M/s. Madan Lal Puran Devi, Amritsar. V. The Commissioner of Income-tax,, Amritsar.

ITA 278/ASR/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63463 (ITAT-AMRITSAR)
• Duration Of Justice: 1 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 25-06-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: K R JAIN
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.278(ASR)/2012 ASSESSMENT YEAR: PAN :AADTM0634P M/S. MADAN LAL PURAN DEVI JAIN TRUST, VS. COMMISSI ONER OF INCOME-TAX-II, AMRITSAR. AMRITSAR. (APPELLANT) (RESPONDENT) APPELLANT BY:SH. K.R.JAIN, ADVOCATE RESPONDENT BY:SH. TARSEM LAL, DR DATE OF HEARING:21/08/2012 DATE OF PRONOUNCEMENT:21/08/2012 ORDER PER BENCH ; THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE IMPUGNED ORDER OF THE COMMISSIONER OF INCOME TAX-II, AMRITSA R, DATED 25.05.2012, ON THE FOLLOWING GROUNDS: 1. THAT THE ORDER OF THE LD. CIT REJECTING THE APP LICATION U/S 12AA OF THE INCOME TAX ACT, 1961 IS WRONG, ILLEGAL AND WITHOUT JURISDICTION. 2. THAT THE LD. CIT HAS NOT APPRECIATED THE FACTS O F THE CASE, DOCUMENTS FILED AND PROCESSED TO REJECT THE APPEAL ARBITRARILY. ITA NO.278(ASR)/2012 2 3. THAT THE DETAILS OF ACTIVITIES CARRIED ON BY THE TRUST HAVE BEEN DULY SUBMITTED AND ARE ON RECORD AND THE SAME HAS N OT BEEN CONSIDERED BY THE AO. 4. THAT CERTAIN WRONG FACTS HAVE BEEN MENTIONED IN THE ORDER. THE TRUST HAS RECEIVED CONTRIBUTION FROM THE TRUSTEE AN D UTILIZED IT FOR CHARITABLE ACTIVITIES. 5. THAT DURING THE PROCEEDINGS ORIGINAL TRUST DEED WAS PRODUCED AND COPY PAN CAR HAVE ALSO BEEN FILED. ACCORDINGLY IT IS PRAYED THAT ORDER OF THE CIT BE Q UASHED AND APPELLANT TRUST MAY BE GRANTED REGISTRATION U/S 12AA OF THE INCOME TAX ACT, 1961. 2. THE ASSESSEE FILED AN APPLICATION UNDER SECTION 12A(1)(AA) IN FORM NO.10A FOR GRANT OF REGISTRATION U/S 12AA OF THE IN COME-TAX ACT, 1961, ON 16.11.2011 IN THE OFFICE OF THE CIT-II, AMRITSAR. T HE APPLICATION FILED BY THE APPELLANT-TRUST WAS ACCOMPANIED WITH PHOTOCOPY OF T HE TRUST DEED WHICH IS AN INSTRUMENT VIDE WHICH THE TRUST HAS BEEN CREATED . ACCORDING TO THE LD. CIT-II, AMRITSAR, THE ASSESSEE HAS NOT FILED A CERT IFIED COPY OF TRUST DEED AS WELL AS NO OTHER DOCUMENTARY EVIDENCE HAS BEEN FI LED BY THE ASSESSEE ALONGWITH THE APPLICATION. THE LD. CIT-II, AMRITSAR , CALLED FOR THE REPORT FROM THE ACIT, CIRCLE-V, AMRITSAR, ABOUT THE GENUIN ENESS OF OBJECTS AND ACTIVITIES OF THE APPELLANT TRUST, WHICH WAS SUBMIT TED ON 10.05.2012. THE LD. CIT-II, AMRITSAR FIXED THE HEARING FOR 23.05.2012 A ND SH. K.R. JAIN, ADVOCATE, APPEARED BEFORE THE LD. CIT AND FILED THE DETAILS. AFTER PERUSING THE SAME, THE LD. CIT-II, AMRITSAR, STATED THAT APP ELLANT TRUST IS REGISTERED ITA NO.278(ASR)/2012 3 WITH SUB-REGISTRAR, AMRITSAR AND THERE ARE ONLY SIX TRUSTEES, NAMELY, S/SH. KULWANT RAI JAIN, BALWANT RAI JAIN, RAJNEESH JAIN, SUNIT JAIN, YOGESH JAIN AND MANOJ JAIN AND ALL TRUSTEES ARE FAMILY MEMBERS. THE LD. CIT-II, AMRITSAR, HAS ALSO REPRODUCED AIMS AND OBJECTS OF THE APPELLANT TRUST AT PAGE 2 (PARA 3) OF HIS ORDER AND FOR THE SAKE OF CONVENI ENCE THE SAME ARE REPRODUCED AS UNDER: I) TO ACQUIRE, ESTABLISH, MANAGE AND MAINTAIN INSTI TUTIONS FOR IMPARTING AND PROMOTING EDUCATION AND LEARNING IN ALL ITS BRANCHES AND FOR GIVING DONATIONS, GRANTS, AIDS TO SUCH EDUCATIONAL INSTITUTIONS. II) TO HELP TO THE DESERVING STUDENTS BY THE WAY O F AWARDS OF SCHOLARSHIPS, GRANTS, AID, PRIZES, MONETARY ASSISTA NCE, SUPPLY OF TEXT BOOKS, CLOTH ETC. AND ALL THE KINDS OF SUCH HE LPS TO THE DESERVING STUDENTS INCLUDING PROVISIONS OF FOOD AND /OR RESIDENCE. III) TO PURCHASE AND DISTRIBUTE LITERATURE FOR CREATING AWARENESS IN ENVIRONMENT ACTIVITIES AND COMMUNITY WELFARE LITERA TURE. IV) IF ANY TRUSTEE DIE OR RETIRE OR BECOME INCAPABLE OR UNFIT TO ACT, THE CONTINUING OR SURVIVING TRUSTEE OR TRUSTEE SHA LL BE ENTITLED TO APPOINT A SUCCESSOR IN THE PLACE OF THE TRUSTEE DYI NG OR RETIRING OR BECOMING INCAPABLE OR UNFIT TO ACT. V) SHOULD ALL THE TRUSTEE DIE OR RETIRE OR BECOME INCA PABLE OR UNFIT TO ACT THE PERSON OR PERSONS NOMINATED BY THEM IN W RITING SHALL BECOMES TRUSTEE. VI) UPON THE APPOINTMENT OF NEW TRUSTEE, THE TRUST ESTA TE SHALL VEST IN THE NEW TRUSTEE JOINTLY WITH THE CONTINUING OR S URVIVING TRUSTEE WITH THE POWERS AND SUBJECT TO THE TRUST H EREBY CREATED. VII) THE TRUSTEE MAY FROM TIME TO TIME FRAME SCHEMES AND RULES AND REGULATIONS FOR CARRYING OUT THE OBJECT OF THE TRUS T AND/OR THE MANAGEMENT AND RUNNING OF THE INSTITUTIONS THAT MAY BE ESTABLISHED, RUN OR AIDED AND FOR REGULATING THE ME ETING OF THE BOARD OF TRUSTEES OR OTHERWISE TO ADD AND/OR ALTER AND/OR VARY THE SAME FROM TIME TO TIME AS THE TRUSTEES MAY THIN K FIT AND PROPER. ITA NO.278(ASR)/2012 4 VIII) TO MAKE THE PROVISIONS FOR AFFORDING MEDICAL RELIEF SUCH AS NURSING, MEDICAL, SURGICAL, OR REMEDIAL ASSISTANCE FOR THE SICK, WOUNDED AND SURGICAL APPLIANCES, MEDICINES, FOOD A ND OTHER COMFORTS OR NECESSITIES AND FOR THAT TO ACQUIRE, ES TABLISH, MANAGE, AID HOSPITALS, CLINICS AND DISPENSARIES, N URSING HOMES, MATERNITY HOMES AND OTHER SUCH INSTITUTIONS AND/OR GIVE DONATIONS THESE OR SIMILAR INSTITUTIONS. 3. THE LD. CIT-II, AMRITSAR, AFTER CONSIDERING THE EVIDENCE PRODUCED BY THE APPELLANT-TRUST WAS OF THE OPINION THAT THE APP ELLANT TRUST HAS NOT BEEN ABLE TO FURNISH ANY WORTHWHILE EVIDENCE TO PROVE T HE CONSIDERABLE ACTIVITY TO ACHIEVE ITS AIMS AND OBJECTS OF THE TRUST. THE L D. CIT-II, AMRITSAR, HAS HELD THAT THE APPELLANT TRUST IS JUST A FAMILY TRUS T OF ONLY ONE FAMILY MEMBERS. MOREOVER, ASSETS AND LIABILITIES STATEMEN T OF M/S. MADAN LAL PURAN DEVI JAIN TRUST REVEALS THAT AS ON 31.03.20 11 AN AMOUNT OF RS.1,00,000/- HAS BEEN SHOWN AS ASSETS WITH HDFC BA NK AS SETTLERS CONTRIBUTION AS CORPUS, BUT AS PER RECORDS, NEITHER THE TRUST HAS OBTAINED THE PERMANENT ACCOUNT NUMBER NOR ANY BANK ACCOUNT OPEN ED IN THE NAME OF TRUST. HE ALSO HELD THAT SETTLERS CONTRIBUTION CAN NOT BE TREATED AS CONTRIBUTION OF THE SETTLER TO THE TRUST. SINCE, NO CORPUS HAS BEEN STANDING IN THE NAME OF TRUST AND THE TRUST CANNOT BE CREATED W ITHOUT ANY ASSET, THEREFORE, THE APPLICATION OF THE APPELLANT TRUST FOR REGISTR ATION U/S 12AA OF THE ACT IS VOID AB INITIO. FINALLY, THE LD. CIT-II, AMRITSAR, REJECTED THE APPLICATION FILED BY THE APPELLANT TRUST FOR REGISTRATION UNDER SECTION 12AA DATED ITA NO.278(ASR)/2012 5 16.11.2011 BY HOLDING THAT APPELLANT TRUST IS UNAB LE TO SATISFY OR TO CONVINCE HIM FOR ITS CHARITABLE FACE AND ITS FORMA TION, VIDE IMPUGNED ORDER DATED 25/28.05.2012. AGGRIEVED BY THE ORDER OF THE LD. CIT-II, AMRITSAR, THE ASSESSEE FILED THE PRESENT APPEAL BEFORE THIS B ENCH. 4. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE, SH. K.R.JAIN, WHO HIMSELF IS A TRUSTEE IN THE PRESENT TRUST, ARGU ED THAT THE APPELLANT TRUST HAD FILED VARIOUS DOCUMENTARY EVIDENCES BEFORE THE LD. ACIT AS WELL AS BEFORE THE LD. CIT-II, AMRITSAR, WHICH HAVE NOT BEEN PROPE RLY CONSIDERED AND APPRECIATED. HE HAS FILED THE PAPER BOOK CONTAINING PAGES 1 TO 41, IN WHICH HE HAS ATTACHED COPY OF TRUST DEED, COPY OF LETTER DAT ED 03-06/02/2012 FROM ACIT, CIR.5, AMRITSAR, COPY OF LETTER DATED 09/02/2 012 ADDRESSED TO ACIT, CIR.5, AMRITSAR, COPY OF LETTER DATED 03.05.2012 AD DRESSED TO ACIT CIR.5, AMRITSAR, COPY OF PAN CARD OF M/S. MADAN LAL PURAN DEVI JAIN TRUST, COPY OF LETTER DATED MAY 10,2012 TO ACIT ALONG WITH STAT EMENT OF AFFAIRS OF THE TRUST AS ON 31.03.2011, COPY OF DETAIL OF INCOME & EXPENDITURE AS ON 01.04.2012 TO 31.03.2012, COPY OF BILL OF FORTIS ES CORT HOSPITAL FOR THE TREATMENT OF POOR PATIENT SH. HARBANS SINGH, COPY O F PAYMENT MADE FOR PURCHASE OF 480 GLASSES FOR DISTRIBUTION TO POOR PE RSONS AND COPY OF APPLICATIONS RECEIVED FROM POOR & DESERVING STUDEN TS FOR EDUCATIONAL SUPPORT DULY RECOMMENDED BY HEAD OF THE INSTITUTIONS. IN AD DITION TO THE SAID PAPER ITA NO.278(ASR)/2012 6 BOOK, HE HAS ALSO FILED COPY OF ORDER OF THE HONBL E ALLAHABAD HIGH COURT IN THE CASE OF FIFTH GENERATION EDUCATION SOCIETY VS. CIT, REPORTED IN (1990) 185 ITR 634 (ALL) AND ALSO THE DECISION OF ITAT, DELHI , IN THE CASE OF, SHRI SAIN JI DHARMARTH TRUST VS. CIT (2006) 8 SOT 446 (DEL) T O SUPPORT HIS CONTENTION AND FURTHER REQUESTED THAT THE IMPUGNED ORDER OF T HE LD. CIT-II, AMRITSAR, MAY BE CANCELLED WITH THE DIRECTION TO THE LD. CIT -II, AMRITSAR TO GRANT REGISTRATION UNDER SECTION 12A(1)(AA) TO THE APPELL ANT TRUST. 5. ON THE CONTRARY, THE LD. DR RELIED UPON THE IMPU GNED ORDER PASSED BY THE LD. CIT-II, AMRITSAR. HE FURTHER STATED THAT AL L THE TRUSTEES ARE FAMILY MEMBERS MEANING THEREBY APPELLANT TRUST IS A FAMILY TRUST. SECONDLY, HE ALSO STATED THAT KEEPING IN VIEW THE POWERS OF THE TRUST EES, AS MENTIONED IN THE OBJECTS OF THE APPELLANT TRUST, ALL POWERS HAVE BEE N GIVEN TO THE TRUSTEES, WHICH IS A FAMILY TRUST AND INVESTMENT MADE IN THE TRUST CAN BE USED FOR THEIR BENEFIT AND THE TRUST IS NOT ENTITLED FOR REG ISTRATION AS REQUESTED. THE LD. DR DREW OUR ATTENTION TOWARDS PARA 7 OF THE DEED AN D STATED THAT ALL POWERS HAVE BEEN GIVEN TO THE TRUSTEES TO USE THE FUNDS OF THE TRUST IN ANY MANNER AS THEY LIKE, WHICH IS NOT PERMISSIBLE UNDER THE LA W. IN SUPPORT OF HIS CONTENTION, THE LD. DR RELIED UPON THE ORDER PASSED BY THE ITAT, DELHI E BENCH IN THE CASE OF SHANTI DEVI EDUCATIONAL TRUST , 315-L, MODEL TOWN, ITA NO.278(ASR)/2012 7 REWARI VS. CIT, AAYAKAR BHAWAN, OPP. MANSROVER PARK , ROHTAK, PASSED IN ITA NO. 4439/DEL/2010 DATED 29.02.2012. 6. AFTER HEARING BOTH THE PARTIES AND PERUSING THE RELEVANT MATERIAL AVAILABLE WITH US, ESPECIALLY THE PAPER BOOK FILED BY SH. K.R. JAIN, ADVOCATE ALONGWITH CITATIONS CITED BY BOTH THE PARTIES AS WE LL AS THE IMPUGNED ORDER PASSED BY THE LD. CIT-II, AMRITSAR, WE ARE OF THE C ONSIDERED OPINION THAT THE LD. CIT-II, AMRITSAR, HAS PASSED THE IMPUGNED ORDER WITHOUT COMMENTING UPON THE EVIDENCES FILED BY THE APPELLANT TRUST, WH ICH THE APPELLANT HAS FILED IN THE SHAPE OF PAPER BOOK CONTAINING PAGES 1 TO 41 . KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT THE LD. CIT-II, AMRITSAR, HAS PASSED THE IMPUGNED ORDER AGAINST THE ASSESSEE WITHOUT APPRECIATING OR CONSIDERING THE DOCUMENTARY EVIDENC E FILED BY THE ASSESSEE BEFORE HIM. WE ARE NOT COMMENTING UPON THE MERIT OF THE CASE AND WE ARE ALSO NOT APPRECIATING THE EVIDENCE FILED BY THE APP ELLANT TRUST, WHICH IS IN THE SHAPE OF PAPER BOOK CONTAINING PAGES 1 TO 41 ALONGW ITH CITATIONS CITED BY THE LD. COUNSEL FOR THE ASSESSEE AS WELL AS ONE CI TATION CITED BY THE LD. DR, AS MENTIONED HEREINABOVE. BUT IN THE INTEREST OF JU STICE, WE ARE OF THE CONSIDERED OPINION THAT THE ISSUE IN DISPUTE REQUIR ES RE-CONSIDERATION BY THE LD. CIT-II, AMRITSAR, IN VIEW OF THE DOCUMENTARY EV IDENCES FILED BY THE ASSESSEE IN THE SHAPE OF PAPER BOOK MENTIONED ABOVE . THEREFORE, IN THE ITA NO.278(ASR)/2012 8 INTEREST OF JUSTICE, WE ARE SETTING ASIDE THE ISSUE IN DISPUTE TO THE FILE OF THE LD. CIT-II, AMRITSAR, TO PASS A SPEAKING ORDER ON T HE ISSUE IN DISPUTE AFTER CONSIDERING THE EVIDENCES FILED BY THE ASSESSEE ALO NGWITH TWO DECISIONS RENDERED BY THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF FIFTH GENERATION EDUCATION SOCIETY VS. CIT, REPORTED IN ( 1990) 185 ITR 634 (ALL) AND ITAT, DELHI, IN THE CASE OF, SHRI SAIN JI DHARM ARTH TRUST VS. CIT (2006) 8 SOT 446 (DEL) AS WELL AS DECISION OF ITAT, DELHI E BENCH, RELIED UPON BY THE LD. DR, IN THE CASE OF SHANTI DEVI EDUCATI ONAL TRUST, 315-L, MODEWL TOWN, REWARI VS. CIT, AAYAKAR BHAWAN, OPP. M ANSROVER PARK, ROHTAK, PASSED IN ITA NO. 4439/DEL/2010 DATED 29.02 .2012. ACCORDINGLY, WE SET ASIDE THE MATTER TO THE FILE OF THE LD. CIT- II, AMRITSAR, WITH THE DIRECTION TO DECIDE THE SAME AFRESH, AS INDICATED A BOVE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IN ITA NO.278(ASR)/2012 IS ALLOWED FOR STATISTICAL PURPOSE S, AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 21ST AUGUST, 2012. (B.P. JAIN) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 21 ST AUGUST, 2012 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:M/S. MADAN LAL PURAN DEVI JAIN TRUST, AMRITSAR. 2. THE ITO CIR.II, AMRITSAR. 3. THE CIT(A), ASR. 4. THE CIT, ASR.