Shri Satyanarayan Mandir, V. The Director of Income Tax (Exemption), Ahmedabad

ITA 300/RJT/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 72647 (ITAT-RAJKOT)
• Duration Of Justice: 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 10-12-2013
• Assessment Year: misc
• Appeal Filed On: 24-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR M L MEENA
• Assessee Lawyers: FALGUNI SHAH
• Keywords: Charitable institution
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBULAL, SMC BENCH, RAJKOT BEFORE SHRI T. K. SHARMA, JM ITA NO. 300/RJT/2013 SHRI SATYNARAYAN MANDIR, PATDI SHRI LALJI MAHARAJ NI JAGYA AT & POST SAYLA, DIST. SURENDRANAGAR PAN : AAJTS 2922 A ( / APPELLANT) DIRECTOR OF INCOME-TAX (EXEMPTIONS), AHMEDABAD / RESPONDENT / ASSESSEE BY SMT FALGUNI SHAH, CA / REVENUE BY DR M L MEENA, CIT-DR / DATE OF HEARING 10.12.2013 !'# / DATE OF PRONOUNCEMENT 13.12.2013 / ORDER THIS APPEAL BY THE ASSESSEE-TRUST IS AGAINST THE OR DER DATED 14.05.2013 OF DIRECTOR OF INCOME-TAX (EXEMPTIONS), AHMEDABAD REJE CTING THE APPLICATION OF THE ASSESSEE-TRUST FOR REGISTRATION U/S 12AA OF THE INC OME-TAX ACT, 1961. 2. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE-TRUST APPLIED FOR REGISTRATION U/S 12AA OF THE INCOME-TAX ACT ON 03.12.2012. IN THE IMPUGNE D ORDER THE LD. DIRECTOR OF INCOME-TAX (EXEMPTIONS), AHMEDABAD REJECTED THE APP LICATION OF THE ASSESSEE-TRUST FOR THE DETAILED REASON GIVEN IN PARAGRAPH NO.3, WH ICH 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 QUERY LE TTER ISSUED ON 26.12.2012 AND SUBSEQUENT REMINDER ISSUED ON 29.01.2013, THE A SSESSEE HAS FILED THE REPLY ON 13.02.2013 AND IT IS CLEARLY WRITTEN THAT THERE IS NO TRUST DEED. ONLY THE COPY OF PUBLIC TRUST SCHEDULE-1/PUBLIC TRUST RE GISTER IS FURNISHED AS EVIDENCE OF THE ESTABLISHMENT AND OBJECTS OF THE TR UST. AS PER I.T. RULES IN FORM 10A CLOSE 5(1) SAYS THAT CERTIFIED COPY OF THE INSTRUMENT UNDER WHICH THE TRUST WAS CREATED / ESTABLISHED TOGETHER WITH THE C OPY OF MUST BE ENCLOSED WITH THE APPLICATION FOR REGISTRATION, EVIDENCING T HE CREATION OF THE TRUST OR ESTABLISHMENT OF THE TRUST. THERE MUST BE WRITTEN I NSTRUMENT BY WAY OF WHICH THE TRUST OR INSTITUTION IS CREATED/ESTABLISHED FRO M WHICH ITS OBJECTS CAN BE SEEN. IN VIEW OF THIS FACT THE APPLICATION FOR REGI STRATION U/S 12AA IS LIABLE TO BE REJECTED AS EVEN ITS OBJECTS CANNOT BE VERIFIED AS REQUIRED BY SECTION 12AA(1). AGGRIEVED WITH THE ORDER OF LD. DIRECTOR OF INCOME -TAX (EXEMPTIONS), AHMEDABAD, THE ASSESSEE-TRUST IS NOW IN APPEAL BEFO RE THIS TRIBUNAL ON THE FOLLOWING GROUNDS:- 2 300-RJT-2013 ` SHRI SATYANARAYAN MANDIR, PATDI (SMC) 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LEARNED CIT IS NOT JUSTIFIED IN LAW IN HOLDING THAT THE ASSESSEE I S NOT ELIGIBLE FOR REGISTRATION IN THE LIGHT OF THE FACT THAT THE ASSESSEE TRUST DOES FULFILL THE REQUIREMENT OF BEIGN A CHARITABLE INSTITUTION AND DESERVES TO BE REGISTE RED U/S 12A(A) OF THE I.T. ACT, 1961. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LEARNED CIT IS NOT JUSTIFIED IN LAW IN NOT TAKING INTO CONSIDERATION T HE SUBMISSION, EXPLANATION AND DOCUMENTS MADE BY THE APPELLANT DURING THE COURSE O F HEARING AND CONSEQUENTLY ERRED ON LAW AS WELL AS ON FACTS IN RE FUSING YOUR APPELLANT TO GRANT THE REGISTRATION. 3. ON THE FACT AND IN THE CIRCUMSTANCES OF THE CASE , THE LEARNED CIT ERRED ON LAW IN DISMISSING THE APPLICATION FOR REGISTRATI ON U/S 12AA OF THE INCOME TAX ACT, 1961 ONLY ON THE GROUND OF THE TRUST DID N OT HAVE ANY WRITTEN INSTRUMENT BY WAY OF WHICH THE TRUST IS CREATED THE ACTION OF REJECTING THE APPLICATION OF YOUR APPELLANT BEING ARBITRARY AND A GAINST THE PRINCIPLES OF LAW. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT HAS PASSED THE ORDER IN HASTE WITHOUT APPRECIATING IN P ROPER PERSPECTIVE THE FACTS AND CIRCUMSTANCES OF THE CASE AND EXPLANATION OFFER ED AGAINST THE FACTS, LAW AND PROVISIONS OF THE INCOME TAX 1961 AND RULES MAD E THERE UNDER. 3. AT THE TIME OF HEARING, ON BEHALF OF THE ASSESSE E-TRUST, SMT. FALGUNI SHAH, CA APPEARED AND POINTED OUT THAT THE ASSESSEE-TRUST IS A RELIGIOUS TEMPLE, ESTABLISHED LONG BACK AND REGISTERED WITH CHARITY COMMISSIONER, RAJKOT ON 30.07.1976 VIDE REGISTRATION NO.A/994/SURENDRANAGAR. THE TRUST IS IRREVOCABLE SINCE IT IS REGISTERED WITH CHARITY COMMISSIONER OF GUJARAT AND ITS PROPER TY CANNOT BE VESTED BY TRUSTEES. IN SUPPORT OF THIS, THE LD. COUNSEL OF THE ASSESSEE -TRUST PRODUCED A COPY OF THE PUBLIC TRUST SCHEDULE 1 EVIDENCING THE ESTABLISHMENT & OBJ ECT OF THE TRUST. SHE FAIRLY ADMITTED THAT THERE IS NO TRUST DEED AND THE TRUST IS VERY OLD AND ITS PROPERTY IS TEMPLE BUILDING ONLY (INCLUDING ITS RENOVATION). CONTINUIN G HER ARGUMENTS, THE LD. COUNSEL OF THE ASSESSEE-TRUST POINTED OUT THAT THE DIRECTOR OF INCOME-TAX (EXEMPTIONS), AHMEDABAD IS NOT JUSTIFIED IN LAW IN HOLDING THAT T HE ASSESSEE-TRUST IS NOT ELIGIBLE FOR REGISTRATION ON THE GROUND THAT THERE IS NO TRUST D EED OR WRITTEN DOCUMENTS TO PROVE THE CREATION OF THE TRUST. IN SUPPORT OF THIS, SHE RELIED UPON THE JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT V. PROMOD JAIN TRUST, [1971] 81 ITR 604 (DELHI), WHEREIN IT WAS HELD THAT NO FORMAL DOCUMENT OR OTHER WRITING IS NECESSARY T O CREATE A CHARITABLE OR RELIGIOUS TRUST. SUCH A TRUS T MAY BE CREATED BY WORDS AS SHOW AN INTENTION TO CREATE A CHARITABLE OR RELIGIO US TRUST. IF THAT INTENTION IS ACCOMPANIED WITH OR FOLLOWED BY A FORMAL DIVESTING OF THE OWNERSHIP OF THE PROPERTY ON THE PART OF THE DONOR AND VESTING THE S AME IN ANY PERSON OR EVEN 3 300-RJT-2013 ` SHRI SATYANARAYAN MANDIR, PATDI (SMC) IN THE DONOR HIMSELF AS TRUSTEE, THE DEDICATION IS COMPLETE. SHE FURTHER POINTED OUT THAT THE OBJECTS OF THE TRUST IS CLEARLY MENTIO NED AS RELIGIOUS LECTURES AND WORSHIP OF DEITY IN COLUMN NO.5 OF SCHEDULE 1 OF CHARITY OF FICE ENTRY. REGISTRATION WITH REGULATORY AUTHORITY I.E. CHARITY COMMISSIONER, GUJ ARAT ITSELF IS EVIDENCE OF ITS ESTABLISHMENT. THE LD. COUNSEL OF THE ASSESSEE FURTHER POINTED O UT THAT IN CASE OF DEDICATION TO A PUBLIC TRUST, WHAT IS ESSENTIAL IS THAT THERE SHOULD BE AN UNAMBIGUOUS EXPRESSION OF INTENTION TO DIVEST AND AN ACTUAL DIV ESTMENT OF THE INTEREST OF THE DONOR FOR THE BENEFIT OF THE CHARITY. SUCH DIVESTITURE CA N BE PROVED BY A WRITTEN DOCUMENTS OR BY OTHER EVIDENCE AS IT IS NOT NECESSARY THAT TH ERE SHOULD BE A WRITING CONSTITUTE A VALID DEDICATION. VIDE REFERENCE IN CASE OF JAI NAR AYAN JAI GOVIND V. CONTROLLER OF E.D. (1963) 49 ITR (ED) 105, 117 (MAD) AND ALSO IN THE CASE OF RAM KUMAR RAM CHANDRA & CO. V. CIT (1965) 58 ITR 721, 726 (AII). THE LD. COUNSEL OF THE ASSESSEE ALSO POINTED OUT THAT WHILE PASSING THE IMPUGNED OR DER, THE LD. DIRECTOR OF INCOME- TAX (EXEMPTIONS) HAS NOT CONSIDERED THE REPLY DATED 11.02.2013 OF THE ASSESSEE- TRUST. FOR REGISTRATION U/S 12AA OF THE INCOME-TAX ACT IT SELF MENTIONED THE CONDITION TO BE SATISFIED IS AS EITHER TRUST DEED OR ANY OTHER WRITTEN DOCUMENTS IS NECESSARY TO PROVE THE CREATION OF TRUST ITS OBJECT AND ITS GENUINENESS OF THE ACTIVITIES. ALL EVIDENCES OF ITS ESTABLISHMENT ARE SHOWN IN SCH EDULE 1 OF CHARITY COMMISSIONER RECORDS. THE LD. COUNSEL OF THE ASSESSEE-TRUST ALSO SUBMITT ED THAT IT HAD ALREADY MADE AN APPLICATION TO CHARITY COMMISSI ONERS OFFICE ON 19.11.2013 REQUESTING TO SUPPLY COPY OF ITS APPLICATION OF REG ISTRATION OF TRUST (FORM SCHEDULE 2G) ALONGWITH ALL SUPPORTING DOCUMENTS. TO SUM-UP, THE LD. COUNSEL OF THE ASSESSEE CONCLUDED THAT ON THE BASIS OF DOCUMENTS ALREADY FU RNISHED, THE GENUINENESS OF THE CREATION OF TRUST IS PROVED AND KEEPING IN VIEW OF ITS OBJECTS, THE LD. DIRECTOR OF INCOME-TAX (EXEMPTIONS) BE DIRECTED TO ALLOW THE RE GISTRATION U/S 12AA OF THE INCOME-TAX ACT, 1961. 4. ON THE OTHER HAND, SHRI M.L. MEENA, CIT-DR, APPE ARED ON BEHALF OF THE REVENUE VEHEMENTLY SUPPORTED THE ORDER OF LD. DIREC TOR OF INCOME-TAX (EXEMPTIONS). THE LD. DEPARTMENTAL REPRESENTATIVE POINTED OUT THA T AS PER INCOME-TAX RULES IN FORM 10A CLAUSE 5(1) IT IS CLEARLY PROVIDED CERTIFI ED COPY OF THE INSTRUMENT UNDER WHICH THE TRUST WAS CREATED / ESTABLISHED TOGETHER WITH THE COPY OF IT MUST BE 4 300-RJT-2013 ` SHRI SATYANARAYAN MANDIR, PATDI (SMC) ENCLOSED WITH THE APPLICATION FOR REGISTRATION EVID ENCING THE CREATION OF THE TRUST OR ESTABLISHMENT OF THE TRUST. SINCE THE ASSESSEE-TRU ST HAS NOT FILED WRITTEN INSTRUMENT BY WAY OF WHICH THE TRUST OR INSTITUTION IS CREATED /ESTABLISHED FROM WHICH THE ITS OBJECTS CAN BE SEEN, THE ORDER OF LD. DIRECTOR OF I NCOME-TAX (EXEMPTIONS) REJECTING THE APPLICATION U/S 12AA BE UPHELD. 5. AFTER HEARING BOTH THE SIDES, I HAVE CAREFULLY G ONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE SCHEDULE 1 OF THE PUBLIC TR UST REGISTER WHICH IS FURNISHED BY THE ASSESSEE-TRUST BEFORE THE LD. DIRECTOR OF INCOM E-TAX (EXEMPTIONS) CLEARLY PROVIDED THE DETAILS OF THE NAME OF THE TRUST, NAME OF THE MANAGER/TRUSTEE, OBJECT OF THE TRUST, BASIS CONSIDERED FOR THE REGISTRATION WI TH THE CHARITY COMMISSIONER , SARSARARI INCOME, SARSARARI EXPENSE ETC. THE REGIST RATION WITH THE CHARITY COMMISSIONER OF THE ASSESSEE-TRUST HAS BEEN DONE ON THE FOLLOWING GROUNDS:- I) OBJECT OF THE TRUST : THE MAIN OBJECT OF THE TRU ST IS DHARMIK UPDESH AND DARSAN (RELIGIOUS TEACHING AND WORSHIP) II) PAPERS OF THE TEMPLE PROPERTY HAD BEEN SUBMITTE D AS DOCUMENT OF THE TRUST. III) NAME OF THE TRUSTEES IV) DETAILS OF THE IMMOVABLE AND MOVABLE PROPERTIES (JUNGAM MILKAT / SATVER MILKAT). FROM THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE- TRUST, IT CAN BE SEEN THAT NOW THE ASSESSEE-TRUST MADE AN APPLICATION DATED 14 .11.2013 TO THE CHARITY COMMISSIONERS OFFICER (WHICH WAS RECEIVED ON 19.11 .2013), FOR SUPPLYING THE COPY OF APPLICATION OF REGISTRATION OF TRUST (FORM SCHED ULE 2G) ALONGWITH SUPPORTING DOCUMENTS. THE COPY OF APPLICATION FOR REGISTRATION FILED WITH ASSESSEE-TRUST IN SCHEDULE 2G IS PLACED ON RECORD. REGISTRATION WITH THE CHARITY COMMISSIONER IS ITSELF A EVIDENCE FOR THE GENUINENESS OF THE ESTABL ISHMENT AND OBJECT OF THE TRUST. UNDER THE BOMBAY PUBLIC TRUST ACT, THE CHARITY COM MISSIONER IS THE CONTROLLER OF THE TRUSTS. THE OFFICER OF THE CHARITY COMMISSI ONER HAS BEEN GIVEN THE POWERS OF SUPERVISION, REGULATION AND CONTROL OF PUBLIC TRUST S. IT IS COMPULSORY FOR EVERY PUBLIC TRUST TO REGISTER WITH THE CHARITY COMMISSIONER SO AS TO ENSURE PROPER ADMINISTRATION AND MANAGEMENT. THE HONBLE DELHI HIGH COURT IN TH E CASE OF CIT V. PROMOD JAIN TRUST, [1971] 81 ITR 604 (DELHI), IT WAS HELD THAT NO FORMAL DOCUMENT OR OTHER WRITING 5 300-RJT-2013 ` SHRI SATYANARAYAN MANDIR, PATDI (SMC) IS NECESSARY TO CREATE A CHARITABLE OR RELIGIOUS TR UST. SUCH A TRUST MAY BE CREATED BY WORDS AS SHOW AN INTENTION TO CREATE A CHARITABLE O R RELIGIOUS TRUST. IN THIS VIEW OF THE MATTER, I AM OF THE OPINION THAT SCHEDULE 1 OF THE PUBLIC TRUST REGISTER, THE REGISTRATION WITH THE REGULATORY AUTHORITY I.E. CH ARITY COMMISSIONER ITSELF IS SUFFICIENT EVIDENCE FOR THE CREATION OF THE TRUST. THEREFORE, THE ISSUE OF REGISTRATION U/S 12AA OF THE INCOME-TAX ACT IS SENT BACK TO THE FILE OF THE LD. DIRECTOR OF INCOME-TAX (EXEMPTIONS) WITH THE DIRECTION THAT HE WILL CONSID ER THE APPLICATION OF THE ASSESSEE- TRUST FOR REGISTRATION U/S 12AA ON THE BASIS OF ENT RY MADE IN SCHEDULE 1 OF THE PUBLIC TRUST REGISTER WITH CHARITY COMMISSIONER WHICH CONT AINS THE NECESSARY PARTICULARS. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER PRONOUNCED IN OPEN COURT ON THE DATE MEN TIONED HEREINABOVE. SD/- ( $.. &' / T. K. SHARMA) ( ) /JUDICIAL MEMBER *)& +) ,/ ORDER DATE: 13.12.2013 !$ /RAJKOT *BT / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT- SHRI SATYNARAYAN MANDIR, PATDI, SHRI LALJI MAHARAJ NI JAGYA AT & POST SAYLA, DIST. SURENDRANAGAR 2. / RESPONDENT- DIRECTOR OF INCOME-TAX (EXEMPTIONS), AHMEDABAD 3. ADDL. DIT (EXEMPTION), AHMEDABAD 4 . 012 3, * 3#, !$ / DR, ITAT, RAJKOT 5 . 25 67 / GUARD FILE *)& / BY ORDER TRUE COPY PRIVATE SECRETARY, ITAT, RAJKOT