Karuvoorar Trust, Thiruvidaimaruthur V. CIT, Trichy

ITA 1953/CHNY/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0975 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-01-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 05-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAJI P JACOB
• Assessee Lawyers: S SRIDHAR
• Keywords: Charitable institution
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH CHENN AI BEFORE SHRI ABRAHAM P GEORGE, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER .. ITA NO.1953/MDS./2012 KARUVOORAR TRUST 1/24A SOUTH MAIN STREET, THIRULOKI VILLAGE, THIRUVINDAIMARUTHUR TALUK 609 804. VS. CIT-I, TIRUCHIRAPPALLI. PAN AAATK 9007 B (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.SRIDHAR, ADVOCATE RESPONDENT BY : SHRI SAJI P JACOB ADDL. CIT DR DATE OF HEARING : 28 .01.13 DATE OF PRONOUNCEMENT : 28 . 01.13 O R D E R PER ABARAHAM P. GEORGE, ACCOUNTANT MEMBER : IN THIS APPEAL FILED BY THE ASSESSEE DIRECTED AG AINST THE ORDER DATED 16.08.2012 OF CIT-II, TIRUCHIRAPALLI, I TS GRIEVANCE IS THAT THE CIT DENIED THE REGISTRATION SOUGHT UNDER S ECTION 12AA OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). ITA. 1953/MDS/2012 2 2. FACTS APROPOS ARE THAT ASSESSEE FILED AN APPLIC ATION IN FORM NO.10A ALONG WITH A TRUST DEED DATED 20.01.201 2 FOR REGISTRATION UNDER SECTION 12AA OF THE ACT. SAID AP PLICATION WAS FILED ON 13.02.2012. ASSESSEE WAS ASKED TO PRODUCE DETAILS BY THE CIT, WHICH WAS DULY COMPLIED WITH. FROM THE ST ATEMENT OF ACCOUNTS FILED FOR THE PERIOD FROM 20.01.12 TO 31.0 3.12, CIT CAME TO A CONCLUSION THAT ASSESSEE WAS UNABLE TO ESTABLI SH GENUINENESS OF THE TRUST AND ITS ACTIVITIES. AS PE R THE CIT, ASSESSING OFFICER THOUGH HE ACCEPTED THE EXISTENCE OF THE TRUST, HAD ALSO NOTED THAT NO WORTHWHILE ACTIVITY WAS CARR IED OUT BY IT. IN THIS VIEW OF THE MATTER, HE DENIED THE REGISTRATION SOUGHT BY THE ASSESSEE. 3. NOW BEFORE US, LD. A.R STRONGLY ASSAILING THE O RDER OF CIT SUBMITTED THAT CIT REJECTED ITS APPLICATION BASED O N ASSUMPTION AND SURMISES. ACCORDING TO HIM, GENUINENESS OF THE TRUST WAS NOT DOUBTED BY THE CIT, BUT HE HAD SIMPLY HELD THAT THE ASSESSEE WAS NOT DOING ANY WORTHWHILE ACTIVITIES. PER CONTR A, LD. D.R. SUPPORTED THE ORDER OF THE CIT. ACCORDING TO HIM, ASSESSEE WAS UNABLE TO SHOW ANY CHARITABLE ACTIVITIES TO HAVE BE EN CARRIED ON BY IT AND BY VIRTUE OF THE DECISION OF HONBLE KERA LA HIGH COURT IN ITA. 1953/MDS/2012 3 THE CASE OF SELF-EMPLOYERS SERVICE SOCIETY VS. CIT 247ITR 80, REGISTRATION WAS RIGHTLY DENIED BY THE CIT. 4. AD LIBITUM REPLY OF THE A.R. WAS THAT THE ASSES SEES CASE WAS SUPPORTED BY THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF DIT(E) V. MEENAKSHI AMMA ENDOWMENT TRUS T (2011) 50 DTR (KAR) 243. 5. WE HAVE PERUSED THE ORDER OF CIT AND HEARD THE RIVAL CONTENTIONS. A LOOK AT THE ORDER OF THE CIT CLEARL Y SHOW THAT ASSESSING OFFICER HAD ACCEPTED THE EXISTENCE OF TRU ST. STATEMENT OF ACCOUNTS VERIFIED BY THE CIT WAS FOR A PERIOD OF JUST MORE THAN 2 MONTHS VIZ. 20.01.12 TO 31.03.12. IN O UR OPINION, IT MAY NOT BE POSSIBLE FOR A CHARITABLE TRUST TO SHOW SIGNIFICANT CHARITABLE ACTIVITY IN SUCH A PERIOD OF TIME. IT I S ADMITTED BY THE CIT THAT ASSESSEE-TRUST WAS CREATED FOR ASSISTING W EAKER SECTIONS, POOR PEOPLE BY PROVIDING FOOD, CLOTH, EDU CATION ETC., HONBLE KARNATAKA HIGH COURT IN THE CASE OF DIT(E) V. MEENAKSHI AMMA ENDOWMENT TRUST (SUPRA) HAS CLEARLY HELD THAT ONE COULD NOT EXPECT A TRUST TO CARRY OUT CHARITABLE ACTIVIT IES IMMEDIATELY ON THE DAY IT HAD COME INTO EXISTENCE AND IN SUCH A SITUATION THE CONCERNED AUTHORITY COULD NOT COME TO A CONCLUSION THAT THE TRUST ITA. 1953/MDS/2012 4 WAS NOT INTENDING TO DO ANY CHARITABLE ACTIVITY. THEIR LORDSHIPS ALSO OBSERVED THAT ACTIVITIES OF THE TRUST WERE TO BE CONSIDERED, IF A REGISTRATION WAS SOUGHT LONG AFTER THE FORMATION OF THE TRUST. IN SO FAR AS RELIANCE PLACED BY THE LD. DEPARTMENTAL REPRESENTATIVE ON THE DECISION OF HONBLE KERALA HIGH COURT IN THE CASE OF SELF- EMPLOYERS SERVICE SOCIETY VS. CIT(SUPRA), THE SAID SOCIETY WAS CARRYING ON ACTIVITIES FOR GENERATING INCOME TO ITS MEMBERS, WHO WERE MAINLY MERCHANTS. IN OUR OPINION, THIS DOES NO T HAVE ANY RELEVANCE HERE. WE ARE OF THE OPINION THAT THE RE ASONS CITED BY THE CIT FOR DENYING REGISTRATION TO THE ASSESSEE UN DER SECTION 12AA DO NOT STAND THE TEST OF LAW. WE QUASH THE OR DER AND DIRECT THE CIT TO GRANT THE ASSESSEE REGISTRATION SOUGHT B Y IT UNDER SECTION 12AA OF THE ACT. 6. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF HEARING ON 28 TH JANUARY, JANUARY, 2013. SD/- SD/- (VIKAS AWASTHY) (ABRAHAM P GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED 28 TH JANUARY, 2013. K S SUNDARAM COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE ITA. 1953/MDS/2012 5 SEC.12AA & SEC.80 G IN THE CASE OF DIT(E) V. MEENAKSHI AMMA ENDOWMENT T RUST (SUPRA), HONBLE KARNATAKA HIGH COURT CLEARLY HELD THAT ACTIVITIES OF THE TRUST HAD TO BE CONSIDERED ONLY IF REGISTRAT ION WAS SOUGHT LONG AFTER THE FORMATION OF THE TRUST. IN THE SAID CASE, THE TRUST WAS FOUND ON 23 RD JANUARY, 2008 WITH A CONTRIBUTION OF ` 1000/- BY EACH OF THE TRUSTEES AND IT HAD SOUGHT REGISTRATION WITH DIT(E) ON 31 ST OCTOBER, 2008. THEIR LORDSHIP HELD THAT IN SUCH A SITUATION, IT COULD NOT BE EXPECTED THAT THE TRUST WOULD CARRY OU T ANY CHARITABLE ACTIVITY DURING THE SHORT SPAN OF NINE M ONTHS AND FOR THIS REASON, THE CONCERNED AUTHORITY COULD NOT COME TO A CONCLUSION THAT THE TRUST WAS NOT INTENDING TO DO A NY CHARITABLE ACTIVITY. ITA. 1953/MDS/2012 6