ACHARYA SHRI TULSI KALYAN KENDRA, CHANDIGARH V. COMMISSIONER OF INCOME TAX (EXAMPTION), CHANDIGARH

ITA 335/ASR/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6119 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 09-01-2019
• Assessment Year: 2017-2018
• Appeal Filed On: 31-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALOK KUMAR LD
• Assessee Lawyers: JASWINDER SINGH LD
• Keywords: Deemed Gift on Purchase of immovable Property below Jantri value; Gift; Charitable institution; Competent authority
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER ITA NO.335 (ASR)/2017 ASSESSMENT YEAR:2 017-18 M/S ACHARYA SHRI TULSI KALYAN KENDRA (REGD.) 300, CHAURI SARAK, LUDHIANA [PAN:AACTA 0299B] VS. CIT (EXEMPTIONS), CHANDIGARH (APPELLANT) (RESPONDENT) APPELLANT BY : SH. JASWINDER SINGH (LD. CA) RESPONDENT BY: SH. ALOK KUMAR (LD. DR) DATE OF HEARING: 16.01.2019 DATE OF PRONOUNCEMENT: 28.01.2019 ORDER PER N.K.CHOUDHRY, JM: THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE/TRUST (HEREINAFTER CALLED AS THE APPELLANT) AGAINST THE ORD ER DATED 28.04.2017, IMPUGNED HEREIN, PASSED BY THE LD. CIT (EXEMPTIONS), CHANDIGARH, U/S 12AA(1)(B)(II) OF THE I .T. ACT, 1961 (HEREINAFTER CALLED AS THE ACT). 2. THE APPELLANT HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL. 1. THAT THE ORDER OF THE LD. COMMISSIONER OF INCOM E TAX (EXEMPTIONS), CHANDIGARH IS ILLEGAL ERRONEOUS, PERV ERSE AND THUS UNCALLED FOR. 2. THAT THE LD. CIT(E) IS NOT JUSTIFIED IN DENYING THE EXEMPTION ON THE GROUND THAT IT HAS NOT BEEN APPLIED FOR EARL IER. 3. THAT LD. CIT(E) IS NOT JUSTIFIED IN DRAWING A WR ONG CONCLUSION THAT THE EXEMPTION IS BEING ASKED ONLY FOR THE REAS ON TO COVER THE BANK INTEREST PORTION FROM THE TAX NET WHEN THE SAI D INTEREST WHICH IS RECEIVED/ACCRUED IS BEING UTILIZED FOR THE ATTAI NMENT OF THE OBJECTIVES OF THE TRUST AND THE LD. CIT(E) HAS NOT DISPUTED ON ANY OF THE ACTIVITIES UNDERTAKEN BY THE TRUST. ITA NO.335 (ASR)/2017 M/S. ACHARYA SHRI TULSI KALYAN KENDRA VS. CIT(E) 2 4. THAT THE LD. CIT(E) HAS IGNORED THE FACT THAT TH E ORIGINAL TRUST DEED WAS ALSO REGISTERED BY THE SUB-REGISTRAR , LUDHIANA AND THE SAME HAS NOT BEEN DISPUTED, BUT HAS QUESTIONED THE AUTHORITY OF THE REGISTERING OFFICER IN SUPPLEMENTARY TRUST D EED WHICH IS SAME AS IN ORIGINAL TRUST DEED. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE APPELLANT IS AN ONGOING ENTITY AND IS IN OPERATION SINCE 18.09.1979 D ULY REGISTERED UNDER SOCIETY REGISTRATION ACT AND HAD FILED AN APPLICATION ON DATED 14.10.2016 FOR REGISTRATION U/S 1 2A OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS THE ACT) B EFORE THE LD. CIT(E), CHANDIGARH, WHICH WAS TAKEN INTO CONSIDERAT ION AND OPPORTUNITY OF HEARING WAS GIVEN TO THE APPELLANT ON 17.04.2017, HOWEVER, THE SAME WAS NOT AVAILED AND SOU GHT ADJOURNMENT, THEREAFTER, THE CASE WAS AGAIN RE-FIXED O N 24.04.2017. THE LD. CIT(E) SOUGHT CERTAIN CLARIFICATIO N/ DOCUMENTS FROM THE APPELLANT AS MENTIONED IN PARA NO.4 OF THE IMPUGNED ORDER, IN RESPONSE TO WHICH THE APPELLANT VID E ITS REPLY DATED 25.04.2017 REPLIED THE QUERIES BY CLARIFYING TH E ISSUES RAISED AS WELL AS BY SUBMITTING THE RELEVANT DOCUMENTS TH ERETO. AFTER CONSIDERATION OF THE REPLY, THE LD. CIT(E) REJE CTED THE APPLICATION U/S 12AA OF THE APPELLANT. DISSATISFIED, THE APPELLANT PREFERRED THIS APPEAL. 4. WE HAVE HEARD THE PARTIES AT LENGTH AND PERUSED THE MATERIAL AVAILABLE ON RECORD. AS PER TRUST DEED, THE A IMS AND OBJECTS OF THE APPELLANT/SOCIETY ARE AS UNDER: THE AIMS AND OBJECTS OF THE TRUST IS THAT THE TRUS T FUND SHALL BE HELD BY THE TRUSTEES UPON THE TRUST TO APPLY TH E SAME OR ANY PORTION THEREOF WITHOUT ANY DISCRIMINATION OF CASTE CREED AND RELIGION, SEX OR ANY OTHER THING FOR ALL OR ANY OF THE FOLLOWING PURPOSES: A) TO ESTABLISH, ACQUIRE/RUN AND/OR AID SCHOOLS, COLLE GES, LIBRARIES, READING ROOMS, HOSTELS, BOARDING HOUSES, LABORATORIES, RESEARCH INSTITUTIONS MUSIC AND CULTU RE ITA NO.335 (ASR)/2017 M/S. ACHARYA SHRI TULSI KALYAN KENDRA VS. CIT(E) 3 INSTITUTIONS, ADULT EDUCATION CENTERS, INSTITUTIONS FOR THE BLIND AND DEAF AND DUMB, TECHNICAL AND OTHER INSTITUTIONS IN ANY PLACE OR PLACES IN THE INDIAN U NION FOR THE USE OF THE STUDENTS, SCHOLARS AND THE STAFF AS WELL AS GENERALLY FOR THE SPREAD OF KNOWLEDGE AMONGST THE P UBLIC AND ALSO TO GIVE CONTRIBUTIONS OR DONATIONS TO THEM IN CASH AND/OR LAND FROM TIME TO TIME. B) TO ESTABLISH, MAINTAIN AND/OR GIVEN SCHOLARSHIPS AN D OTHER KINDS OF AID TO DESERVING STUDENTS AND SCHOLA RS, INCLUDING SUPPLY OF BOOKS, STIPENDS, MEDALS AND OTH ER INCENTIVES FOR STUDY AND TO PROVIDE BOARD AND RESID ENCE FOR THEM. C) TO ESTABLISH, ACQUIRE, RUN AND/OR AID KINDER GARDEN S, BALAMANDIRS, GYMNASIUM PHYSICAL AND CULTURAL HOMES, YOGA KENDRA AND OTHER LIKE INSTITUTIONS FOR THE IMPROVEMENT OF HEALTH OF STUDENTS AND GENERALLY TO MAINTAIN INSTITUTIONS FOR THE PHYSICAL ADVANCEMENT OF THE PUBLIC. D) TO ESTABLISH, ACQUIRE, MAINTAIN AND/OR GRANT AID TO HOSP8ITALS, MEDICAL SCHOOLS, MEDICALS COLLEGES, NUR SING INSTITUTIONS, SANITARIUMS, TRAVELLING DISPENSARIES, POOR CARE CLINIC OR SUCH OTHER SIMILAR INSTITUTIONS FOR THE USE AND BENEFIT OF THE PUBLIC. E) TO ESTABLISH, TO MAINTAIN, RUN AND/OR TO GRANT AID AND/OR HELP TO MATERNITY HOMES AND CHILD WELFARE CENTERS, ORPHANAGES AND WIDOWS HOMES AND NARI KALYAN SAMITIS . F) TO ESTABLISH OR PROMOTE THE ESTABLISHMENT OF AND/OR RENDER AID TO DHARAMSALAS, AUDITORIUMS, PRAYER HOME S, MUSAFARKHANAS, PRAVACHAN PLACES AND SUCH OTHER INSTITUTIONS WHICH MAY BE NECESSARY AND USEFUL FOR THE PUBLIC. G) TO GRANT AID FOR THE CONSTRUCTION, REPAIR AND MAINT ENANCE OF WELLS FOR THE ISSUE OF THE PUBLIC. H) TO CONSTRUCT PUBLIC ROADS, PARKS AND GARDESN AND/OR MAINTAIN AND/OR GRANT AID FOR THE CONSTRUCTION OR MAINTENANCE OF OR REPAIR OF THE SAME FOR THE USE OF THE PUBLIC. I) TO HELP THE PEOPLE DURING NATURAL CALAMITES SUCH AS FLOODS, FAMINE, EARTHQUAKE, FIRE, PESTILENCE AND OT HER SUCH OCCASIONS BY OPENDING OF FREE KITCHENS, CHEAP CANTE ENS AND BY GIVING GIFTS AND/OR DONATIONS TO THE SUFFERE D PEOPLE OR INSTITUTIONS OR ANY OTHER MONETARY HELP I N CASH OR IN ANY OTHER KIND. ITA NO.335 (ASR)/2017 M/S. ACHARYA SHRI TULSI KALYAN KENDRA VS. CIT(E) 4 J) TO PROVIDE GRANTS OR MONEY, FOOD, MEDICAL BOOKS, AGRICULTURIST SUPPLIES AND IMPLEMENTS OR OTHERWISE TO OR FOR THE BENEFIT OF PERSONS OR ORGANIZATIONS WHO ARE EITHER SUFFERING OR ARE PLEDGED TO FIGHT HUNGER AND DISEAS E. K) TO PURCHASES, STORE AND MAINTAIN ARTICLES OF FURNIT URE AND UTENSILS OF GENERAL PUBLIC UTILITY AND LEND THE SAM E TO THE NEEDY PERSONS AT THE TIME OF MARRIAGE AND/OR ANY OT HER OCCASION. L) TO GRANT AID TO POOR PERSONS. M) TO HELP OR GRANT AID FOR SUCH PUBLIC CHARITABLE OBJ ECTS AS THE TRUSTEES IN THEIR DISCRETION MAY THINK PROPER. N) TO DO ALL OTHER ACTS, DEEDS AND THINGS AS MAY BE NECESSARY OR DEEMED EXPEDIENT TO CARRY OUT ALL OR A NY OF THE OBJECTS AFORESAID. O) TO DONATE OR CONTRIBUTE TO PUBLIC CHARITABLE TRUSTS , INSTITUTIONS OR ORGANIZATIONS FOR CHARITABLE PURPOS ES AS DEFINE IN SECTION 2(15) OF THE INCOME-TAX ACT, 1961 OR ANY STATUTORY MODIFICATION ON OR RE-ENACTMENT THEREOF F OR THE TIME BEING IN FORCE PROVIDED THAT HE SAME IS COV ERED UNDER THE OBJECTS OF THESE PRESENTS. 4.1. IT WAS SUBMITTED BY THE LD. AR OF THE APPELLANT THAT THE TRUST WAS REGISTERED IN THE OFFICE OF THE SUB-REGISTRAR, LUDHIANA IN THE YEAR 1979 AND THEREAFTER, PURCHASED A SMALL PIE CE OF LAND BY DONATIONS COLLECTED FROM ITS MEMBER AT THAT TIME AN D MUCH ACTIVITY WAS NOT CARRIED DUE TO PAUCITY OF FUNDS. THE P ROPERTY WAS SOLD IN THE YEAR 1995 AND ANOTHER PIECE OF LAND WA S BOUGHT OUT OF THE SALE PROCEEDS OF THE SAID PROPERTY. THEREAFT ER, THE SAID LAND WAS ALSO SOLD IN THE YEAR 2007 FOR RS.3,99,00, 000/- (RUPEES THREE CRORES NINTY NINE LAKHS ONLY) AGAINST WHI CH THE TRUST HAD PAID DUE INCOME TAX AGAINST CAPITAL GAINS SO RE CEIVED. OUT OF ITS SALE PROCEEDS, THE TRUST INVESTED MAJOR PART OF MONEY, IN BUYING ANOTHER PIECE OF LAND ON WHICH IT CONSTRUCTED BUILDING WHICH IS NOW CALLED AS 'BHAWAN'. THE APPELLANT ALSO INV ESTED SOME OF THE AMOUNT IN FDRS WITH THE VIEW THAT BY INTE REST IT CAN CARRY OUT ITS OBJECTIVES, WHENEVER THERE WILL BE SHORT FALL OF FUNDS, IN ORDER TO ATTAIN THE OBJECTIVES OF THE TRUST. THE 'B HAWAN' ITA NO.335 (ASR)/2017 M/S. ACHARYA SHRI TULSI KALYAN KENDRA VS. CIT(E) 5 CONSISTS OF HALLS AND ROOMS WHICH ARE BEING USED FOR CARRYIN G OUT RELIGIOUS AND CHARITABLE ACTIVITIES SINCE ITS INCEPTIO NS. THE HALL MADE BY THE TRUST IS BEING USED FOR DELIVERING SERM ONS BY THE SAINTS AND ALSO GIVEN ON RENT TO GENERAL PUBLIC ON DAILY BASIS AT VERY NOMINAL CHARGES FOR HOLDING PUBLIC GATHERINGS. THE ROOMS MADE BY THE SOCIETY (DHARAMSHALA) ARE GIVEN TO THE PE RSONS, WHO COME TO HEAR SERMONS OR FOR THEIR PERSONAL OR BUSIN ESS TRIP ON RENT ON DAILY BASIS AT NOMINAL RATES AND THERE IS N O PERMANENT TENANT. IT WAS ALSO SUBMITTED THAT THE APPEL LANT IS ALSO MANAGING THE HOMEOPATHY DISPENSARY FOR WELFARE OF THE GENERAL PUBLIC AND HOLDING BLOOD DONATION CAMPS TO FACI LITATE AND HELP VARIOUS HOSPITALS, YOGA CLASSES AND VARIOUS HEALTH CA RE CAMPS FOR GENERAL PUBLIC. 4.2 THE LD. CIT(E) WHILE DECLINING THE APPLICATION OF TH E APPELLANT OBSERVED THAT THAT AFTER THE SALE OF LAND, THE APPELLANT CLAIMS TO HAVE INVESTED THE MONEY INTO BUILDING AND RU NNING DHARMSHALA ON RENT WHICH IS RS.750/- PER A.C ROOM. THE APPELLANT HAS ALSO BOOKED ITS BUILDING FOR MARRIAGE AN D OTHER FUNCTIONS, WHICH ARE NOT COVERED UNDER CHARITABLE PURPOSE U/S 2(15) OF THE IT ACT. FURTHER FINANCIAL STATEMENTS DO NOT CONFIRM TO THE STATED OSTENSIBLE ACTIVITIES AS CLAIMED BY THE APP ELLANT AS THE SAME IS NOT SUPPORTED BY ANY EVIDENCE. WE HAVE PERUSED THE MATERIAL PLACED ON RECORD INTER AL IA THE RECEIPT OF THE HALL AND ROOMS BOOKED BY THE APPEL LANT, FROM WHICH IT CLEARLY REFLECTS THAT THE APPELLANT IS CHARGING VERY NOMINAL CHARGES SUCH AS 11,000/- FOR ONE PROGRAMME IN HA LL AND RS.750/- FOR PER ROOM PER DAY . FROM CLAUSE-'F' O F OBJECTS OF THE TRUST DEED, IT REFLECTS THAT TRUST IS FORMED TO ESTA BLISH OR PROMOTE THE ESTABLISHMENT OF AND/OR RENDER AID TO DHA RAMSHALA, AUDITORIUMS, PRAYER HOMES, MUSAFARKHANAS, PRAVACHAN PLA CES ITA NO.335 (ASR)/2017 M/S. ACHARYA SHRI TULSI KALYAN KENDRA VS. CIT(E) 6 AND SUCH OTHER INSTITUTIONS WHICH MAY BE NECESSARY AND USEFU L FOR THE PUBLIC. FURTHER FROM CLAUSE-'D' OF THE OBJECT S, IT REFLECTS THAT THE TRUST HAS BEEN ESTABLISHED TO ACQUIRE, MAINTAI N AND/OR GRANT AID TO HOSPITALS, MEDICAL SCHOOLS, MEDICALS COLLEGE S, NURSING INSTITUTIONS, SANITARIUMS, TRAVELLING DISPENSA RIES, POOR CARE CLINIC OR SUCH OTHER SIMILAR INSTITUTIONS FOR THE USE AND BENEFIT OF THE PUBLIC. FROM THE OBJECTS IT IS CLEAR TH AT THE TRUST HAS BEEN FORMED FOR VARIOUS OBJECTS INTER-ALIA TO ESTAB LISH DHARMSHALA ETC. AND TO ESTABLISH, ACQUIRE, MAINTAIN AND/ OR GRANT AID HOSPITALS, POOR CARE CLINIC ETC. WHICH COVERS THE RUNNIN G DHARMSHALA WHICH IS CALLED AS 'BHAWAN'. EVEN FROM THE PHOTO GRAPHS ATTACHED WITH THE (PB PAGES 110 TO 116) IT CLEA RLY REFLECTS THAT THE ASSESSEE IS CARRYING SOCIAL, SPIRITUAL AND CHARITABLE ACTIVITIES BY OPERATING HOMEOPATHY DISPENSAR Y AND ORGANIZING CAMP FOR BLOOD DONATION AND SERMONS ETC., H ENCE WE ARE NOT IN AGREEMENT WITH THE LD. CIT(E) THAT THERE IS NO WAY THE GENUINENESS OF THE ACTIVITIES OF THE TRUST CAN BE CORROBORATED WITH THE STATED AIMS AND OBJECTS. 4.3 IT IS TRITE TO SAY THAT AT THE TIME OF REGISTRATION U /S 12AA, THE LD. CIT(E) HAS TO CONSIDER THE TWIN REQUIREMENT (I ) OBJECTS OF THE ASSESSEE SOCIETY (II) GENUINENESS OF ITS ACTIVITY. NOWHE RE IN THE ORDER, THE LD. CIT(E) HAS NEITHER POINTED OUT AN Y DEFECT IN THE OBJECTS OF THE SOCIETY AND/OR ACTIVITIES OF THE APPL ICANT SOCIETY NOR DOUBTED THE GENUINENESS OF THE ACTIVITIES SPECI FICALLY, THEREFORE WE ARE OF THE CONSIDERED VIEW THAT THE APPE LLANT IS CARRYING ITS ACTIVITIES IN ACCORDANCE TO ITS OBJECTS SPECIFIED IN THE TRUST DEED AND FOR CHARITABLE PURPOSES. 4.4 THE ANOTHER GROUND OF REJECTION OF THE REGISTRATION W AS THAT COMPLETE INACTIVITY TILL THE SALE OF LAND AND TH E ASSOCIATED GAINS FROM THE SALE ARE CLEAR POINTERS THAT THE ACTIVI TIES (RATHER ITA NO.335 (ASR)/2017 M/S. ACHARYA SHRI TULSI KALYAN KENDRA VS. CIT(E) 7 ZERO ACTIVITIES) ARE NOT IN SYNC WITH THE STATED OBJECTS. FURTHER THERE IS A GAP OF 10 YEARS AFTER THE YEAR 2007-08 WHI CH IS ALSO NOT EXPLAINED WHAT TO SPEAK OF GAP SINCE 1979 AND TH E COMPLETE LACK OF ACTIVITIES IN THE PAST DO NOT ENTHUSIASM ANY CONF IDENCE IN THE CHARITABLE ACTIVITY OF THE APPLICANT. IT WAS CLEARLY DEMONSTRATED BY THE APPELLANT THAT BEFORE TO ESTABLISH ING THE 'BHAWAN' THE APPELLANT HAS NOT CARRIED OUT ANY ACTIVIT Y DUE TO PAUCITY OF FUNDS, WHICH IN OUR CONSIDERED VIEW SEEMS TO B E LOGICAL REASON FOR NOT CARRYING OUT ANY ACTIVITY PREVIO USLY, HENCE THIS GROUND OF REJECTION CAN NOT SUSTAIN. 4.5 THE MAIN REASON FOR REJECTION OF THE APPLICATION WAS T HAT AMENDMENT OF TRUST DEED ON 27.03.2014 INCORPORATING DISSOLUTION CLAUSE AND AT THE SAME TIME INTRODUCTION OF NEW TRUSTEES. THE CHANGES IN THE TRUST DEEDS ALSO DO NOT HAVE SANCTION OF THE COMPETENT COURT WHICH INVARIABLY IS THE HI GH COURT WIELDING JURISDICTION. TILL SUCH AMENDMENTS ARE A CCEPTED BY THE COMPETENT COURT THE DOCUMENTS SUBMITTED TO PROJ ECT THAT DISSOLUTION CLAUSE HAS BEEN INTRODUCED, THE SAME ARE NOT LEGALLY TENABLE. FURTHER, THE LD. CIT(E) HAS OBSERVED THAT IT IS SEEN THAT A SUPPLEMENTARY TRUST DEED HAS BEEN SUBMITTED TO THE SU B- REGISTRAR, LUDHIANA. WHETHER THE SAME HAS BEEN REGISTER ED AND WHETHER THE SUB-REGISTRAR IS COMPETENT TO DO THE SAME I N THE CASE OF PUBLIC CHARITABLE TRUST, HAS NOT BE EVIDENCED. I T IS ALSO CONFOUNDING THAT EIGHT TRUSTEES HAVE BEEN NEWLY INTRO DUCED IN ONE GO. THE REASONS ESPOUSED THAT IT WAS TO REPLACE THOSE WHO HAD DIED CLEARLY ARE POINTERS TOWARDS A PLANNING AT TH IS (DESPITE ITS CREATION IN 1979) TO SEEK EXEMPTION. ITA NO.335 (ASR)/2017 M/S. ACHARYA SHRI TULSI KALYAN KENDRA VS. CIT(E) 8 4.6 SPECIFIC QUERY WAS RAISED TO THE LD. A.R., QUA REGISTRA TION OF THE DISSOLUTION CLAUSE, INTRODUCTION OF NEW TRUSTEES AN D REGISTRATION OF SUPPLEMENTARY TRUST DEED, WHO ALTHOU GH SUBMITTED SOME MATERIAL DOWNLOADED FROM THE INTERNET BUT COULD NOT SPECIFY EXACT POSITION, HOWEVER LD. DR SH. ALOK KUM AR WITH ALL FAIRNESS, ASSISTED THE COURT. 4.7 IN THIS CASE, SOME OF THE TRUSTEES DIED AND IN PLACE OF THEM, NEW TRUSTEES HAVE BEEN APPOINTED BY EXECUTING SUPPLEMENTARY TRUST DEED ON DATED 27-03-2014, WHICH W AS GOT REGISTERED (VIDE REGISTRATION NO 2931, REGISTER NO. 1, BOOK NO 0, PAGE NO. 0) ON DATED 28-05-2014 IN THE OFFICE OF THE SUB REGISTRAR (EAST) LUDHIANA. 4.8 THE FIRST QUESTION ARISES AS TO WHETHER THE NEW TRUSTEES CAN BE APPOINTED. SECTION 73 AND 74 OF INDIAN TRUSTS ACT 1882, ENUMERATED THE DISCHARGE OF TRUSTEE(S) AND APPOINTMENT OF NEW TRUSTEE(S). FOR READY REFERENCE PROVISION ARE REPRODUCED HEREIN BELOW:- 73. APPOINTMENT OF NEW TRUSTEES ON DEATH, ETC . WHENEVER ANY PERSON APPOINTED A TRUSTEE DISCLAIMS, OR ANY TRUSTEE, EITHER ORIGINAL OR SUBSTITUTED, DIES, OR I S FOR A CONTINUOUS PERIOD OF SIX MONTHS, ABSENT FROM 1[INDIA] OR LEAVE S 1[INDIA] FOR THE PURPOSE OF RESIDING ABROAD, OR IS DECLARED AN INSOL VENT, OR DESIRES TO BE DISCHARGED FROM THE TRUST, OR REFUSES OR BECO MES, IN THE OPINION OF A PRINCIPAL CIVIL COURT OF ORIGINAL JURI SDICTION, UNFIT OR PERSONALLY INCAPABLE TO ACT IN THE TRUST, OR ACCEPT S AN INCONSISTENT TRUST, A NEW TRUSTEE MAY BE APPOINTED IN HIS PLACE BY (A) THE PERSON NOMINATED FOR THAT PURPOSE BY THE INST RUMENT OF TRUST (IF ANY), OR (B) IF THERE BE NO SUCH PERSON, OR NO SUCH PERSON ABL E AND WILLING TO ACT, THE AUTHOR OF THE TRUST IF HE BE AL IVE AND COMPETENT TO CONTRACT, OR THE SURVIVING OR CONTINUI NG TRUSTEES OR TRUSTEE FOR THE TIME BEING, OR LEGAL RE PRESENTATIVE OF THE LAST SURVIVING AND CONTINUING TRUSTEE, OR (W ITH THE CONSENT OF THE COURT) THE RETIRING TRUSTEES, IF THE Y ALL RETIRE SIMULTANEOUSLY, OR (WITH THE LIKE CONSENT) THE LAST RETIRING TRUSTEE. EVERY SUCH APPOINTMENT SHALL BE BY WRITING UNDER THE HAND OF THE PERSON MAKING IT. ON AN APPOINTMENT OF A NEW TRUSTEE, THE NUMBER OF TRUSTEES MAY BE INCREASE D. THE OFFICIAL TRUSTEE MAY, WITH HIS CONSENT AND BY THE O RDER OF THE COURT, BE APPOINTED UNDER THIS SECTION, IN ANY CASE IN ITA NO.335 (ASR)/2017 M/S. ACHARYA SHRI TULSI KALYAN KENDRA VS. CIT(E) 9 WHICH ONLY ONE TRUSTEE IS TO BE APPOINTED AND SUCH TRUSTEE IS TO BE THE SOLE TRUSTEE. THE PROVISIONS OF THIS S ECTION RELATIVE TO A TRUSTEE WHO IS DEAD INCLUDE THE CASE OF A PERSON NOMINATED TRUSTEE IN A WILL, BUT DYING BEFOR E THE TESTATOR, AND THOSE RELATIVE TO A CONTINUING TRUSTE E INCLUDE A REFUSING OR RETIRING TRUSTEE IF WILLING TO ACT IN T HE EXECUTION OF THE POWER. 74. APPOINTMENT BY COURT . WHEREVER ANY SUCH VACANCY OR DISQUALIFICATION OCCUR S AND IT IS FOUND IMPRACTICABLE TO APPOINT A NEW TRUSTEE UNDER SECTION 73, THE BENEFICIARY MAY, WITHOUT INSTITUTING A SUIT, APPLY BY PETITION TO A PRINCIPAL CIVIL COURT OF ORIGINAL JURISDICTION FOR THE APPOINTMENT OF A TRUSTEE OR A NEW TRUSTEE, AND THE COURT MAY APPOINT A TRUSTEE OR A NEW TRUSTEE ACCORDINGLY. RULE FOR SELECTING NEW TRU STEES.IN APPOINTING NEW TRUSTEES, THE COURT SHALL HAVE REGAR D (A) TO THE WISHES OF THE AUTHOR OF THE TRUST AS EX PRESSED IN, OR TO BE INFERRED FROM, THE INSTRUMENT OF TRUST; (B) TO THE WISHES OF THE PERSON, IF ANY EMPOWERED TO APPOINT NEW TRUSTEES; (C) TO THE QUESTION WHETHER THE APPOINTMENT WILL P ROMOTE OR IMPEDE THE EXECUTION OF THE TRUST; AND (D) WHERE THERE ARE MORE BENEFICIARIES THAN ONE, T O THE INTERESTS OF ALL SUCH BENEFICIARIES. 4.9 ACCORDING TO SECTION 73 OF THE INDIAN TRUSTS ACT, ANY PERSON APPOINTED A TRUSTEE DISCLAIMS, OR ANY TRUSTEE, EI THER ORIGINAL OR SUBSTITUTED, DIES, OR IS FOR A CONTINUOUS PER IOD OF SIX MONTHS, ABSENT FROM [INDIA] OR LEAVES [INDIA] FOR THE PURPOSE OF RESIDING ABROAD, OR IS DECLARED AN INSOLVENT, OR DESIRES TO BE DISCHARGED FROM THE TRUST, OR REFUSES OR BECOMES, IN THE O PINION OF A PRINCIPAL CIVIL COURT OF ORIGINAL JURISDICTION, UNFIT OR PERSONALLY INCAPABLE TO ACT IN THE TRUST, OR ACCEPTS AN INCONSISTENT TRUST, NEW TRUSTEE CAN BE APPOINTED IN HIS PLACE, FIRSTLY BY THE PERSON NOMINATED FOR THAT PURPOSE BY TH E INSTRUMENT OF TRUST (IF ANY) OR SECONDLY IF THERE BE NO SUCH PERSON, OR NO SUCH PERSON ABLE AND WILLING TO ACT, THE A UTHOR OF THE TRUST IF HE BE ALIVE AND COMPETENT TO CONTRACT, OR THE SURVIVING OR CONTINUING TRUSTEES OR TRUSTEE FOR THE TIME BEING, OR LEGAL REPRESENTATIVE OF THE LAST SURVIVING AND CONTINUI NG TRUSTEE, OR (WITH THE CONSENT OF THE COURT) THE RETIRING TRUSTE ES, IF THEY ALL ITA NO.335 (ASR)/2017 M/S. ACHARYA SHRI TULSI KALYAN KENDRA VS. CIT(E) 10 RETIRE SIMULTANEOUSLY, OR (WITH THE LIKE CONSENT) THE L AST RETIRING TRUSTEE. EVERY SUCH APPOINTMENT SHALL BE BY WRITING UNDER THE H AND OF THE PERSON MAKING IT. ON AN APPOINTMENT OF A NEW TRUSTEE, THE NUMBER OF TRUSTEES MAY BE INCREASED. THE OFFICIAL T RUSTEE MAY, WITH HIS CONSENT AND BY THE ORDER OF THE COURT, BE APPOINTED UNDER THIS SECTION, IN ANY CASE IN WHICH ONLY O NE TRUSTEE IS TO BE APPOINTED AND SUCH TRUSTEE IS TO BE THE SOLE TRUSTEE. THE PROVISIONS OF THIS SECTION RELATIVE TO A TRU STEE WHO IS DEAD INCLUDE THE CASE OF A PERSON NOMINATED TRUSTEE IN A WILL, BUT DYING BEFORE THE TESTATOR, AND THOSE RELATIVE TO A CONTINUING TRUSTEE INCLUDE A REFUSING OR RETIRING TRUSTEE IF WILL ING TO ACT IN THE EXECUTION OF THE POWER. 4.10 SECTION 74 PRESCRIBE 'WHEREVER ANY SUCH VACANCY OR DISQUALIFICATION OCCURS AND IT IS FOUND IMPRACTICABLE TO APPOINT A NEW TRUSTEE UNDER SECTION 73 , THE BENEFICIARY MAY, WITHOUT INSTITUTING A SUIT, APPLY BY PETITION TO A PRINCIPAL CIVIL COURT OF ORIGINAL JURISDICTION FOR THE APPOINTMENT OF A TRUSTEE OR A NEW TRUSTEE, AND THE COURT MAY APPOINT A TRUSTEE OR A NEW TRUSTEE ACCORDINGLY'. 4.11 FROM THE PROVISIONS IT IS CLEAR THAT WHENEVER ANY PERSON DIES OR ANY OTHER REASONS AS SPECIFIED IN SECTION 73 , NEW TRUSTEE CAN BE APPOINTED IN HIS PLACE, BY THE PERSON NOM INATED FOR THAT PURPOSE BY THE INSTRUMENT OF TRUST (IF ANY). SECTION 74 SPECIFY 'W HEREVER ANY SUCH VACANCY OR DISQUALIFICATION OCCURS AND IT IS FOUND IMPRACTICABLE TO APPOINT A NEW TRUSTEE UNDER SECTION 73 , THE BENEFICIARY MAY, WITHOUT INSTITUTING A SUIT, APPLY BY PETITION TO A PRINCIPAL CIVIL COURT OF OR IGINAL ITA NO.335 (ASR)/2017 M/S. ACHARYA SHRI TULSI KALYAN KENDRA VS. CIT(E) 11 JURISDICTION FOR THE APPOINTMENT OF A TRUSTEE OR A NEW TRUSTEE, AND THE COURT MAY APPOINT A TRUSTEE OR A NEW TRUSTEE ACCORDINGLY'. HERE IN THE INSTANT CASE NEW TRUSTEES HAVE BEEN APPOINTED IN PLACE OF ERSTWHILE TRUSTEES WHO HAVE DIED, BY THE BO ARD OF TRUSTEES AND THEREFORE SITUATION CLEARLY SEEMS TO BE COVER ED BY SUB CLAUSE (A) OF SECTION 73 OF THE INDIAN TRUSTS ACT AN D IN OUR OPINION THERE IS NO EMBARGO AND IMPEDIMENT IN APPOIN TMENT OF NEW TRUSTEES, EXCEPT AS SPECIFIED IN SECTION 73 OF THE ACT, WHICH OTHERWISE IS NOT APPLICABLE TO THE INSTANT CASE, HENCE WE ARE OF THE CONSIDERED VIEW THAT NEW TRUSTEES HAVE BEEN APPOIN TED IN ACCORDANCE OF LAW. 4.12 NOW COMING TO SECOND QUESTION QUA REGISTRATION OF SUPPLEMENTARY TRUST DEED DATED 27-03-2014. CERTAIN DOCUMENTS ARE COMPULSORY REQUIRED TO BE REGISTERED UNDE R SECTION OF THE INDIAN REGISTRATION ACT 1908. FOR THE SAK E OF CLARITY AND READY REFERENCE THE RELEVANT PROVISIONS ARE REPRODUCED HEREIN: PART III OF REGISTRABLE DOCUMENTS 17. DOCUMENTS OF WHICH REGISTRATION IS COMPULSORY. (1) THE FOLLOWING DOCUMENTS SHALL BE REGISTERED, I F THE PROPERTY TO WHICH THEY RELATE IS SITUATE IN A DISTRICT IN WHICH , AND IF THEY HAVE BEEN EXECUTED ON OR AFTER THE DATE ON WHICH, A CT NO. XVI OF 1864, OR THE INDIAN REGISTRATION ACT, 1866 (20 O F 1866), OR THE INDIAN REGISTRATION ACT, 1871 (8 OF 1871), OR THE I NDIAN REGISTRATION ACT, 1877 (3 OF 1877), OR THIS ACT CAM E OR COMES INTO FORCE, NAMELY: (A) INSTRUMENTS OF GIFT OF IMMOVABLE PROPERTY; (B) OTHER NON-TESTAMENTARY INSTRUMENTS WHICH PURPORT OR OPERATE TO CREATE, DECLARE, ASSIGN, LIMIT OR EXTING UISH, ITA NO.335 (ASR)/2017 M/S. ACHARYA SHRI TULSI KALYAN KENDRA VS. CIT(E) 12 WHETHER IN PRESENT OR IN FUTURE, ANY RIGHT, TITLE O R INTEREST, WHETHER VESTED OR CONTINGENT, OF THE VALU E OF ONE HUNDRED RUPEES AND UPWARDS, TO OR IN IMMOVABLE PROPERTY ; (C) NON-TESTAMENTARY INSTRUMENTS WHICH ACKNOWLEDGE THE RECEIPT OR PAYMENT OF ANY CONSIDERATION ON ACCOUNT OF THE CREATION, DECLARATION, ASSIGNMENT, LIMITATION O R EXTINCTION OF ANY SUCH RIGHT, TITLE OR INTEREST; (D) LEASES OF IMMOVABLE PROPERTY FROM YEAR TO YEAR , OR FOR ANY TERM EXCEEDING ONE YEAR, OR RESERVING A YEARLY RENT; AND (E) NON-TESTAMENTARY INSTRUMENTS TRANSFERRING OR A SSIGNING ANY DECREE OR ORDER OF A COURT OR ANY AWARD WHEN SU CH DECREE OR ORDER OR AWARD PURPORTS OR OPERATES TO CREATE, DECLARE, ASSIGN, LIMIT OR EXTINGUISH, WHETH ER IN PRESENT OR IN FUTURE, ANY RIGHT, TITLE OR INTEREST, WHETHER VESTED OR CONTINGENT, OF THE VALUE OF ONE HUNDRED RUPEES AND UPWARDS, TO OR IN IMMOVABLE PROPERTY:] PROVIDED THAT THE STATE GOVERNMENT MAY, BY ORDER PUBLISHED IN THE OFFICIAL GAZETTE, EXEMPT FROM THE OPERATION OF THIS SUB-SECTION ANY LEASES EXECUTED I N ANY DISTRICT, OR PART OF A DISTRICT, THE TERMS GRANTED BY WHICH DO NOT EXCEED FIVE YEARS AND THE ANNUAL RENTS RESER VED BY WHICH DO NOT EXCEED FIFTY RUPEES. (1A) . (2) .. 4.13 ACCORDING TO PART IIII, SUB CLAUSE (B) OF SUB SECTION 1 OF SECTION 17 OF THE INDIAN REGISTRATION ACT 1908, OTHER NON- TESTAMENTARY INSTRUMENTS WHICH PURPORT OR OPERATE T O CREATE, DECLARE, ASSIGN, LIMIT OR EXTINGUISH, WHETHER IN PRESENT OR IN FUTUR E, ANY RIGHT, TITLE OR INTEREST, WHETHER VESTED OR CONTINGENT, OF THE VALUE OF ONE H UNDRED RUPEES AND UPWARDS, TO OR IN IMMOVABLE PROPERTY ARE REQUIRED TO BE REGISTERED COMPULSORILY. T HE TRUST IS NON-TESTAMENTARY INSTRUMENT, WHICH ALSO REQUIRED TO BE REGISTERED UNDER INDIAN REGISTRATION A CT. EVEN THERE IS NO PROVISION IN INDIAN TRUST ACT BY WHICH IT CA N BE HELD THAT TRUST IS REQUIRED TO BE REGISTERED IN ACCORDANCE WIT H ANY OTHER LAW. THEREFORE IN OUR THOUGHTFUL CONSIDERATION, THE ITA NO.335 (ASR)/2017 M/S. ACHARYA SHRI TULSI KALYAN KENDRA VS. CIT(E) 13 REGISTRATION OF TRUST DEED OR SUPPLEMENTARY TRUST DEED IS REQUIRED TO BE REGISTERED UNDER THE INDIAN REGISTRATI ON ACT 1908 AND FOR GETTING REGISTRATION COMPETENT AUTHORITY IS TH E SUB- REGISTRAR IN ACCORDANCE WITH THE INDIAN REGISTRATION ACT. 1908. HENCE, WE DO NOT HAVE ANY HESITATION TO HELD THAT THE OBSERVATION OF THE LD. CIT(E) WITHOUT SPECIFYING ANY PROVISION OF LAW, JUST MENTIONING THAT FURTHER, AMENDMENT OF THE TRUST DEED ON 27.03.2014 INCORPORATING DISSOLUTION CLAUSE AND AT THE SAME TIME INTRODUCTION OF NEW TRUSTEES ARE ALSO REITERATION O F THE MOTIVE OF THE APPLICANT TO SEEK REGISTRATION UNDER THIS SECTION M ERELY TO SAVE ON TAXES ON INTEREST INCOME. THE CHANGES IN THE TRUST DEED ALSO DO NOT HAVE SANCTION OF THE COMPETENT COURT WHICH INVARIAB LY IS THE HIGH COURT WIELDING JURISDICTION. TILL SUCH AMENDMENTS A RE ACCEPTED BY THE COMPETENT COURT THE DOCUMENTS SUBMITTED TO PROJ ECT THAT DISSOLUTION CLAUSE HAS BEEN INTRODUCED. HOWEVER, TH E APPARENT REASON WHY ITS CASE WAS DISMISSED EARLIER, THE SAME ARE NOT LEGALLY TENABLE. IT IS SEEN THAT A SUPPLEMENTARY TRUST DEED HAS BEEN SUBMITTED TO THE SUB-REGISTRAR, LUDHIANA. WHETHER T HE SAME HAS BEEN REGISTERED AND WHETHER THE SUB-REGISTRAR IS CO MPETENT TO DO THE SAME IN THE CASE OF PUBLIC CHARITABLE TRUST HAS NOT BEEN EVIDENCED. THE COMPONENTS OF THE TRUST DEED (TILL T HE AMENDMENTS ARE ACCEPTED BY THE COMPETENT COURT) ARE HELD TO BE RESTRICTIVE AND TO THAT EXTENT NOT ENDURING TO THE BENEFIT OF THE GENE RAL PUBLIC , SEEMS TO BE GENERAL REMARKS WITHOUT CONSIDERING THE INTRICAC IES OF THE LAW AND THEREFORE THE REASONS ARE ILLOGICAL, HENCE, WE ARE NOT INCLINED TO ACCEPT THIS GROUND OF REJECTION ALSO. IN OVER ALL CIRCUMSTANCES AND CUMULATIVE EFFECT, WE ARE INCLINED TO GRANT THE REGISTRATION TO THE APPELLANT T RUST AND HENCE DIRECT THE LD. CIT(E) TO GRANT THE REGISTRATION U/S 12 AA OF THE ACT, HOWEVER, IT IS CLARIFIED THAT THE LD. CIT(E) WHI LE GRANTING THE ITA NO.335 (ASR)/2017 M/S. ACHARYA SHRI TULSI KALYAN KENDRA VS. CIT(E) 14 REGISTRATION, SHALL BE AT LIBERTY TO ENDORSE THE CONDIT ION, IF ANY, HE FIND TO BE REASONABLE IN ACCORDANCE WITH LAW. 4.14 AT THE END, WE ENDORSEE THAT THE DEPARTMENT REPRESENTATIVE IS NOT MERELY A REPRESENTATIVE OF THE DEPARTMENT BUT HE HAS TO ACT AS AN INDEPENDENT AND IMPARTIAL OFFI CER TO ASSIST THE COURT IN ADMINISTRATION OF JUSTICE. THE LD. D.R . MAY PROSECUTE THE REVENUE'S CASE WITH EARNESTNESS AND VIGOR, IN DEED HE SHOULD DO SO. BUT, WHILE MAKING STRIKE HARD BLOWS, HE IS NOT AT LIBERTY TO STRIKE FOUL ONES. IT IS AS MUCH HIS DUTY TO REFRAIN FROM IMPROPER METHODS CALCULATED TO PRODUCE A WRONGFUL ADJUDICATION AS IT IS TO USE EVERY LEGITIMATE MEANS TO B RING ABOUT A JUST ONE. FURTHER THE LD. DR IS NOT ONLY TO DEFEND THE CASE OF THE REVENUE BUT ALSO ENTRUSTED WITH THE RESPONSIBILITY TO ASSIST THE COURT IN ADMINISTRATION OF THE JUSTICE FOR PROPER ADJUDICATION OF LIS IN ACCORDANCE WITH LAW. THE D R IS UNIQUE IN THAT HE HAS BOTH POWERS AND DUTIES THAT OTHER LAWYERS DO NOT. THI S DOES NOT MEAN HE IS ANY BETTER OR WORSE THAN OTHER LAWYERS, B UT IT DOES RESULT IN MANY MISCONCEPTIONS ABOUT THE ROLES OF DR IN TH E JUSTICE DELIVERY SYSTEM. THE QUALITIES OF A GOOD DR IS EL USIVE AND AS IMPOSSIBLE TO DEFINE AS THOSE WHICH MAKE A GENTLEMAN AND THOSE WHO NEED TO BE TOLD WOULD NOT UNDERSTAND IT ANY WAY. SENSITIVENESS TO FAIR PLAY AND SPORTSMANSHIP IS PERHAPS THE BEST PROTECTION AGAINST THE ABUSE OF POWER AND THE TAX PAYE R'S SAFETY LIES IN THE HANDS OF DR, WHO TEMPERS ZEAL WITH HUMAN KINDNESS, WHO SEEKS TRUTH AND NOT VICTIMS, WHO SERVES THE LAW AND NOT FACTIONAL PURPOSES, AND WHO APPROACHES HIS TASK WITH HUMIL ITY. HENCE WE APPRECIATE THE BRAINY AND ERUDITE BOLDNESS OF S H. ALOK KUMAR, LD. CIT DR, WHO FAIRLY, UN-HESITATINGLY AND H ONESTLY ENLIGHTENED US QUA ISSUE IN HAND. ITA NO.335 (ASR)/2017 M/S. ACHARYA SHRI TULSI KALYAN KENDRA VS. CIT(E) 15 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE SOCIETY STANDS ALLOWED. ORDER PRONOUNCE IN THE OPEN COURT ON 28.01.2019 SD/- SD/- (SANJAY ARORA) (N.K.CHOUDHRY) ACCOUNTANT MEMBER J UDICIAL MEMBER DATED:28.01.2019 /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) M/S ACHARYA SHRI TULSI KALYAN KENDRA (REGD.) 300, CHAURI SARAK, LUDHIANA (2) THE CIT (EXEMPTION), CHANDIGARH (3) THE SR DR, I.T.A.T., AMRITSAR TRUE COPY BY ORDER FILENAME: ACHARYA SHRI TULSI KALYAN KENDRA- 335-17 DIRECTORY: D:\DOCUMENT\NKC ORDERS 2018 TEMPLATE: C:\USERS\ETC PARMOD\APPDATA\ROAMING\MICROSOFT\TEMPLATES\NORMAL.D OT TITLE: IN THE INCOME TAX APPELLATE TRIBU NAL SUBJECT: AUTHOR: RAHUL PRABHAKAR KEYWORDS: COMMENTS: CREATION DATE: 1/23/2019 11:40:00 AM CHANGE NUMBER: 210 LAST SAVED ON: 1/29/2019 4:39:00 PM LAST SAVED BY: ETC PARMOD TOTAL EDITING TIME: 526 MINUTES LAST PRINTED ON: 1/29/2019 4:39:00 PM AS OF LAST COMPLETE PRINTING NUMBER OF PAGES: 16 (APPROX.) NUMBER OF WORDS: 4,164 (APPROX.) NUMBER OF CHARACTERS: 23,736 (APPROX.)