Sri Shantinathji Bhagwan Jain Swethambar Temple Trust, CHENNAI V. DIT, CHENNAI

ITA 3079/CHNY/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 95903 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 24-06-2015
• Assessment Year: misc
• Appeal Filed On: 18-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR U ANJANEYALU
• Assessee Lawyers: D ANAND
• Keywords: Procedural lapse
• Section: 12AA

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , B B ENCH, CHENNAI . , ' $ , % ' BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ./ I.T.A.NO . 3079/MDS/2014 SRI SHANTINATHJI BHAGWAN JAIN, SWETAMBAR TEMPLE TRUST, 404, T.H.ROAD, CHENNAI-600 021. VS. DIRECTOR OF INCOME TAX (EXEMPTIONS), 121, M.R.ROAD, CHENNAI-34. PAN:AAHTS7683Q ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. D.ANAND, ADVOCATE /RESPONDENT BY : DR.U.ANJANEYALU CIT /DATE OF HEARING : 24 TH JUNE, 2015 /DATE OF PRONOUNCEMENT : 19 TH AUGUST, 2015 / O R D E R PER CHALLA NAGENDRA PRASAD, JM: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE OF THE DIRECTOR OF INCOME TAX (EXEMPTIONS), CHE NNAI DATED 30.09.2014 IN DENYING THE REGISTRATION UNDER SECTION 12AA OF THE ACT. 2. COUNSEL FOR THE ASSESSEE SUBMITS THAT DIRECTOR O F INCOME TAX (EXEMPTIONS) DENIED THE REGISTRATION TO THE ASSESSEE TRUST HOLDING THAT TRUST IS NOT A VALID TR UST AS THERE IS NO AUTHOR / FOUNDER IS AS PER ORIGINAL TRUST DEED. COUNSEL FOR 2 ITA NO.3079/MDS/2014 THE ASSESSEE FURTHER SUBMITS THAT DIRECTOR OF INCOM E TAX (EXEMPTIONS) WAS OF THE VIEW THAT EVEN THE AMENDED TRUST DEED TRUSTEES CANNOT APPOINT FOUNDER BY UNREGISTERE D AMENDED DEED AND THEREFORE, TRUST IS A INVALID TRUS T. COUNSEL FOR THE ASSESSEE REFERRING TO PARA 13 OF THE ORDER SUBMITS THAT DIRECTOR OF INCOME TAX (EXEMPTIONS) WAS UNDER MISTA KEN IMPRESSION THAT THERE IS NO AUTHOR OR FOUNDER, WHEN IN FACT THE TRUST DEED CLEARLY SAYS THAT TRUSTEES ARE AUTHORS O F TRUST AND THEREFORE THE OBSERVATION OF THE DIRECTOR OF INCOME TAX (EXEMPTIONS) THAT THERE IS NO AUTHOR OR FOUNDER IS NOT TRUE. HE FURTHER SUBMITS THAT THIS DEED WAS REGISTERED DEED AND ASSESSEE TRUST IS A VALID TRUST. THEREFORE, COUNSE L SUBMITS THAT DIRECTOR OF INCOME TAX (EXEMPTIONS) WENT WRONG IN ASSUMING THAT THERE IS NO FOUNDER TRUST TO THE ASSE SSEE TRUST. HE FURTHER SUBMITS THAT AT THE TIME OF REGISTRATION WHAT HAS TO BE SEEN IS ONLY GENUINENESS OF THE TRUST AND SINCE THE TRUST IS A GENUINE REGISTERED TRUST, DIRECTOR OF INCOME TAX (EXEMPTIONS) IS NOT JUSTIFIED IN REJECTING THE REGI STRATION UNDER SECTION 12AA OF THE ACT. 3 ITA NO.3079/MDS/2014 3. DEPARTMENTAL REPRESENTATIVE SUPPORTS THE ORDER O F THE DIRECTOR OF INCOME TAX (EXEMPTIONS) IN REFUSING R EGISTRATION TO THE ASSESSEE TRUST. 4. HEARD BOTH SIDES. ON A READING OF THE ORDER OF D IRECTOR OF INCOME TAX (EXEMPTIONS) , IT IS CLEAR THAT DIT(E XEMPTIONS) REFUSED REGISTRATION MAINLY FOR THE REASON THAT IN HIS VIEW THERE IS NO AUTHOR OR FOUNDER OF THE ASSESSEE TRUST AND THE ASSESSEE HAS NOT FURNISHED AUDITED ACCOUNTS FOR THE LAST THREE YEARS. THE DIRECTOR OF INCOME TAX (EXEMPTIONS ) WAS OF THE VIEW THAT SINCE THERE IS NO FOUNDER / AUTHOR, THE ASSESSEE TRUST IS A INVALID TRUST AND EVEN IF THE ASSESSEE A MENDS TRUST DEED BY BRINGING AUTHOR OR FOUNDER TO THE SAID TRU ST, IT IS AN INVALID TRUST. ON A PERUSAL OF THE TRUST DEED IT I S CLEAR THAT TRUSTEES HAVE SETTLED UPON THE TRUST BY CONTRIBUTIN G A SUM OF ` 5,555/-.THIS CLEARLY GOES TO SHOW THAT TRUSTEES ARE FOUNDERS OF THE TRUST AND THUS IT CANNOT BE SAID THAT THERE IS NO FOUNDER OR AUTHOR FOR THE TRUST AND THEREFORE IT IS NOT A G ENUINE TRUST. 5. COMING TO THE FURNISHING OF AUDITED ACCOUNTS, IT IS ONLY A PROCEDURAL LAPSE BY THE ASSESSEE IN NOT GETTING T HE 4 ITA NO.3079/MDS/2014 ACCOUNTS AUDITED BY A QUALIFIED AUDITOR AS APPOINTE D BY THE TRUST. THEREFORE, WE ARE INCLINED TO REMIT THE MATT ER BACK TO THE FILE OF THE DIRECTOR OF INCOME TAX (EXEMPTIONS) TO CONSIDER THE APPLICATION OF THE ASSESSEE FOR REGIST RATION AFRESH IN ACCORDANCE WITH LAW, AFTER PROVIDING ADEQ UATE OPPORTUNITY TO THE ASSESSEE. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH AUGUST, 2015. SD/- SD/- ( ) ( # % ) ( CHANDRA POOJARI ) ( CHALLA NAGENDRA PRASAD ) ' / ACCOUNTANT MEMBER %( ' / JUDICIAL MEMBER % /CHENNAI, * /DATED 19 TH AUGUST, 2015 SOMU (,- .- /COPY TO: 1. APPELLANT 2. RESPONDENT 3. / () /CIT(A) 4. / /CIT 5. - ((3 /DR 6. 6 /GF .