KAMALA NEVATIA CHARITABLE TRUST, MUMBAI V. DIT (E), MUMBAI

ITA 3574/MUM/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8623 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 26-03-2015
• Assessment Year: 2013-2014
• Appeal Filed On: 07-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R P MEENA
• Assessee Lawyers: N SUBRAMANIAN
• Keywords: Charitable institution
• Section: 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUM BAI , , BEFORE S/SHRI RAJENDRA, A.M. AND SANJAY GARG,J.M. ./ITA NO.3574/MUM/2013, / ASSESSMENT YEAR: 2013-14 KAMLA NEVATIA CHARITABLE TRUST 85, PITALE PRASAD WORLI SEAFACE, WORLI MUMBAI-400 030. VS. DIRECTORATE OF INCOME TAX (EXEMPTION) 6TH FLOOR, PIRAMAL CHAMBERS, PAREL MUMBAI-400 012. PAN: AABTK 8231 E ( /APPELLANT ) ( / RESPONDENT ) REVENUE BY: SHRI R.P. MEENA ASSESSEE BY: SHRI N. SUBRAMANIAN / DATE OF HEARING: 18.01.2017 / DATE OF PRONOUNCEMENT: 10.02.2017 ,1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) , -PER RAJENDRA,AM: CHALLENGING THE ORDER DT.21/04/2013 OF THE DIRECTOR OF INCOME TAX-EXEMPTION,MUMBAI (DIT- E), ASSESSEE HAS FILED THE PRESENT APPEAL. 2. EFFECTIVE GROUND OF APPEAL IS ABOUT REJECTING THE A PPLICATION OF REGISTRATION FILED BY THE ASSESSEE.VIDE ITS APPLICATION,DATED 12.09.2012,THE ASSESSEE REQUESTED THE DIT-E TO GRANT REGIS -TRATION.BY HIS NOTICE,DT.10.11.2012,HE DIRECTED AS SESSEE TO FURNISH CERTAIN DETAIL/DOCUMENTS INCLUDING THE NOTE ON ACTIVITIES UNDERTAKEN BY IT.H E ALSO DIRECTED THE MANAGING-TRUSTEE TO ATTEND HIS OFFICE ON 4.1.2013. 2.1. AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE,TH E DIT-E HELD THAT IN ORDER TO BE ELIGIBLE FOR REGISTRATION THE ASSESSEE HAD TO BE VA LIDLY CONSTITUTED PUBLIC CHARITABLE TRUST, THAT PERUSAL OF TRUST DEED REVEALED THAT THERE WAS NO D ISSOLUTION-CLAUSE TO THE EFFECT THAT TRUST WAS IRREVOCABLE, THAT THE ABSENCE OF DISSOLUTION CLAUSE WAS AGAINST THE PROVISIONS OF BOMBAY PUBLIC TRUST ACT,1950, THAT CLAUSE 13(F) OF THE TRU ST DEED DECLARED THE APPLICANT TRUST TO BE IRREVOCABLE FOR ALL TIMES, THAT THE IRREVOCABILITY WAS ALWAYS QUA THE SETTLER, THAT THE SAID CLAUSE COULD NOT BE TREATED A SUBSTITUTE FOR PROVISION IMP OSING AN EMBARGO ON THE TRUSTEE ON DISTRIBUTION OF TRUST PROPERTY AMONG THEMSELVES IN CASE OF DISSOLUTION/ WINDING UP OF THE TRUST,THAT IN THE TRUST-DEED THERE HAD TO BE A SPEC IFIC MENTION ABOUT THE DISSOLUTION OF THE PROPERTY ON WINDING UP OF THE TRUST.THE DIT-E MADE A REFERENCE TO THE PROVISION OF BOMBAY PUBLIC TRUST ACT AND HELD THAT A TRUST WAS A PERPET UAL ENTITY,THAT IF THE TRUSTEES WERE UNABLE TO 3574/M/13(13-14) KAMLANC(TRUST) 2 CARRY OUT THE OBJECTS OF THE TRUST IT HAD TO BE DIS SOLVED OR WOUND UP,THAT ON ITS WINDING UP ITS CORPUS AND PROPERTY HAD TO BE TRANSFERRED TO ANOTHE R TRUST HAVING SIMILAR OBJECTS WITH SANCTION OF THE CHARITY COMMISSIONER, THAT NO SUCH CLAUSE WA S FOUND TO BE IN THE TRUST DEED, THAT THE ASSESSEE COULD NOT BE SAID TO HAVING CONSTITUTED AS A VALID PUBLIC CHARITABLE TRUST.HE REJECTED THE APPLICATION FILED BY THE ASSESSEE FOR REGISTRAT ION U/S.12AA OF THE ACT. 3. BEFORE US,THE AUTHORISED REPRESENTATIVE(AR)STATED THAT ISSUE STAN DS COVERED BY THE ORDERS OF THE TRIBUNAL DELIVERED IN THE CASES OF RAMA RASHMI CHHAGANLAL WAGHWALA CHARITABLE TRUST (ITA/4509/MUM/2013,DTD.22-04-2015);GEETA LALWANI FO UNDATION(ITA/3566/MUM/2013,DTD. 02.012015).THE DEPARTMENTAL REPRESENTATIVE(DR)SUPPO RTED THE ORDER OF THE DIT-E. 4.WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE AVAILABLE MATERIAL.WE FIND THAT IDENTICAL ISSUE WAS DEALT BY THE TRIBUNAL IN THE CA SE OF RAMA RASHMI CHHAGANLAL WAGHWALA CHARITABLE TRUST (SUPRA)IN FOLLOWING MANNER: 3.DURING THE COURSE OF HEARING BEFORE US AUTHORIS ED REPRESENTATIVE(AR)STATED THAT THE TRUST DEED WAS EXECUTED ON 23.5.2011,THAT THE TRUST WAS R EGISTERED WITH THE CHARITY COMMISSIONER MUMBAI UNDER BOMBAY PUBLIC TRUST ACT ON 25/5/2005, THAT IT MADE AN APPLICATION FOR REGISTRATION U/S. 12A OF THE ACT ON 4.10. 2012,THAT UNDER THE CLAUSE 13(F) OF THE DEED IT WAS CLEARLY MENTIONED THAT THE TRUST WAS IRREVOCABLE FO R ALL TIME,THAT AS PER CLAUSE 13(A)OF THE DEED THE TRUSTEES WERE EMPOWERED TO TAKE OVER/AMALG AMATE WITH ANY OTHER TRUST SOCIETY OR INSTITUTION,THAT THERE WAS NO NEED TO PROVIDE FOR A SEPARATE DISSOLUTION CLAUSE IN THE DEED, THAT THE REGISTRATION U/S. 12AA OF THE ACT COULD NOT BE DISALLOWED ON THE BASIS OF ABSENCE OF DISSOLUTION CLAUSE.THE AR RELIED UPON THE CASE OF T ARA EDUCATION AND CHARITABLE TRUST (ITA/1247/MUM/2013 DT.18.7.2014 AY 2013-14).HE ALSO RELIED UPON CASE OF GEETA LALWANI FOUNDATION(ITA/3566/MUM/2013 AY 2013-14 DT. 2.1.201 5).DEPARTMENTAL REPRESENTATIVE (DR)SUPPORTED THE ORDER OF THE DIT(E). 4.WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE MATERIAL BEFORE US.WE FIND THAT THE DIT-E HAD DENIED THE REGISTRATION TO THE ASSESSEE-T RUST BECAUSE HE WAS OF THE OPINION THAT IN ABSENCE OF THE DISSOLUTION-CLAUSE ASSESSEE-TRUST WA S NOT ENTITLED FOR REGISTRATION.WE FIND THAT IN THE CASE OF TARA EDUCATION AND CHARITABLE TRUST AND GEETA LALWANI FOUNDATION (SUPRA), THE TRIBUNAL HAD HELD THAT ABSESNCE OF DISSOLUTION DEED COULD NOT BE THE BASIS FOR REFUSING REGISTRATION TO A TRUST. IN THE CASE OF GEETA LALWA NI FOUNDATION(SUPRA), THE TRIBUNAL HAS HELD AS UNDER :- 'REGARDING THE DISSOLUTION CLAUSE NOTHING IS BROUGH T ON RECORD EVEN BEFORE US THAT THE BOMBAY PUBLIC TRUST ACT, 1950 MANDATES FOR INCORPOR ATION OF MANDATORY CLAUSE OF DISSOLUTION OF ANY IRREVOCABLE TRUST. THEREFORE, IN OUR OPINION, THE DECISION OF THE DIT(E) REJECTING THE REGISTRATION U/S.12A WAS REQUI RED TO BE REVERSED. ACCORDINGLY, GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED.' RESPECTFULLY FOLLOWING THE ABOVE REFERRED TWO DECIS IONS OF THE TRIBUNAL,WE DECIDE THE EFFECTIVE GROUND OF THE ASSESSEE IN FAVOUR OF THE ASSESSEE AN D DIRECT THE DIT(E) TO GRANT REGISTRATION TO THE ASSESSEE-TRUST. AS A RESULT, APPEAL FILED BY THE ASSESSEE STANDS AL LOWED . CONSIDERING THE ABOVE,WE ALLOW THE EFFECTIVE GROUND OF APPEAL FILED BY THE ASSESSEE.DIT-E IS DIRECTED TO GRANT REGISTRATION TO THE ASSESSEE. 3574/M/13(13-14) KAMLANC(TRUST) 3 AS A RESULT,APPEAL OF THE ASSESSEE STANDS ALLOWED. . ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH FEBRUARY, 2017. , 2017 SD/- SD/- ( /SANJAY GARG) ( / RAJENDRA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; /DATED : 10.02.2017. JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR A BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.