Shri Swaminarayan Mandir , Ahmedabad V. The DIT(Exemp.), Ahmedabad

ITA 2684/AHD/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6267 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 10-04-2017
• Assessment Year: misc
• Appeal Filed On: 18-11-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R I PATEL
• Assessee Lawyers: ANIL R SHAH
• Keywords: Opportunity of being heard; Reasonable cause
• Section: 12A; 12AA; 12; 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ITA.NO.2684/AHD/2013 / ASSTT.YEAR : - SHRI SWAMINARAYAN MANDIR POST: KANBHA TA: DASCROI DIST : AHMEDABAD 382 430. PAN : AAJTS 1619 Q VS DIRECTOR OF INCOME - TAX (EXEMPTION) AHMEDABAD. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI ANIL R. SHAH AR REVENUE BY : SHRI R.I. PATEL , CIT - DR / DATE OF HEARING : 10/04/2017 / DATE OF PRONOUNCEMENT: 10/04/2017 !'/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: PRESENT APPEAL IS DIRECTED AT THE INSTANCE OF THE A SSESSEE AGAINST ORDER OF THE LD.DIRECTOR OF INCOME-TAX (EXEMPTIONS), AHME DABAD DATED 16.9.2013. 2. SOLE GRIEVANCE OF THE ASSESSEE IS THAT THE LD.D IT(EXEMPTION) HAS ERRED IN NOT GRANTING REGISTRATION UNDER SECTION 12AA OF THE INCOME TAX ACT, 1961. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA S FILED AN APPLICATION INFORM NO.10A UNDER RULE 11AA OF THE ACT ON 30.3.20 13 FOR GRANTING REGISTRATION UNDER SECTION 12A OF THE ACT. IN ORDE R TO GIVE LOGICAL END TO THE ITA NO.2684/AHD/2013 2 PROCEEDINGS, A LETTER DATED 18.6.2013 WAS ISSUED TO THE ASSESSEE FOR FURNISHING THE FOLLOWING DOCUMENTS: (I) COPY OF PAN CARD OF TRUSTEES WITH DETA ILS OF CIRCLE/WARD WHERE THEY ARE FILING RETURN OF INCOME. (II) COPY OF BANK ACCOUNT SINCE INCEPTION OF TRUST OR LAST THREE YEARS. (III) CERTIFIED COPY OF TRUST DEED /M.O.A, IF IT IS NOT IN ENGLISH THEN CERTIFIED ENGLISH TRANSLATION ALSO (IV) PLEASE GIVE DETAILS OF PREMISES OF TRUST WHETHER PREMISES OWNED BY THE TRUST OR RENTED. (V) PLEASE SUBMIT LIST OF MAIN OBJECTS OF TH E TRUST. (VI) PLEASE GIVE DETAILS AS TO HOW THE TRUST GENERATES FUNDS FOR ACHIEVING THE OBJECT OF TRUST, (VII) PLEASE SUBMIT EVIDENCES THAT THE COR PUS AMOUNT HAS BEEN TRANSFERRED TO THE TRUST/INSTITUTION, (VIII) PLEASE SPECIFY THAT THE TRUST IS IN REC EIPT OF AMOUNTS MENTIONED IN FIRST PROVISO TO SECTION 2(15) OF THE IT.ACT. (IX) PLEASE SUBMIT DOCUMENTARY EVIDENCES OF A CTUAL CHARITABLE ACTIVITIES CARRIED OUT BY THE TRUST FROM THE DATE O F INCEPTION OF TRUST TILL DATE. (X) PLEASE SPECIFY THE CLAUSE IN TRUST DEED REGARDING REVOCABILITY OR IRREVOCABILITY, (XI) COPY OF CERTIFICATE OF UNDERTAKING (XII) COPY OF CERTIFICATE U/S. 1.3(1) (C) OF T HE I.T.ACT (XIII) DECLARATION U/S. 11(5) OF THE I.T.ACT (XIV) PLEASE SPECIFY THE CLAUSE IN THE TRUST DEE D WHICH SAYS THAT BENEFICIARIES WOULD BE WITHOUT DISCRIMINATION ON TH E BASIS OF CASTE, CREED, RELIGION OR SEX. 4. IT APPEARS THAT THE ASSESSEE-TRUST WAS NOT HAVIN G A TRUST DEED. IT WAS POINTED OUT TO THE LD.DIT(EXEMPTION) THAT TRUST CAM E INTO EXISTENCE ON 29.5.1952 AND IT HAD APPLIED FOR REGISTRATION CERTI FICATE WITH THE CHARITY COMMISSIONER ON 24.10.1952, BUT IT FAILED TO SUBMIT COPY OF ANY TRUST DEED. INSPITE OF REPEATED OPPORTUNITY GIVEN TO THE ASSESS EE-TRUST, IT COULD NOT COMPLY WITH THE REQUIREMENT CALLED FOR BY THE LD.DIT(EXEMP TION). ULTIMATELY, APPLICATION FOR GRANT OF REGISTRATION WAS REJECTED BY THE LD.DIT. THE RELEVANT PART OF THE ORDER READS AS UNDER: ITA NO.2684/AHD/2013 3 6 THE APPLICANT'S SUBMISSION IS CONSIDERED BUT NOT ACCEPTED. FROM THE SUBMISSION DATED 29/08/2013 IT IS CLEAR THAT THE TR UST DISCRIMINATES BETWEEN MEN AND WOMEN AS IT HAS TWO SEPARATE TEMPLE S, ONE FOR MEN AND OTHER FOR WOMEN. THEREFORE, REGISTRATION U/S 12 AA CANNOT BE GIVEN TO THE TRUST. 7 FURTHER, AS PER I.T. RULES IN FORM 10A CLAUSE 5(1 ) SAYS THAT CERTIFIED COPY OF THE INSTRUMENT UNDER WHICH THE TRUST WAS CR EATED/ESTABLISHED TOGETHER WITH THE COPY THEREOF MUST BE ENCLOSED WIT H THE APPLICATION 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 OR DOCUMENT IT CANNOT BE KN OWN WHAT WERE THE OBJECTS OF THE TRUST ORIGINALLY. WHETHER, THE OBJEC TS HAVE SINCE CHANGED. IF THE TRUST CHANGES ITS OBJECTS IN FUTURE AGAIN IT WOULD NOT BE VERIFIABLE. IN THE ABSENCE OF DEED, IT CANNOT BE KNOWN AS TO WH AT WILL HAPPEN TO ASSETS UPON ITS DISSOLUTION. THE TRUST IS ALREADY D IFFERENTIATING BETWEEN MEN AND WOMEN AS STATED ABOVE. IN VIEW OF THESE FAC TS THE APPLICATION FILED INFORM NO. 10A FOR REGISTRATION U/S. 12AA IS REJECTED. 5. THE LD.COUNSEL FOR THE ASSESSEE AT THE VERY OUTS ET SUBMITTED THAT THE ASSESSEE HAS FORMULATED A TRUST-DEED. IT HAS APPLI ED FOR REGISTRATION WITH CHARITY COMMISSIONER. COPY OF SUCH APPLICATION HAS BEEN PLACED ON PAGE NO.63 OF THE PAPER BOOK. THE APPLICATION FOR REGIS TRATION WITH CHARITY COMMISSIONER IS STATED TO BE STILL PENDING. THE LD .COUNSEL FOR THE ASSESSEE PRAYED FOR SOME MORE TIME FOR FILING REGISTERED COP Y OF THE TRUST-DEED IN ORDER TO DEMONSTRATE GENUINENESS OF THE TRUST. 6. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, W E HAVE GONE THROUGH THE RECORD CAREFULLY. SECTION 12AA PROVIDES FOR MECHAN ISM FOR GRANT OF REGISTRATION UNDER SECTION 12AA OF THE INCOME TAX A CT. THE RELEVANT PART OF THE SECTION READS AS UNDER: SECTION 12AA ITA NO.2684/AHD/2013 4 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 : 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: ITA NO.2684/AHD/2013 5 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: 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.] 7. 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. IN THE PRESENT CASE, THE ASSESSEE WA S NOT HAVING ANY TRUST DEED. SO IT IS QUITE DIFFICULT FOR THE LD.COMMISSIONER TO ARRIVE AT A FIRM CONCLUSION ABOUT THE OBJECTS OF THE TRUST. IN CASE THE TRUST DEED IS BEING WRITTEN AFTER APPLICATION FOR GRANT OF REGISTRATION, THEN THAT DE ED CAN NEVER BE SEEN THROUGH BY THE LD.COMMISSIONER FOR SATISFYING HIMSELF. IN ANY CASE, WE HAVE TO SET ASIDE THE PROCEEDINGS TO THE FILE OF THE LD.COMMSSI ONER FOR SATISFYING HIMSELF ABOUT THE OBJECTS OF THE TRUST. BEFORE US ALSO, CO PY OF THE TRUST-DEED WITH THE ITA NO.2684/AHD/2013 6 CHARITY COMMISSIONER HAS NOT BEEN PLACED ON RECORD. THE ASSESSEE IS YET TO RECEIVE A REGISTRATION CERTIFICATE FROM THE CHARITY COMMISSIONER. IN THIS BACKGROUND, WE DEEM IT APPROPRIATE TO DISMISS THIS APPLICATION AT THIS STAGE BEING PREMATURE WITH A LIBERTY TO THE ASSESSEE TO F ILE FRESH APPLICATION BEFORE THE LD.COMMISSIONER FOR GRANT OF REGISTRATION AS AN D WHEN IT FULFILLS NECESSARY REQUIREMENTS. IN CASE THE ASSESSEE HAS APPLIED AFR ESH FOR GRANT OF REGISTRATION, THAT APPLICATION WILL BE DECIDED ON MERIT IN ACCORD ANCE WITH LAW WITHOUT GETTING INFLUENCED WITH DISMISSAL OF THE PRESENT AP PEAL. THE OBSERVATIONS MADE BY US WILL NOT IMPAIR OR INJU RE THE CASE OF THE AO AND WILL NOT CAUSE ANY PREJUDICE TO THE DEFENCE/EXPLANATION OF THE ASSESSEE. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER PRONOUNCED IN THE COURT ON 10 TH APRIL, 2017 AT AHMEDABAD. SD/- SD/- ( AMARJIT SINGH ) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER