SHRI PUJYA SHRI UMESH MUNI ANU JAIN PARMARTHIIK TRUST, V. THE CIT, UJJIAN,

ITA 273/IND/2008

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2438 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-12-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 26-11-2009
• Assessment Year: 2004-2005
• Appeal Filed On: 19-06-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K K SINGH
• Assessee Lawyers: MANUBHAI PATEL
• Keywords: Charitable institution
• Section: 12A

Judgement Text

PAGE 1 OF 6 - I.T.A.NO. 273/IND/2008 PUJYA SHRI UMESH MUNI ANU JAIN, THANDLA, DIST.JH ABUA IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH : INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI V.K. GUPTA, ACCOUNTANT MEMBER PAN NO. : N.A. I.T.A.NO.273/IND/2008 U/S 12A/AA PUJYA SHRI UMESH MUNI ANU JAIN PARMARTHIKK TRUST, COMMISSIONER OF INCOME-TAX, UJJAIN THANDLA, VS DISTRICT JHABUA (MP) APPELLANT RESPONDENT APPELLANT BY : SHRI MANUBHAI PATEL, C. A. RESPONDENT BY : SHRI K.K.SINGH, CIT DR DATE OF HEARING : 26/11/2009 O R D E R PER V.K. GUPTA, A.M. THIS APPEAL FILED BY THE ASSESSEE ARISES OUT OF ORD ER OF THE LD. CIT, UJJAIN, DATED 30.04.2008. 2. WE HAVE HEARD BOTH THE PARTIES AND HAVE ALSO PERUSE D THE MATERIAL AVAILABLE ON RECORD. 3. IN THIS APPEAL, THE ASSESSEE AGGRIEVED BY THE DECI SION OF THE LD. CIT, UJJAIN, IN GRANTING REGISTRATION U/S 12A/12AA OF THE INCOME-TAX ACT, 1961. PAGE 2 OF 6 - I.T.A.NO. 273/IND/2008 PUJYA SHRI UMESH MUNI ANU JAIN, THANDLA, DIST.JH ABUA 4. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE FILED AN APPLICATION FOR REGISTRATION U/S 12A/12AA ON 24.2.2006, WHICH WAS R EJECTED BY THE CIT VIDE ORDER DATED 26.9.2006. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE TRIBUNAL VIDE ITS ORDER DATED 14.2.2007 RESTORED TH E MATTER TO THE FILE OF LD. CIT FOR DECIDING THE ISSUE AFRESH. THE LD. CIT AGAIN REFUSED THE REGISTRATION. THE ASSESSEE AGAIN FILED AN APPEAL BE FORE THE TRIBUNAL, WHO VIDE ITS ORDER DATED 12.10.2007 RESTORED THE MATTER BACK TO THE FILE OF LD. CIT FOR RE-CONSIDERATION OF THE ISSUE IN THE LIGHT OF OBSERVATIONS MADE BY THE TRIBUNAL IN SUCH ORDER. THE LD. CIT, THEREAFTE R, EXAMINED THE ISSUE AFRESH. THE ASSESSEE, IN THE COURSE OF SUCH PROCEED INGS, SUBMITTED THAT IN THE SHOW CAUSE NOTICE ISSUED BY THE LD. CIT, CLAUS E (8) AND CLAUSE (13) HAD AGAIN BEEN REFERRED, WHICH WAS IN CONTRAVENTION OF THE DIRECTIONS OF THE TRIBUNAL, WHEREBY THE TRIBUNAL HAD DIRECTED THE LD. CIT TO DECIDE THE ISSUE AFTER CONSIDERING SUB PARAGRAPHS (1) TO (7) O F CLAUSE (6) OF THE TRUST DEED. AS REGARDS, REFERENCE BY THE LD. CIT TO THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF GANGABAI TRUST, AS REP ORTED IN 197 ITR 416, THE ASSESSEE CONTENDED THAT IT WAS NOT TO BE CONSID ERED IN VIEW OF THE DECISION OF THE TRIBUNAL. THE ASSESSEE ALSO DISTING UISHED THIS DECISION ON FACTS FOR THE REASON THAT IN THAT CASE, THERE WAS N O MENTION IN THE TRUST DEED AS TO THE UTILIZATION OF INCOME DERIVED FROM T HE PROPERTY IN THE ABSENCE OF OBJECTS OF THE TRUST, WHEREAS IN THE PRE SENT CASE, IT WAS NOT SO PAGE 3 OF 6 - I.T.A.NO. 273/IND/2008 PUJYA SHRI UMESH MUNI ANU JAIN, THANDLA, DIST.JH ABUA AND REFERRED TO CLAUSE NO.(2) OF THE OBJECTS OF THE ASSESSEE TRUST TO SUPPORT THIS CONTENTION. THE ASSESSEE ALSO SUBMITTED THAT A LL THE OBJECTS MENTIONED IN CLAUSE (6) OF TRUST DEED WERE OF CHARITABLE NATU RE AND THE ACTIVITIES OF RUNNING A SCHOOL IN ADIVASI AREA, IN FACT, PROVED T HE GENUINENESS OF THE OBJECTS OF THE TRUST. THE ASSESSEE ALSO PLACED RELI ANCE ON THE DECISION OF THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF SAN JEEVAMMA HANUMANTHE GOWDA CHARITABLE TRUST, AS REPORTED IN 2 85 ITR 327. THE LD. CIT RELYING ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF EAST INDIA INDUSTRIES, AS REPORTED IN 65 ITR 611, A ND YOGIRAJ CHARITY TRUST, AS REPORTED IN 103 ITR 77, HELD THAT IT WAS OBLIGATORY FOR A TRUST TO BE TREATED AS ESTABLISHED FOR CHARITABLE OR RELIGIO US PURPOSES THAT ALL THE OBJECTS SHOULD BE OF THAT NATURE. THEREAFTER, THE L D. CIT ACTUALLY EXAMINED THE OBJECTS OF THE ASSESSEE TRUST AND IN PARTICULAR , OBJECT NO.2 RELATING TO CREATION OF PERMANENT FUND FOR DEVELOPMENT OF NATIO N AND RELIGION AND TO ARRANGE PROGRAMMES FOR CREATING AWARENESS THE LD. C IT, IN THIS REGARD, REFERRED TO THE DECISIONS OF THE HON'BLE SUPREME CO URT IN THE CASE OF GANGABAI CHARITIES, AS REPORTED IN 197 ITR 146 AND HELD THAT SUCH OBJECT AT SERIAL NO.2 OF THE TRUST DEED COULD NOT BE CONSI DERED AS OF CHARITABLE NATURE, THOUGH DEFINITELY SUCH OBJECT WAS LAUDABLE. THE LD. CIT, THEREAFTER, ALSO HELD THAT TRUST COULD APPLY THE IN COME OF TRUST ON OTHER WORK, WHICH WAS NEITHER RELIGIOUS NOR CHARITABLE. T HE LD. CIT, PAGE 4 OF 6 - I.T.A.NO. 273/IND/2008 PUJYA SHRI UMESH MUNI ANU JAIN, THANDLA, DIST.JH ABUA ACCORDINGLY, AGAIN REFUSED THE REGISTRATION U/S 12A TO THE ASSESSEE. STILL AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 5. THE LEARNED COUNSEL FOR THE ASSESSEE NARRATED THE B RIEF HISTORY OF THE CASE AND DREW OUR ATTENTION TO THE RELEVANT PARAGRAPHS OF EARLIER TWO ORDERS OF THE TRIBUNAL. HE ALSO CONTENDED THAT AGAINST SECOND ORDER OF THE TRIBUNAL, THE DEPARTMENT FILED AN APPEAL BEF ORE THE HON'BLE HIGH COURT, WHEREIN THE HON'BLE HIGH COURT REFUSED TO IN TERFERE. HE FURTHER SUBMITTED THAT THE DEPARTMENT HAD ADOPTED A HARASSI NG ATTITUDE AND EVEN DID NOT FOLLOW THE DIRECTIONS OF THE TRIBUNAL, WHIC H IT WAS REQUIRED TO DO. THE LEARNED COUNSEL, THEREAFTER, DREW OUR ATTENTION TO THE CLAUSE RELATING TO DISTRIBUTION OF WORK TO THE TRUSTEES AND CONTEND ED THAT THE LD. CIT AGAIN DENIED THE REGISTRATION RELYING ON THE CLAUSE 8 & 13, WHICH WERE NOT THE MAIN OBJECTS RATHER THESE WERE RELATED TO THE P OWERS OF THE TRUSTEES TO ATTAIN THE MAIN OBJECTS OF THE ASSESSEE TRUST. BESI DES THIS, HE REITERATED THE SUBMISSIONS MADE BEFORE THE LD. CIT. 6. THE LD. CIT DR CONTENDED THAT IT WAS NOT CORRECT TO SAY THAT THE TRIBUNAL HAD DIRECTED THE LD. CIT TO DECIDE THE ISS UE ONLY IN THE LIGHT OF THE OBJECTS AT SUB CLAUSE (1) TO (7) OF SUB CLAUSE 6 OF MAIN OBJECT OF THE TRUST ONLY AND DREW OUR ATTENTION TO THE LAST PARA OF THE ORDER OF THE TRIBUNAL DATED 14.2.2007 AT PAGE 67 OF THE PAPER BO OK. HE FURTHER CONTENDED THAT BY VIRTUE OF CLAUSE (8) AND (13), TH E ASSESSEE GAVE THE PAGE 5 OF 6 - I.T.A.NO. 273/IND/2008 PUJYA SHRI UMESH MUNI ANU JAIN, THANDLA, DIST.JH ABUA POWERS TO THE TRUSTEES TO UNDERTAKE ACTIVITIES OF N ON-CHARITABLE OR NON- RELIGIOUS PURPOSE. HENCE, THE REGISTRATION WAS RIGH TLY REFUSED. HE FURTHER PLACED RELIANCE ON THE ORDER OF THE LD. CIT. 7. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES, MATERIAL ON RECORD AND THE ORDERS OF THE AUTHORITIE S BELOW. 8. IT IS NOTED THAT THIS IS THE THIRD ROUND OF LITIGAT ION. WE HAVE ALSO PERUSED THE MAIN OBJECTS AS MENTIONED IN SUB CLAUSE (1) TO (7) OF CLAUSE 6 OF MAIN OBJECTS OF TRUST. WE HAVE ALSO PERUSED THE OTHER TWO CLAUSES I.E. RELATING TO CREATION OF A PERMANENT FUND FOR SOCIAL /CULTURAL AWARENESS AND OTHER WORK, WHICH HAVE BEEN HEAVILY RELIED ON BY TH E LD. CIT TO HOLD THAT ALL THE OBJECTS OF THE ASSESSEE TRUST WERE NOT OF T HE CHARITABLE NATURE. WE ARE, HOWEVER, UNABLE TO ACCEPT THIS VIEW OF THE LD. CIT FOR THE REASON THAT THESE CLAUSES GIVE ANCILLARY POWERS TO THE TRUSTEES FOR THE ATTAINMENT OF THE MAIN OBJECTS, WHICH, IN OUR OPINION, ARE OF CHA RITABLE PURPOSE BEYOND ANY DOUBT. WE ARE ALSO OF THE VIEW THAT THE LD. CIT REFUSED THIS APPLICATION FOR THE FIRST TIME IN APRIL, 2006,AND T HE IMPUGNED ORDER HAS BEEN PASSED ON 30.4.2008, AND INSPITE OF THIS TIME GAP, EXCEPT RELYING ON THESE TWO CLAUSES TO REFUSE THE REGISTRATION, NO EV IDENCE HAS BEEN BROUGHT ON RECORD BY THE LD. CIT TO SHOW THAT ASSESSEE TRU ST ACTUALLY SPENT SOME MONEY BELONGING TO THE TRUST FOR NON-CHARITABLE OR NON-RELIGIOUS PURPOSES, HENCE, THE VIEW TAKEN BY HER IS NOTHING BUT A CASE OF SUSPICION ONLY. WE PAGE 6 OF 6 - I.T.A.NO. 273/IND/2008 PUJYA SHRI UMESH MUNI ANU JAIN, THANDLA, DIST.JH ABUA ALSO FIND THAT THE DECISION OF THE HON'BLE SUPREME COURT RELIED ON BY THE LD. CIT ARE DISTINGUISHABLE ON FACTS, HENCE, THE R ATIO OF THE SAME IS NOT APPLICABLE. THUS, TAKING INTO CONSIDERATION ENTIRE FACTS, WE DIRECT THE LD. CIT TO GRANT THE REGISTRATION TO THE ASSESSEE U/S 1 2A/12AA. THUS, ALL THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 10 TH DECEMBER, 2009. SD/- SD/- (JOGINDER SINGH) (V. K. GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 10 TH DECEMBER, 2009. CPU* 2611712