Shantinathji Jain Derasar Trust, Ahmedabad V. The DIT(Exemption), Ahmedabad

ITA 2316/AHD/2013

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 4242 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 08-08-2017
• Assessment Year: misc
• Appeal Filed On: 17-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M K PATEL
• Keywords: Opportunity of being heard; Reasonable cause
• Section: 12; 11; 12A; 12AA

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ ITA.NO.2316 /AHD/2013 / ASSTT. YEAR: SHANTINATHJI JAIN DERASAR TRUST SUTHARA SHERI AT & PO, THARAD 385 565 TAL. THARAD, DIST. BANASKANTHA. PAN : AABTS 12010 K VS DIRECTOR OF INCOME-TAX (EXEMPTION) NATURE VIEW BLDG. ASHRAM ROAD AHMEDABAD. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : SHRI M.K. PATEL, AR REVENUE BY : SHRI M.S.A.KHAN, CIT - DR / DATE OF HEARING : 08/10/2018 / DATE OF PRONOUNCEMENT: 9 /10/2018 $%/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER PRESENT APPEAL IS DIRECTED AT THE INSTANCE OF THE A SSESSEE AGAINST ORDER OF LD.DIRECTOR OF INCOME-TAX (EXEMPTIONS), AHMEDABA D DATED 6.6.2013 PASSED UNDER SECTION 12AA OF THE INCOME TAX ACT, 19 61. 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE-TRUST HAS FILED AN APPLICATION IN FORM NO.10A ON 31.1.2013 FOR GRANT OF REGISTRATION UNDER SECTION 12AAOF THE INCOME TAX. THE LD.DIT(EXEMPTION) CALLED FOR FOLLO WING DOCUMENTS: (I) CERTIFIED COPY OF TRUST DEED /M.O.A. AND , IF IT IS NOT IN ENGLISH THEN CERTIFIED ENGLISH TRANSLATION ALSO, (II) COPY OF PAN CARD OF TRUST AND ALL TRUST DEED WITH DETAILS OF CIRCLE/WARD WHERE THEY ARE ASSESSED, (III) COPY OF BANK ACCOUNT SINCE INCEPTION OF TRUST OR LAST THREE YEARS WHICHEVER IS LESS, ITA NO.2316/AHD/2013 2 (IV) PLEASE GIVE DETAILS OF PREMISES OF TRUST WHETHER PREMISES OWNED BY THE TRUST OR RENTED. (V) PLEASE SUBMIT LIST OF MAIN OBJECTS OF TR UST, (VI) PLEASE GIVE DETAILS AS TO HOW DOES THE T RUST GENERATE FUNDS FOR ACHIEVING THE OBJECT OF TRUST. (VII) EVIDENCES THAT THE CORPUS AMOUNT HAS BEE N TRANSFERRED TO THE TRUST/INSTITUTION, (VIII) WHETHER THE TRUST IS IN RECEIPT OF AMOUN TS MENTIONED IN FIRST PROVISO TO SECTION 2(15) OF THE L.T. ACT. (IX) DOCUMENTARY EVIDENCE OF ACTUAL CHARITABL E ACTIVITIES CARRIED OUT BY THE TRUST FROM INCEPTION TILL DATE. (X) PLEASE SPECIFY THE CLAUSE IN THE TRUST D EED REGARDING REVOCABILITY OR IRREVOCABILITY, (XI) PLEASE SPECIFY THE CLAUSE IN THE TRUST D EED WHICH SAYS THAT BENEFICIARIES WOULD BE WITHOUT DISCRIMINATION ON THE BASIS OF CASTE, CREED , RELIGION OR SEX. 3. THE APPLICATION OF THE ASSESSEE HAS BEEN DISMISS ED BY HOLDING THAT SINCE THERE IS NO TRUST-DEED AVAILABLE WITH THE ASS ESSEE, IT IS NOT ENTITLED FOR GRANT SUCH REGISTRATION. THE DISCUSSION MADE BY TH E LD.DIT READS AS UNDER: 3. IN THIS CASE IT IS SEEN FROM THE APPLICATION/RE CORD THAT THERE IS NO TRUST DEED FILED BY THE ASSESSEE. IN RESPONSE TO QU ERRY LETTER ISSUED ON 08/02/2013, THE ASSESSEE HAS FILED THE REPLY DATED 22.02.2013 AND REQUESTED FOR ADJOURNMENT. VIDE THIS OFFICE LETTER OF EVEN NO. DATED 06.05.2013 THE TRUST HAS BEEN GRANTED THE TIME UP T O 23.05.2013 FOR FILING THE REQUIRED DOCUMENTS, IN RESPONSE TO THIS LETTER THE ASSESSEE TRUST HAS FILED THE REPLY ON 31/05/2013 IN WHICH IT IS MENTIONED THAT THERE IS NO TRUST DEED BEING VERY OLD TRUST, AND ON LY COPY OF PTR IS FURNISHED. 4. AS PER I.T. RULES IN FORM 10A CLOSE 5(1) SAYS TH AT CERTIFIED COPY OF THE INSTRUMENT UNDER WHICH THE TRUST WAS CREATED/ES TABLISHED TOGETHER WITH THE COPY THEREOF MUST BE ENCLOSED WITH THE APP LICATION FOR REGISTRATION, EVIDENCING THE CREATION OF THE TRUST OR ESTABLISHMENT OF THE TRUST. THERE MUST BE WRITTEN INSTRUMENT BY WAY OF W HICH THE TRUST OR INSTITUTION IS CREATED/ESTABLISHED FROM WHICH ITS O BJECTS CAN BE SEEN. IN THE ABSENCE OF THE DEED, IT CANNOT BE KNOWN WHAT WE RE THE OBJECTS OF THE TRUST ORIGINALLY. WHETHER, THE OBJECTS HAVE SIN CE CHANGED. IF THE TRUST CHANGES ITS OBJECTS IN FUTURE AGAIN IT WOULD NOT BE VERIFIABLE. WHETHER THE TRUST IS FOR ANY PARTICULAR CASTE, CREE D ETC. CANNOT ALSO BE KNOWN. IN VIEW OF THIS FACT THE APPLICANT FOR REGIS TRATION U/S. 12AA IS LIABLE TO BE REJECTED AS EVEN ITS OBJECTS CANNOT BE VERIFIED AS REQUIRED BY SECTION 12AA(1). IN ANY CASE IN THE ABSENCE OF D EED, IT CANNOT BE KNOWN AS TO WHAT WILL HAPPEN TO ASSETS UPON ITS DIS SOLUTION. ITA NO.2316/AHD/2013 3 5. IN VIEW OF THE ABOVE, THE APPLICATION FILED IN F ORM NO.10A FOR THE APPROVAL U/S.12AA OF THE INCOME-TAX ACT, 1961, REJECTED. 4. BEFORE US, THE LD.COUNEL FOR THE ASSESSEE SUBMIT TED THAT A FRESH TRUST- DEED HAS BEEN EXECUTED. IT HAS BEEN RATIFIED BY TH E CHARITY COMMISSIONER. THE ASSESSEE HAS ACCORDINGLY COMPLETED DETAILS. HE PRAYED THAT THIS ISSUE BE REMITTED BACK TO THE FILE OF DIT(EXEMPTION) FOR FRE SH ADJUDICATION. HE FURTHER CONTENDED THAT IN THE CASE OF PR.CIT(EXEMPTION) VS. DAWOODI BOHRA MASJID , (2018) 90 TAXMANN.COM 312 (GUJ) REGISTRATION UNDER SECTION 12AA WAS GRANTED TO THE ASSESSEE EVEN BY NOT MAKING AVAILABL E THE TRUST DEED TO THE LD.DIT. THE LD.DR ON THE OTHER HAND RELIED UPON TH E ORDER OF LD.DIT. 5. WE HAVE CONSIDERED RIVAL CONTENTIONS AND GONE TH ROUGH THE RECORD CAREFULLY. SECTION 12AA PROVIDES FOR MECHANISM FOR GRANT OF REGISTRATION UNDER SECTION 12AA OF THE INCOME TAX ACT. THE RELE VANT PART OF THE SECTION READS AS UNDER: SECTION 12AA 12AA. (1) THE [PRINCIPAL COMMISSIONER OR] COMMISSIO NER, ON RECEIPT OF AN APPLICATION FOR REGISTRATION OF A TRUST OR IN STITUTION MADE UNDER CLAUSE (A) [OR CLAUSE (AA) OF SUB-SECTION (1)] OF SECTION 12A, SHALL (A) CALL FOR SUCH DOCUMENTS OR INFORMATION FROM THE TRUST OR INSTITUTION AS HE THINKS NECESSARY IN ORDER TO SATISFY HIMSELF ABOUT THE GENUINENESS OF ACTIVITIES OF THE TRUST OR INSTITUTION AND MAY A LSO MAKE SUCH INQUIRIES AS HE MAY DEEM NECESSARY IN THIS BEHALF; AND (B) AFTER SATISFYING HIMSELF ABOUT THE OBJECTS OF T HE TRUST OR INSTITUTION AND THE GENUINENESS OF ITS ACTIVITIES, HE (I) SHALL PASS AN ORDER IN WRITING REGISTERING THE TRUST OR INSTITUTION; (II) SHALL, IF HE IS NOT SO SATISFIED, PASS AN ORDE R IN WRITING REFUSING TO REGISTER THE TRUST OR INSTITUTION, AND A COPY OF SUCH ORDER SHALL BE SENT TO THE APPLI CANT : ITA NO.2316/AHD/2013 4 PROVIDED THAT NO ORDER UNDER SUB-CLAUSE (II) SHALL BE PASSED UNLESS THE APPLICANT HAS BEEN GIVEN A REASONABLE OPPORTUNITY O F BEING HEARD. [(1A) ALL APPLICATIONS, PENDING BEFORE THE [PRINCIP AL CHIEF COMMISSIONER OR] CHIEF COMMISSIONER ON WHICH NO ORD ER HAS BEEN PASSED UNDER CLAUSE (B) OF SUB-SECTION (1) BEFORE T HE 1ST DAY OF JUNE, 1999, SHALL STAND TRANSFERRED ON THAT DAY TO THE [ PRINCIPAL COMMISSIONER OR] COMMISSIONER AND THE [PRINCIPAL C OMMISSIONER OR] COMMISSIONER MAY PROCEED WITH SUCH APPLICATIONS UNDER THAT SUB- SECTION FROM THE STAGE AT WHICH THEY WERE ON THAT D AY.] (2) EVERY ORDER GRANTING OR REFUSING REGISTRATION U NDER CLAUSE (B) OF SUB-SECTION (1) SHALL BE PASSED BEFORE THE EXPIRY O F SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE APPLICATION WAS RECEI VED UNDER CLAUSE (A) 4[OR CLAUSE (AA) OF SUB-SECTION (1)] OF SECTION 12A.] [(3) WHERE A TRUST OR AN INSTITUTION HAS BEEN GRANT ED REGISTRATION UNDER CLAUSE (B) OF SUB-SECTION (1) [OR HAS OBTAINED REGI STRATION AT ANY TIME UNDER SECTION 12A [AS IT STOOD BEFORE ITS AMENDMENT BY THE FINANCE (NO. 2) ACT, 1996 (33 OF 1996)]] AND SUBSEQUENTLY T HE [PRINCIPAL COMMISSIONER OR] COMMISSIONER IS SATISFIED THAT THE ACTIVITIES OF SUCH TRUST OR INSTITUTION ARE NOT GENUINE OR ARE NOT BEI NG CARRIED OUT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST OR INSTITU TION, AS THE CASE MAY BE, HE SHALL PASS AN ORDER IN WRITING CANCELLING TH E REGISTRATION OF SUCH TRUST OR INSTITUTION: PROVIDED THAT NO ORDER UNDER THIS SUB-SECTION SHALL BE PASSED UNLESS SUCH TRUST OR INSTITUTION HAS BEEN GIVEN A REASONAB LE OPPORTUNITY OF BEING HEARD.] [(4) WITHOUT PREJUDICE TO THE PROVISIONS OF SUB-SEC TION (3), WHERE A TRUST OR AN INSTITUTION HAS BEEN GRANTED REGISTRATI ON UNDER CLAUSE (B) OF SUB-SECTION (1) OR HAS OBTAINED REGISTRATION AT ANY TIME UNDER SECTION 12A [AS IT STOOD BEFORE ITS AMENDMENT BY THE FINANC E (NO. 2) ACT, 1996 (33 OF 1996)] AND SUBSEQUENTLY IT IS NOTICED THAT T HE ACTIVITIES OF THE TRUST OR THE INSTITUTION ARE BEING CARRIED OUT IN A MANNER THAT THE PROVISIONS OF SECTIONS 11 AND 12 DO NOT APPLY TO EX CLUDE EITHER WHOLE OR ANY PART OF THE INCOME OF SUCH TRUST OR INSTITUT ION DUE TO OPERATION OF SUB-SECTION (1) OF SECTION 13, THEN, THE PRINCIPAL COMMISSIONER OR THE COMMISSIONER MAY BY AN ORDER IN WRITING CANCEL THE REGISTRATION OF SUCH TRUST OR INSTITUTION: ITA NO.2316/AHD/2013 5 PROVIDED THAT THE REGISTRATION SHALL NOT BE CANCELL ED UNDER THIS SUB- SECTION, IF THE TRUST OR INSTITUTION PROVES THAT TH ERE WAS A REASONABLE CAUSE FOR THE ACTIVITIES TO BE CARRIED OUT IN THE S AID MANNER.] 6. A PERUSAL OF SUB-SECTION (1) WOULD INDICATE THAT PRINCIPAL COMMISSIONER OR COMMISSIONER ON RECEIPT OF APPLICAT ION FOR REGISTRATION OF TRUST OR INSTITUTION MADE UNDER CLAUSE (A) OR CLAUS E (AA) OF THE SUB-SECTION 1 OF SECTION 12A SHALL CALL FOR SUCH DOCUMENTS OR INFORM ATION FROM THE TRUST OR INSTITUTION AS HE THINKS NECESSARY IN ORDER TO SATI SFY HIMSELF ABOUT THE GENUINENESS OF THE ACTIVITY OF THE TRUST. IN OTHER WORDS, THE LD.COMMISSIONER IS REQUIRED TO CONDUCT AN INQUIRY FOR SATISFYING HI MSELF ABOUT THE GENUINENESS OF THE TRUST. 7. IN THE PRESENT CASE ON HAND, THE PRIME REASON FO R DENYING OF REGISTRATION TO THE ASSESSEE WAS THAT TRUST DEED WAS NOT SUBMITT ED. THE CASE OF THE ASSESSEE WAS THAT IT WAS VERY OLD TRUST AND ONLY COPY OF PTR IS AVAILABLE. NOW TRUST DEED HAS BEEN EXECUTED, THEREFORE, WHETHER ACTIVITI ES OF THE TRUST ARE GENUINE OR NOT REQUIRED TO BE EXAMINED AFRESH. WE SET ASID E ORDER OF THE LD.DIT AND RESTORE THIS ISSUE TO HIS FILE FOR ADJUDICATION OF THE APPLICATION SUBMITTED BY THE ASSESSEE IN FORM NO.10A FOR GRANT OF REGISTRATI ON UNDER SECTION 12AA OF THE INCOME TAX ACT, 1961. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT ON 10 TH OCTOBER, 2018 AT AHMEDABAD. SD/- SD/- ( PRADIPKUMAR KEDIA ) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 10/10/2018