St.Joseph's Charitable Trust, Ernakulam V. CIT, Calicut

ITA 343/COCH/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69058 (ITAT-COCHIN)
• Duration Of Justice: 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-11-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 07-10-2013
• Assessment Year: misc
• Appeal Filed On: 27-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: LATHA V KUMAR
• Assessee Lawyers: T K MATHEW
• Keywords: Charitable institution
• Section: 12A; 12AA

Judgement Text

ITA NO. 343/ COCH/ 2013 1 IN THE INCOME TAX APELALTER TIBUNAL COCHIN BENCH , COCHIN BEFORE S/SH RI N.R.S. GANESAN, JM & B. R. BASKARAN, AM ITA NO. 343 /COCH/ 2013 ST JOSEPHS CHARITABLE TRUST PANDIPILLY HOUSE CHETTIKAD KUNJITHAI PO NORTH PARVOOR ERNAKULAM 683 522 VS THE COMMISSIONE R OF INCOME TAX KOCHI ( APPELLANT) (RESPONDENT) PAN NO. AAMTS0668N ASSESSEE BY SHRI T K MATHEW REVENUE BY SMT LATHA V KUMAR, JR DR DATE OF HEARING 7 TH OCT 12013 DATE OF PRONOUNCEMENT 13 TH NOV 2013 OR D ER PER B.R. BASKARAN, AM: THE ASSE SSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 29.4.2013 PASSED BY THE LD CIT I, KOCHI REJECTING THE APPLICATION FILED BY THE ASSESSEE SEEKING REGISTRATION U/S 12A A OF THE ACT. 2 WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFULLY PERUSED THE RECOR DS. THE RELEVANT PORTION OF THE ORDER PASSED BY THE LD CIT READS AS UNDER: 3. THE OBJECTS OF THE TRUST ARE MAINLY TO RENDER SERVICES BY GIVING EDUCATIONAL AID, MEDICAL AID ETC., TO THE NEEDY PUBLIC. IT IS VERIFIED FROM THE DETAILS SUBMITTED THAT THE TRUS T HAS PROVIDED FINANCIAL ASSISTANCE TO THE POOR. THE MAIN SOURCE OF INCOME OF THE TRUST IS FOUND TO BE DONATION. 4. ON VERIFYING THE DETAILS, IT IS FOUND THAT AS PER CLAUSE 3 IN PAGE 3 OF THE TRUST DEED, THE SETTLER HAS SETTLED ON THE TRUSTEE A SUM OF RS. 1000/ - TO HOLD AS T RUST FUND. HOWEVER, THIS AMOUNT HAS NOT BEEN SHOWN AS THE CORPUS FUND/CAPITAL IN THE BALANCE ITA NO. 343/ COCH/ 2013 2 SHEET AS ON 31.3.2012 CERTIFIED BY THE CHARTERED ACCOUNTANT. THIS HAS BEEN POINTED OUT TO THE AUTHORIZED REPRESENTATIVE WHO HAS NOT OFFERED ANY EXPLANATION IN THIS REGARD. 5 THE MAIN SOURCE OF INCOME OF THE TRUST IS FOUND TO BE DONATION. AS PER THE LETTER DATED 10.2.2013 FILED BY THE TRUST, IT STATED THAT THE FUNDS ARE EXPECTED FROM THE MEMBERS OF THE PANDIPILLY FAMILY AND IF POSSIBLE FROM OUTSI DE ALSO. IN OTHER LETTER DATED 9.3.2013, IT HAS BEEN DISCLOSED THAT THE MEMBERS OF THE TRUST ARE EITHER PENSIONERS OR HOUSEWIVES. AS SUCH THE MEMBERS OF THE TRUST DO NOT APPEAR TO BE WITH SUFFICIENT FUNDS AVAILABILITY TO RUN THIS TRUST AFTER MEETING THEIR HOUSEHOLD EXPENSES. THIS CREATES A DOUBT THAT THE TRUST INTENDS TO COLLECT PUBLIC MONEY WHICH CAN BE INDIRECTLY BENEFITED TO THE PERSONAL PURPOSE OF THE TRUSTEES. 6 UNDER THE ABOVE CIRCUMSTANCES, I AM NOT SATISFIED WITH THE GENUINENESS OF THE ACTIVITIES O F THE APPLICANT TRUST AND THEREFORE THE APPLICATION FILED BY ST JOSEPHS CHARITABLE TRUST FOR REGISTRATION U/ 12AA THE INCOME TAX ACT, 1961 IS REJECTED. 3 THE LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE MISTAKE POINTED OUT BY THE LD CIT(A) WITH REGAR D TO NON ACCOUNTING OF CORPUS FUND OF RS.1000/ - HAS SINCE BEEN RECTIFIED. FURTHER, HE SUBMITTED THAT THE LD CIT HAS REJECTED THE APPLICATION OF THE ASSESSEE ON SURMISES AND ASSUMPTION AND NOT BASED UPON ANY MATERIAL AVAILABLE ON RECORD. 4 BEFORE US, TH E LD A.R OF THE ASSESSEE FILED FINANCIAL STATEMENT S PERTAINING TO THE YEAR ENDING 31.3. 2012 AND 31.3.2013 SUBMIT TED THAT THE ASSESSEE TRUST HAS CARRIED OUT MANY CHARITABLE ACTIVITIES. WE NOTICE THAT THOUGH THE LD CIT HAS CONSIDERED THESE FINANCIAL STATEME NTS , YET, AS SUBMITTED BY LD COUNSEL FOR THE ASSESSEE, HE HAS PROCEEDED TO DOUBT ON THE TRUST ITSELF . IN OUR VIEW, THE APPROACH ADOPTED BY THE LD CIT DOES NOT APPEAR TO BE IN TERMS OF PROVISIONS OF SEC. 12AA OF THE ACT. THE LD CIT HAS NOT BROUGHT ON RECO RD ANY MATERIAL TO SUBSTANTIATE HIS DOUBT. UNDER THESE CIRCUMSTANCES, IN OUR VIEW, THE APPLICATION FILED BY THE ASSESSEE REQUIRES FRESH EXAMINATION. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LD CIT AND RESTORE THE MATTER TO HIS FILE WITH THE DIRECTION T O EXAMINE THE SAME IN TERMS OF PROVISIONS OF SEC. 12AA OF THE ACT AND TAKE APPROPRIATE DECISI ON IN ACCORDANCE WITH LAW. ITA NO. 343/ COCH/ 2013 3 5 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNC ED IN THE OPEN COURT ON THIS 13 TH DAY OF NOV 2013. SD/ - SD/ - (N.R.S. GANESAN) ( B.R. BASKARAN ) JUDICIAL MEMBER ACCOUNTANT MEMBER COCHIN: DATED : 13TH NOV 2013 RAJ* COPY TO: 1. APPELLANT ST . JOSEPHS CHARITABLE TRUST, PANDIPILLY HOUSE, CHETTIKAD KUNJITHAI PO, NORTH PARAVOOR, ERNAKULUM 2. RESPONDENT CIT, KOCHI 3. CIT(A) 4. CIT , COCHI 5. DR 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT, COCHIN