] 354 ITR 0219 (KARNATAKA) . 4 . THE LD. D.R., ON THE OTHER HAND, RELIED ON THE ORDER OF THE LD. COMMISSIONER OF INCOME - TAX (EXEMPTIONS). 5 . WE HAVE PERUSED THE CASE RECORDS, HEARD THE RIVAL CONTENTIONS AND WE FIND THAT IN THE DETAILED PAPER BOOK FILED BY THE ASSESSEE, THERE IS A DETAILED QUESTIONNAIRE RAISING VARIOUS QUERIES BY THE OFFICE OF THE LD. COMMISSIONER OF INCOME - TAX (EXEMPTIONS) AND TO WHICH ASSESSEE HAS GIVEN ANSWERS. THE ASSESSEE THEREIN HAS CATEGORICALLY STATED THAT THE TRUST DOES NOT OWE ANY IMMOVEABLE ASSET. S INCE THE TRUS T WAS FORMED ON 21/4/ 2015, THE FIRST ACCOUNTING YEAR HAS NOT YET ENDED. THE STATEMENT OF AFFAIRS AS ON DATE WAS ENCLOSED AND [ ITA NO.190/LKW/2016 ] 3 NO FUND HAS BEEN SET APART SINCE FORMATION OF THE TRUST ON 21/4/2015. THE ASSESSEE HAS ALSO GIVEN THE NAME OF THE TRUST WITH ADDR ESS, PAN, MOBILE NUMBER AND THE ORIGINAL DOCUMENTS OF TRUST DEED REGISTERED WITH THE SUB - REGISTRAR, GYANPUR BHADOHI WAS ALSO PROVIDED BEFORE THE DEPART MENT. NOW IT IS NOT DISPUTED THAT IT IS A NEW TRUST AND THE ASSESSEE HAD APPLIED FOR ITS REGISTRATION UN DER SECTION 12AA OF THE ACT. IT IS ALSO NOT A CASE WHERE REGISTRATION IS SOUGHT FOR AFTER A LONG PERIOD OF TIME AFTER THE TRUST WAS FORMED. WE TAKE GUIDANCE FROM THE JUDICIAL PRINCIPLES AS ENUMERATED IN THE DECISION S OF HON'BLE KARNATAKA HIGH COURT IN TH E CASE OF DIRECTOR OF INCOME TAX (EXEMPTIONS) VS. MEENAKSHI AMMA ENDOWMENT TRUST (SUPRA) AND HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. RED ROSE SCHOOL (SUPRA) WHEREIN IT HAS BEEN HELD BY THE HON'BLE COURTS THAT THE LD. COMMISSIONER OF INCOME - TAX WHILE CONSIDERING THE APPLICATION FOR REGISTRATION UNDER SECTION 12AA OF THE ACT WILL ESSENTIALLY LOOK INTO THE GENUINENESS OF THE ACTIVITIES OF THE TRUST OR THE INSTITUTION AND MAKE ENQUIRIES IN THIS REGARD AS NECESSARY, BUT AT THAT TIME THE SCOPE OF 12A A DOES NOT SEEK THAT THE LD. COMMISSIONER OF INCOME - TAX WILL ALSO SEE WHETHER THE INCOME DERIVED BY THE TRUST IS SPENT FOR CHARITABLE PURPOSES OR WHETHER THE TRUST IS EARNING PROFIT OR NOT. SO FAR AS T HE CASE OF THE PRESENT ASSESSEE IS CONCERNED, IT WAS A NEW TRUST AND ALL THE DETAILS AS SOUGHT BY THE DEPARTMENT WERE DULY SUBMITTED AND EVEN TRUST DEED WAS FILED WHEREIN THE OBJECTS OF THE TRUST W ERE CLEARLY MENTIONED. WHEN THESE CRITERIA ARE COMPLIED WITH, THEN REGISTRATION UNDER SECTION 12AA OUGHT TO HAVE BEEN GRANTED TO THE ASSESSEE. WE , TAKING GUIDANCE FROM THE AFORESAID JUDICIAL PRINCIPLES, ARE OF THE CONSIDERED VIEW THAT IN THE INSTANT CASE REGISTRATION UNDER SECTION 12AA OF THE ACT SHOULD BE GRANTED TO THE ASSESSEE ONCE AS PER OBJECT CLAUSE THE GENUI NENESS OF [ ITA NO.190/LKW/2016 ] 4 THE ACTIVITIES OF THE TRUST IS ESTABLISHED. THIS FACT IS NOT DISPUTED BY THE LD. D.R. WE, THEREFORE, FOR THE REASONS STATED HEREINABOVE, DIRECT THE LD. COMMISSIONER OF INCOME - TAX (EXEMPTIONS) TO GRANT REGISTRATION TO THE ASSESSEE TRUST UNDER SE CTION 12AA OF THE ACT. 6 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 7/12/ 201 7 . SD/ - SD/ - [ T.S. KAPOOR ] [PARTHA SARATHI CHAUDHURY ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: DECEMBER , 2017 JJ: 0612 COP Y FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR