Shri Hari Education & Charitable Trust, RAJKOT-GUJARAT V. The Commissioner of Income Tax-III, RAJKOT-GUJARAT

ITA 379/RJT/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 72635 (ITAT-RAJKOT)
• Duration Of Justice: 1 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 13-11-2013
• Assessment Year: misc
• Appeal Filed On: 14-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR M L MEENA
• Assessee Lawyers: APURVA N MEHTA
• Keywords: Charitable institution
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBULAL, SMC BENCH, RAJKOT BEFORE SHRI T. K. SHARMA, JM ITA NO. 379/RJT/2013 SHRI HARI EDUCATION & CHARITABLE TRUST KESHOD, JUNAGADH PAN : AAMTS 1044 G ( / APPELLANT) THE COMMISSIONER OF INCOME-TAX-III RAJKOT / RESPONDENT / ASSESSEE BY SHRI APURVA N MEHTA, ADVOCATE / REVENUE BY DR M L MEENA, DR / DATE OF HEARING 13.11.2013 !'# / DATE OF PRONOUNCEMENT 22.11.2013 / ORDER THIS APPEAL BY THE ASSESSEE-INSTITUTION/ASSOCIATION IS AGAINST THE ORDER DATED 19.08.2013 OF COMMISSIONER OF INCOME-TAX, RAJKOT-II I, RAJKOT REJECTING THE APPLICATION FOR REGISTRATION U/S 12AA OF THE INCOME -TAX ACT, 1961. 2. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE-INSTI TUTION/ASSOCIATION FILED AN APPLICATION FOR REGISTRATION U/S 12AA OF THE INCOME -TAX ACT, 1961 WITH COMMISSIONER OF INCOME-TAX, RAJKOT-III ALONGWITH FOLLOWING DOCUM ENTS:- A. FORM NO.10A B. XEROX COPY OF PAN C. COPY OF REGISTRATION CERTIFICATE WITH CHARITY CO MMISSIONER D. COPY OF TRUST DEED THIS INSTITUTION/ASSOCIATION CAME IN TO EXISTENCE B Y A TRUST DEED ON 07.07.2012 AND THE SAME WAS REGISTERED UNDER THE BPT ACT WITH ASSISTANT CHARITY COMMISSIONER VIDE CERTIFICATE DATED 25.09.2012. 3. THE LD COMMISSIONER OF INCOME-TAX, RAJKOT-III, O N VERIFICATION OF THE TRUST DEED, OBSERVED THAT THERE IS NO WINDING UP CLAUSE IN THE TRUST DEED. ON THIS BASIS, LD COMMISSIONER OF INCOME-TAX OBSERVED THAT THE TRU ST DEED OF THE TRUST IS INCOMPLETE SO FAR AS NO CLAUSE REGARDING ITS ASSETS AFTER MEET ING ALL LIABILITIES, IN CASE OF DISSOLUTION, IS INCORPORATED. ACCORDING TO HIM, IN ABSENCE OF ADEQUATE WINDING UP CLAUSE IN CASE OF DISSOLUTION OF TRUST, THE ARRANGE MENT OF DISPOSAL OF NET ASSETS AFTER MEETING ITS ALL LIABILITIES ARE NOT SPECIFIED IN TR UST DEED. 2 379-RJT-2013 - SHRI HARI EDUCATION & CHARITABLE TRUST 4. IN VIEW OF THE FOREGOING, THE LD COMMISSIONER OF INCOME-TAX VIDE HIS LETTER DATED 05.08.2013 ASKED THE ASSESSEE-INSTITUTION/ASS OCIATION TO SUBMIT THE FOLLOWING DETAILS/DOCUMENTS ON THE DATE OF HEARING FIXED ON 1 3.08.2013. I) THE ORIGINAL TRUST DEED AND THE REGISTRATION CER TIFICATE ISSUED BY THE CHARITY COMMISSIONER UNDER THE BPT ACT. II) THE BOOKS OF ACCOUNTS FOR THE F.Y. 2012-13 ALON G WITH THE BILLS AND VOUCHERS IN SUPPORT OF THE EXPENDITURES MADE TOWARD S THE OBJECT OF THE TRUST. III) THE DETAILS OF THE TRUSTEES VIZ A VIZ SOURCE O F INCOME, DETAILS OF INCOME TAX ASSESSIBILITY ALONGWITH THE COPY OF ACCOUNTS FOR TH E F.Y. 2012-13. IV) THE NOTES ON CHARITABLE ACTIVITIES CARRIED OUT SINCE ITS INCEPTION ALONGWITH THE DOCUMENTARY EVIDENCES. V) THE NOTES ON ROLE OF THE EACH TRUSTEE IN CARRYIN G OUT THE CHARITABLE ACTIVITIES TOWARDS THE OBJECTS OF THE TRUST. 5. ON THE DATE FIXED FOR HEARING BEFORE THE LD COMM ISSIONER OF INCOME-TAX, I.E. 13.08.2013, NEITHER THE ASSESSEE ATTENDED/FURNISHED THE REQUIRED DETAILS CALLED FOR NOR ANY ADJOURNMENT WAS SOUGHT FOR TILL THE LD CIT PASSED THE IMPUGNED ORDER ON 19.08.2013. HE ACCORDINGLY PRESUMED THAT ASSESSEE-I NSTITUTION/ASSOCIATION IS NO MORE INTERESTED IN FURNISHING THE REQUIRED DETAILS CALLED FOR AND ACCORDINGLY REJECTED THE APPLICATION OF THE ASSESSEE-INSTITUTION/ASSOC IATION FOR THE DETAILED REASON GIVEN IN PARAGRAPHS 4 AND 5 OF THE IMPUGNED ORDER, WHICH READ AS UNDER:- 4. THE ASSESSEE TRUST IS CREATED ON 07.07.2012 BY TRUST DEED. ON VERIFICATION OF THE COPY OF THE TRUST DEED IT IS OB SERVED THAT THERE IS NO WINDING UP CLAUSE IN THE TRUST DEED. THE TRUST DEED OF THE TRUST IS INCOMPLETE SO FAR AS NO CLAUSE REGARDING ITS ASSETS AFTER MEETING ALL LI ABILITIES, IN CASE OF DISSOLUTION, IS INCORPORATED. IN ABSENCE OF ADEQUATE WINDING UP CLAUSE IN CASE OF DISSOLUTION OF TRUST, THE ARRANGEMENT OF DISPOSAL O F NET ASSETS AFTER MEETING ITS ALL LIABILITIES ARE NOT SPECIFIED IN TRUST DEED. HE NCE THE SAME DOES NOT QUALIFY FOR REGISTRATION U/S 12AA OF THE ACT. 5. ACCORDINGLY, ASSESSEES APPLICATION FOR REGISTRA TION U/S 12AA OF THE ACT IS HEREBY REJECTED. AGGRIEVED WITH THE ORDER OF LD COMMISSIONER OF INC OME-TAX, RAJKOT-III REJECTING THE APPLICATION U/S 12AA, THE ASSESSEE-INSTITUTION/ ASSOCIATION IS NOW IN APPEAL BEFORE THIS TRIBUNAL. 3 379-RJT-2013 - SHRI HARI EDUCATION & CHARITABLE TRUST 6. BEFORE THE TRIBUNAL, ON BEHALF OF THE ASSESSEE, SHRI APURVA N. MEHTA, ADVOCATE APPEARED AND POINTED OUT THAT THE LD COMMI SSIONER OF INCOME-TAX HAS NOT ALLOWED ADEQUATE TIME TO PRODUCE THE VARIOUS DETAIL S/DOCUMENTS. HE POINTED OUT THAT THE DATE OF SHOW-CAUSE NOTICE ASKING FOR VARIOUS DE TAILS/DOCUMENTS WAS OF DATED 05.08.2013 WHEREAS THE DATE OF HEARING FIXED WAS OF DATED 13.08.2013. THE COUNSEL OF THE ASSESSEE FURTHER RELIED UPON THE FOLLOWING T WO DECISIONS OF THE ITAT AHMEDABAD BENCH:- 1. SHREE CHARGAM DASHA PORWAD MOHAMANDAL V. DIT (E XEMPTION) IN ITA NO.337 & 338/AHD/2013, DECIDED ON 08.05.2013. 2. SITARAM KUTIR CHARITABLE TRUST V. CIT IN ITA NO. 71/AHD/2013, DECIDED ON 17.05.2013 REFERRING TO RELEVANT PORTION OF AFORESAID ORDERS, LD COUNSEL OF THE ASSESSEE POINTED OUT THAT IN BOTH THE AFORESAID DECISIONS IT IS HELD THAT IN CASE THE TRUST REGISTERED WITH THE SUB-REGISTRAR AS A CHARITABLE T RUST AND THE TRUST BEING AN IRREVOCABLE TRUST, THE OBVIOUS POSITION SHALL BE TH AT THE CHARITY COMMISSIONER SHOULD TAKE OVER THE ASSETS ON DISSOLUTION; HENCE REJECTIO N OF REGISTRATION BY THE LD COMMISSIONER ON THE GROUND THAT THERE WAS NO SPECIF IC CLAUSE IN THE INSTRUMENT IN REGARD TO THE TREATMENT TO BE GIVEN IN THE EVENT OF DISSOLUTION WAS NOT ON A SOUND FOOTING. WITHOUT PREJUDICE TO THIS CONTENTION, THE LD COUNSEL OF THE ASSESSEE POINTED OUT THAT THE ASSESSEE-INSTITUTION/ASSOCIATION IS WI LLING TO AMEND THE TRUST DEED AND SHALL ALSO MADE ALL THE DETAILS AVAILABLE PROVIDED PROPER OPPORTUNITY IS ALLOWED BY THE LD COMMISSIONER OF INCOME-TAX IN THIS REGARD. 7. ON THE OTHER HAND, DR M L MEENA, DR, APPEARED O N BEHALF OF THE REVENUE VEHEMENTLY SUPPORTED THE ORDER OF LD COMMISSIONER O F INCOME-TAX. HE POINTED OUT THAT THE LETTER ASKING FOR VARIOUS DETAILS/DOCUMENT S WAS ISSUED ON 05.08.2013, FIXING THE CASE ON 13.08.2013; THEREFORE, ADEQUATE TIME WA S ALLOWED TO THE ASSESSEE. WITH REGARD TO THE TWO DECISIONS OF AHMEDABAD ITAT BENCH (SUPRA) RELIED UPON BY THE LD COUNSEL OF THE ASSESSEE, THE LD DEPARTMENTAL REPRES ENTATIVE POINTED OUT THAT BOTH THE AFORESAID DECISIONS WERE DELIVERED AFTER THE IM PUGNED ORDER OF LD COMMISSIONER OF INCOME-TAX, WHICH IS DATED 19.08.2013. HENCE, TH ESE WERE NEVER PRODUCED BEFORE THE LD COMMISSIONER OF INCOME-TAX, RAJKOT-III, RAJK OT. 4 379-RJT-2013 - SHRI HARI EDUCATION & CHARITABLE TRUST 8. HAVING HEARD BOTH THE SIDES, I HAVE CAREFULLY GO NE THROUGH THE IMPUGNED ORDER OF THE LD COMMISSIONER OF INCOME-TAX. IT APPE ARS THAT LD COMMISSIONER OF INCOME-TAX, RAJKOT-III ISSUED A LETTER DATED 05.08. 2013 ASKING FOR SUBMISSION OF VARIOUS DETAILS/DOCUMENTS BY FIXING THE CASE ON 13. 08.2013. IT IS NOT KNOWN WHEN THIS NOTICE WAS SERVED ON THE ASSESSEE-INSTITUTION/ASSOC IATION. NO FURTHER SHOW-CAUSE NOTICE WAS ISSUED TO THE ASSESSEE-INSTITUTION/ASSOC IATION. THE TIME ALLOWED FOR SUBMITTING VARIOUS DETAILS/DOCUMENTS AS LISTED OUT ABOVE WAS NOT ADEQUATE, THEREFORE, IN THE INTEREST OF JUSTICE, I SET ASIDE THE IMPUGNED ORDER OF LD COMMISSIONER OF INCOME-TAX, RAJKOT-III AND DIRECT HIM TO ALLOW O NE MORE OPPORTUNITY TO THE ASSESSEE-INSTITUTION/ASSOCIATION TO FURNISH THE VAR IOUS DETAILS/DOCUMENTS AS REQUIRED BY HIM VIDE HIS LETTER DATED 05.08.2013. THE ASSESS EE IS AN EDUCATIONAL AND CHARITABLE TRUST AND ISSUANCE OF REGISTRATION U/S 1 2AA IS A PRIMARY CONDITION FOR THE START OF THE CHARITABLE ACTIVITY OF THE TRUST, THER EFORE ITS CASE HAS TO BE DECIDED ON PRIORITY BASIS. I, THEREFORE, DIRECT THE ASSESSEE-I NSTITUTION/ASSOCIATION TO SUO MOTU APPEAR BEFORE THE LD COMMISSIONER OF INCOME-TAX, RA JKOT-III WITHIN 15 DAYS ON RECEIPT OF THIS ORDER OF THE TRIBUNAL WITHOUT WAITING FOR A NY NOTICE FROM THE REVENUE DEPARTMENT AND SUBMIT ALL THE NECESSARY DETAILS/DOC UMENTS WHICH ARE REQUIRED BY THE LD COMMISSIONER OF INCOME-TAX, RAJKOT-III VIDE HIS LETTER DATED 05.08.2013. ON RECEIPT OF THOSE DETAILS/DOCUMENTS, THE LD COMMISSI ONER OF INCOME-TAX, RAJKOT-III SHALL PASS AN APPROPRIATE ORDER AS PER LAW AS DEEME D FIT WITHIN A REASONABLE TIME. WITH THESE DIRECTIONS, ASSESSEES APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER PRONOUNCED IN OPEN COURT ON THE DATE MEN TIONED HEREINABOVE. SD/- ( $.. &' / T. K. SHARMA) ( ) /JUDICIAL MEMBER *)& +) ,/ ORDER DATE: 22.11.2013 !$ /RAJKOT *BT 5 379-RJT-2013 - SHRI HARI EDUCATION & CHARITABLE TRUST / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT- SHRI HARI EDUCATION & CHARITABLE TRUS T, KESHOD, JUNAGADH 2. / RESPONDENT- THE COMMISSIONER OF INCOME-TAX-III, RAJKOT 3. ,0,1 * * 2 / CONCERNED JT. CIT, RANGE 1 & 2, JUNAGADH 4 . 345 1, * 1#, !$ / DR, ITAT, RAJKOT 5 . 57 89 / GUARD FILE *)& / BY ORDER TRUE COPY PRIVATE SECRETARY, ITAT, RAJKOT