Rama Laxmi Charitable Trust, Sindhudurg V. Commissioner of Income-tax, (Exemptions), Pune

ITA 3026/PUN/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 3084 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-11-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 19-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHEKHAR L GAJBHIYE
• Keywords: Charitable institution; Opportunity of being heard; Set aside
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE (THROUGH VIRTUAL COURT) BEFORE SHRI INTURI RAMA RAO, AM AND SHRI S. S. VISWANETHRA RAVI, JM . / ITA NO.3026/PUN/2017 RAMA LAXMI CHARITABLE TRUST, SATARDA, TAL: SAWANTWADI, DIST: SINDHUDURG- 416514. PAN : AACTR1329R ....... / APPELLANT / V/S. CIT (EXEMPTIONS), PUNE. / RESPONDENT ASSESSEE BY : SHRI PRAMOD SHINGTE REVENUE BY : SHRI SHEKHAR L. GAJBHIYE / DATE OF HEARING : 03.11.2020 / DATE OF PRONOUNCEMENT : 03.11.2020 / ORDER PER INTURI RAMA RAO, AM: THIS IS AN APPEAL FILED BY THE ASSESSEE TRUST DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (EXEMPTIONS), PUNE DATED 23.10.2017 PASSED U/S 12AA(1)(B)(II) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) DENYING THE REGISTRATION U/S 12AA OF THE ACT. 2. THE APPELLANT SOCIETY RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. ON THE FACTS OF THE CASE AND IN LAW THE LD CIT ERRED IN REJECTING THE APPLICATION OF THE APPELLANT FOR REGISTRATION U/S 12AA OF THE INCOME TAX ACT, 1961 ON THE GROUNDS: A. OF NON SUBMISSION OF ORIGINAL TRUST DEEDS AND REGISTRATION UNDER THE BPT ACT. B. OF NON SUBMISSION OF PROOF OF CHARITABLE ACTIVITIES CARRIED OUT. C. ABSENCE OF DISSOLUTION CLAUSE IN THE TRUST DEED. THE ABOVE BEING NOT THE REQUIREMENTS FOR GRANTING REGISTRATION U/S 12AA THE APPELLANT PRAYS THAT THE CIT BE DIRECTED TO GRANT REGISTRATION AS APPLIED. 2 ITA NO.3026/PUN/2017 THE APPELLANT CRAVES LEAVE TO ADD TO, AMEND, ALTER OR MODIFY THE ABOVE GROUND BEFORE OR AT THE TIME OF HEARING. 3. THE BRIEF FACTS OF THE CASE ARE AS UNDER :- THE APPELLANT SOCIETY IS REGISTERED UNDER THE BOMBAY PUBLIC TRUST ACT, 1950 WAS ESTABLISHED VIDE THE TRUST DEED DATED 12.03.2009. THE APPELLANT SOCIETY FILED AN APPLICATION FOR REGISTRATION U/S 12AA OF THE ACT IN FORM 10A ON 07.04.2017. THE SAID APPLICATION WAS REJECTED VIDE ORDER DATED 23.10.2017 BY THE LD. COMMISSIONER OF INCOME TAX (EXEMPTIONS), PUNE CITING THAT THE APPELLANT SOCIETY HAD NOT PRODUCED THE ORIGINAL INSTRUMENT CREATING THE TRUST AND THE REGISTRATION DETAILS UNDER THE BOMBAY PUBLIC TRUST ACT NO PROOF IN SUPPORT OF THE ACTIVITIES CARRIED OUT BY THE TRUST WERE FURNISHED AND THE TRUST DEED DOES NOT CONTAIN THE DISSOLUTION CLAUSE. IN THE ABSENCE OF THESE DETAILS, THE LD. COMMISSIONER OF INCOME TAX (EXEMPTIONS) OBSERVED THAT THE GENUINENESS OF THE ACTIVITIES OF THE TRUST WERE NOT ESTABLISHED, ACCORDINGLY, HE DENIED THE REGISTRATION U/S 12AA OF THE ACT. 4. BEING AGGRIEVED BY THE ORDER OF LD. COMMISSIONER OF INCOME TAX (EXEMPTIONS), THE APPELLANT SOCIETY IS BEFORE US IN THE PRESENT APPEAL. 5. BEFORE US, IT IS SUBMITTED THAT THE DETAILS CALLED FOR BY THE LD. COMMISSIONER OF INCOME TAX (EXEMPTIONS) WERE DULY FURNISHED ALONG WITH THE AUDITED ACCOUNTS FOR THE LAST THREE YEARS. IT WAS FURTHER SUBMITTED THAT THE REASONS CITED FOR DENIAL OF REGISTRATION ARE NO LONGER TENABLE IN LAW FOR THE REASON THAT THE DISSOLUTION CLAUSE IS NOT A PREREQUISITE CONDITION FOR GRANT OF REGISTRATION AS HELD BY THE HONBLE GUJARAT HIGH COURT IN THE CASES OF (I) DCIT VS. VANCHHARA THIRTHADHIPATI CHINTAMANI PARASWAPRWABHU, 233 TAXMAN 01 (GUJ.) AND (II) CIT VS. TAAPAGACHHA SANGH MOTA, 232 TAXMAN 715 (GUJ.). IT IS FURTHER SUBMITTED THAT SINCE THE APPELLANT SOCIETY HAD FILED THE REQUISITE INFORMATION AS CALLED FOR BY THE LD. COMMISSIONER OF INCOME TAX 3 ITA NO.3026/PUN/2017 (EXEMPTIONS), THE LD. COMMISSIONER OF INCOME TAX (EXEMPTIONS) MAY BE DIRECTED TO GRANT THE REGISTRATION U/S 12AA OF THE ACT. 6. ON THE OTHER HAND, LD. CIT-DR VEHEMENTLY OPPOSED THE SUBMISSIONS MADE BY THE LD. AR FOR THE APPELLANT SOCIETY AND SUBMITTED THAT IN THE ABSENCE OF REQUISITE DETAILS, THE LD. COMMISSIONER OF INCOME TAX (EXEMPTIONS) CANNOT COME TO A CONCLUSION AS TO THE GENUINENESS OF THE TRUST AND, THEREFORE, HE JUSTIFIED DENYING THE REGISTRATION U/S 12AA OF THE ACT. 7. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ONLY ISSUE INVOLVED IN THE PRESENT APPEAL RELATES TO THE GRANT OF REGISTRATION U/S 12AA OF THE ACT. THE LD. COMMISSIONER OF INCOME TAX (EXEMPTIONS) HAD DENIED THE REGISTRATION U/S 12AA OF THE ACT PRIMARILY ON THE GROUND THAT THE APPELLANT SOCIETY HAD FAILED TO FURNISH THE DETAILS AS CALLED FOR BY HIM VIDE ORDER DATED 07 TH JUNE, 2017 SO AS TO ENABLE HIM TO FORM AN OPINION AS TO THE GENUINENESS OR OTHERWISE OF ACTIVITIES OF THE TRUST. FROM THE PERUSAL OF THE IMPUGNED ORDER, IT IS CLEAR THAT THE LD. COMMISSIONER OF INCOME TAX (EXEMPTIONS) HAD GIVEN ONLY 3 OPPORTUNITIES OF HEARING TO THE APPELLANT SOCIETY. FURTHER, THE LD. AR FOR THE APPELLANT SOCIETY DISPUTED THE FINDING OF THE LD. COMMISSIONER OF INCOME TAX (EXEMPTIONS) THAT NO INFORMATION WAS FILED. HOWEVER, THE REASONING OF THE LD. COMMISSIONER OF INCOME TAX (EXEMPTIONS) THAT NO ACTIVITIES WERE CARRIED OUT IN THE LAST 3 FINANCIAL YEARS FOR WANT OF DETAILS OF REGISTRATION UNDER BOMBAY PUBLIC TRUST ACT AND THE ORIGINAL INSTRUMENT CREATING THE TRUST ARE ONLY TECHNICAL BREACH OF PROCEDURE, WHICH CANNOT COME INTO WAY OF RENDERING SUBSTANTIAL JUSTICE IN THE MATTER. FURTHER, THE FACT THAT IN THE ABSENCE OF DISSOLUTION CLAUSE IN TRUST DEED ALSO DOES NOT DISENTITLE THE ASSESSEE FOR REGISTRATION THE TRUST U/S 12AA OF THE ACT IN VIEW OF THE JUDGMENT OF THE HONBLE GUJARAT HIGH COURT IN THE CASES OF (I) DCIT VS. VANCHHARA THIRTHADHIPATI CHINTAMANI PARASWAPRWABHU (SUPRA) 4 ITA NO.3026/PUN/2017 AND (II) CIT VS. TAAPAGACHHA SANGH MOTA (SUPRA). FURTHER, RECENTLY THE HONBLE SUPREME COURT IN THE CASE OF M/S. ANANDA SOCIAL AND EDUCATIONAL TRUST VS. CIT IN CIVIL APPEAL NO.1727/2020 (@SLP (C) NO.25761/2015) DATED 19.02.2020 HELD THAT THE MERE FACT THAT THE ASSESSEE TRUST HAS NOT CARRIED OUT ANY ACTIVITIES CANNOT BE THE VALID REASON FOR DENIAL OF REGISTRATION U/S 12AA OF THE ACT. 8. IN THE LIGHT OF THE ABOVE LEGAL POSITION DISCUSSED SUPRA, WE ARE OF THE CONSIDERED OPINION THAT THE MATTER REQUIRES REMAND BACK TO THE FILE OF THE LD. COMMISSIONER OF INCOME TAX (EXEMPTIONS) FOR FRESH ADJUDICATION KEEPING IN VIEW THE LEGAL POSITION DISCUSSED ABOVE AFTER AFFORDING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE APPELLANT SOCIETY. ACCORDINGLY, THE MATTER IS SET ASIDE TO THE FILE OF THE LD. COMMISSIONER OF INCOME TAX (EXEMPTIONS) FOR FRESH ADJUDICATION. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 03 RD DAY OF NOVEMBER, 2020. SD/- SD/- (S. S. VISWANETHRA RAVI) (INTURI RAMA RAO) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / PUNE; / DATED : 03 RD NOVEMBER, 2020. SUJEET / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT (EXEMPTIONS), PUNE. 4 . , , , / DR, ITAT, A BENCH, PUNE. 5. / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE.