Founder Ramachandra Iyer Trust, CHENNAI V. DIT, CHENNAI

ITA 2144/CHNY/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5205 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-05-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 10-05-2011
• Assessment Year: misc
• Appeal Filed On: 20-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIRUDH RAI
• Assessee Lawyers: PUSHYA SITTARAMAN
• Keywords: Search and seizure
• Section: 80G; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHENNAI BENCH D BEFORE DR.O.K.NARAYANAN, VICE PRESIDENT AND SHRI HARI OM MARATHA, JUDICIAL MEMBER I.T.A. NO. 2143 & 2144/MDS/2010 FOUNDER RAMACHANDRA IYER TRUST NO. 5, MAIN ROAD DR. SUBBARAYA NAGAR KODAMBAKKAM CHENNAI 600 024. VS THE DIRECTOR OF INCOME TAX, [EXEMPTIONS] CHENNAI-34 (APPELLANT) (RESPONDENT) ASSESSEE BY SMT. PUSHYA SITTARAMAN DEPARTMENT BY : SHRI ANIRUDH RAI O R D E R PER HARI OM MARATHA, JUDICIAL MEMBER: THESE TWO APPEALS FILED BY THE ASSESSE E-TRUST ARE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME-TAX (EXEMPTIONS) AT CHENNAI DATED 30.09.2010. ITA NO. 2143 & 2144/MDS/2010 :- 2 -: 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSEE TRUST APPLIED FOR REGISTRATION U/S 12AA OF THE INCO ME-TAX ACT, 1961 [IN SHORT, THE ACT] ON 15.3.2010 IN FORM 10A A ND IN FORM NO. 10% FOR GRANT OF APPROVAL U/S 80G OF THE ACT. THE TRUST WAS CREATED VIDE A TRUST DEED, DATED 05.03.2010. AFTER VERIFYING THE RECORDS, THE DIT[EXEMPTIONS] FOUND THAT THE TRUST H AS NOT DONE ANY EFFECTIVE ACTIVITY SO FAR, SO, IT WAS NOT POSSI BLE TO SATISFY WHETHER THE OBJECTS OF THE TRUST ARE CARRIED IN THE MANNER THEY ARE INCORPORATED IN THE DEED OR NOT. IN THESE CIRC UMSTANCES, HE OBSERVED THAT IT WAS PREMATURE CASE FOR REGISTRATIO N OF THE TRUST U/S 12AA OF THE ACT, HENCE, HE REJECTED THE APPLICA TION BY OBSERVING THAT THE TRUST CAN APPLY AFTER IT HAD DON E SIGNIFICANT ACTIVITIES. AGGRIEVED, THE TRUST HAS FILED THESE A PPEALS. 3. WE HAVE HEARD BOTH THE SIDES, VIS-A-VIS THE OBTA INING FACTS AND THE CIRCUMSTANCES OF THE CASE. IT WAS ARGUED B Y THE LD. A.R. THAT AFTER THE TRUST WAS CONSTITUTED ON 05.3.2010 A PPLICATION IN FORM 10-A WAS FILED ON 15.3.10 U/S 12AA, APPLICATIO N IN FORM NO. 10A AND FOR GRANT OF APPROVAL U/S 80G OF THE AC T. THE DIT [EXEMPTIONS], THROUGH HIS LETTER DATED 06.8.2010 SO UGHT CERTAIN CLARIFICATIONS AND THE TRUST IMMEDIATELY FURNISHED REQUISITE ITA NO. 2143 & 2144/MDS/2010 :- 3 -: ADDITIONAL INFORMATION ON 17.8.2010. STILL THE DIT[ EXEMPTIONS] REJECTED THE APPLICATION U/S 12AA OF THE ACT VIDE H IS ORDER DATED 30.9.2010. SHE ARGUED THAT WHEN THE TRUST WAS HAVING CHARITABLE OBJECTS AND THE CONCERNED AUTHORITY HAS NOT FOUND ANYTHING CONTRARY WHICH CAN BRING THE OBJECTS OF TH E TRUST OUT OF THE PURVIEW OF SECTION 12AA OF THE ACT, IT IS NOT J USTIFIED TO SEEK INFORMATION REGARDING APPLICATION OF EITHER THE FUN DS OR REGARDING PURSUING ITS OBJECTS WITHIN A SHORT SPAN OF TIME. 4. ON THE OTHER HAND, THE LD. D.R. ARGUED THAT FROM THE INCEPTION OF SECTION 12AA OF THE ACT, THE DIT[EXEMP TIONS] OR COMMISSIONER OF INCOME-TAX [APPEALS], ON RECEIPT OF AN APPLICATION FOR REGISTRATION OF TRUST FILED UNDER C LAUSE (A) OF SECTION 12AA OF THE ACT MAY CALL FOR SUCH DOCUMENTS OR INFORMATION FROM THE TRUST AS HE THINKS NECESSARY F OR SATISFYING HIMSELF ABOUT THE GENUINENESS OF THE ACTIVITIES OF THE TRUST AND MAY ALSO MAKE SUCH ENQUIRIES AS HE MAY DEEM NECESSA RY IN THIS BEHALF. IT IS ONLY AFTER SATISFYING HIMSELF ABOUT THE OBJECTS OF THE TRUST AND THE GENUINENESS OF ITS ACTIVITIES HE SHALL PASS ORDER IN WRITING REGISTERING THE TRUST AND SHALL, IF HE I S NOT SATISFIED, PASS AN ORDER IN WRITING REFUSING REGISTRATION. ITA NO. 2143 & 2144/MDS/2010 :- 4 -: 5. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND GOIN G THROUGH THE OBJECTS OF THE TRUST, WE DO NOT PORTRAY THAT TH E CIT/DIT[EXEMPTIONS] HAS NO POWER TO CALL FOR SUCH D OCUMENTS OR INFORMATION FROM THE TRUST AS HE THINKS NECESSARY I N ORDER TO SATISFY HIMSELF ABOUT THE GENUINENESS OF THE ACTIVI TIES OF THE TRUST AND ALSO TO MAKE SUCH ENQUIRIES AS HE DEEMS N ECESSARY IN THIS BEHALF. BUT SUCH SATISFACTION HAS TO BE OBJECT IVE AND NOT SUBJECTIVE IN NATURE. FROM THE RECORDS AVAILABLE B EFORE US, IT IS FOUND THAT THE TRUST WAS CONSTITUTED ON 5.3.2010 AN D IT FILED APPLICATION ON 15.3.10 IN FORM NO. 10A FOR GRANT OF REGISTRATION U/S 12AA OF THE ACT. UNDENIABLY, DURING THIS SHORT SPAN, THE ASSESSEE HAS PAID ` 1,05,958/- TOWARDS EDUCATIONAL ASSISTANCE. THE OBJECTS OF THE TRUST AS PER DEED, WERE EDUCATIO NAL, AMELIORATION OF POVERTY AND CERTAIN OTHERS. 6. THE CIRCUMSPECTION OF THE OBJECTS CLEARLY SUGGES T THAT THEY ARE CHARITABLE IN NATURE. THE LD. DIT [EXEMPT IONS] HAS ALSO NOT EVEN WHISPERED THAT THESE OBJECTS ARE NOT CHARI TABLE IN NATURE. THEREFORE, THE OBJECTS OF THE TRUST ARE DEF INITELY CHARITABLE IN NATURE. IN SO FAR AS GENUINITY OF TH E ACTIVITIES OF ITA NO. 2143 & 2144/MDS/2010 :- 5 -: THE TRUST IS CONCERNED, IT HAS PAID ` 1,05,958/- TOWARDS EDUCATIONAL ASSISTANCE, WHICH ACTIVITY IS DEFINITEL Y A CHARITABLE ONE AND IN CONSONANCE WITH THE OBJECTS OF THE TRUST . THE APPELLATE AUTHORITY HAS MENTIONED IN HIS ORDER THAT THIS APPLICATION IS PREMATURE, BUT WE ARE AFRAID THAT TH IS IS NOT A CORRECT OBSERVATION BECAUSE THERE IS NO TIME FOR AP PLYING FOR REGISTRATION IS PROVIDED IN THE ACT, RATHER FILING OF AN APPLICATION IMMEDIATELY AFTER THE TRUST COMES INTO OPERATION IS A POINTER TOWARDS GENUINITY OF THE TRUST AND INTENTION OF THE TRUSTEES. THERE IS SECTION 12AA(3) UNDER WHICH THE REGISTRATI ON ONCE GRANTED CAN BE WITHDRAWN IF THE TRUST IS FOUND TO N OT CARRYING OUT THE ACTIVITIES IN ACCORDANCE OF ITS OBJECTS OR IF IT FOUND TO BE NON GENUINE. SO, IN OUR CONSIDERED OPINION, LD. DI T[EXEMPTIONS] HAS WRONGLY REFUSED TO GRANT REGISTRATION TO THE TR UST. HENCE WE ORDER THAT REGISTRATION U/S 12AA BE GRANTED TO THE TRUST IMMEDIATELY FROM THE DATE OF APPLICATION. WE MAY O BSERVE THAT VIDE ORDER APPEALED AGAINST THE AUTHORITY REFUSED T O APPROVE THE TRUST U/S 80G OF THE ACT BUT THE TRUST HAS NOT TAKEN SPECIFIC GROUND BEFORE US IN THIS REGARD. NEVERTHELESS, WE MAY OBSERVE ITA NO. 2143 & 2144/MDS/2010 :- 6 -: SINCE THE APPROVAL WAS REFUSED BECAUSE HE HAD DENIE D REGISTRATION, SO IT CAN NOW BE CONSIDERED AFRESH. 7. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASS ESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON TUESDAY, THE 10 TH DAY OF MAY, 2011 AT CHENNAI. SD/- SD/- ( DR.O.K.NARAYANAN) VICE-PRESIDENT (HARI OM MARATHA) JUDICIAL MEMBER CHENNAI : 10 TH MAY, 2011 VL. COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR