Indo Swedish Rheumatology Foundation, Balasore V. CIT(Exemptions), Hyderabad

ITA 381/CTK/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5322 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2016-2017
• Appeal Filed On: 26-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S.K.BANDYOPADHYAY
• Keywords: Set aside
• Section: 201; 20

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK BEFORE SHRI N.S.SAINI, AM & SHRI PAV AN KUMAR GADALE, JM INCOME TAX APPEAL NO. 354 & 381 / CTK /20 1 6 ( / A SSESSMENT YEAR : 20 16 - 201 7 ) INDO SWEDISH RH EUMATOLOGY FOUNDATION, AT/PO: BADA SINDHIA, VIA - MOTIGANJ, DISTRICT - BALASORE - 756003 VS. CIT(EXEMPTIONS), HYDERABAD. ./ ./ PAN/GIR NO. : A A BTI 1523 K ( / APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI P.K.MISHRA , AR /REVENUE BY : SHRI S.K.BANDYOPADHYAY , DR / DATE OF HEARING : 11 / 12 /201 7 / DATE OF PRONOUNCEMENT 11 / 12 /201 7 / O R D E R PER SHRI N.S.SAINI , A M : TH ESE ARE THE APPE ALS FILED BY THE ASSESSEE AGAINST THE ORDER S OF THE CIT( E ) , HYDERABAD BOTH DATED 23.05.2016 . 2. THE GRIEVANCE IN BOTH THE APPEALS OF THE ASSESSEE IS THAT THE CIT(E) WAS NOT JUSTIFIED IN REFUSING TO GRANT REGISTRATION U/S.12AA AND APPROVAL U/S.80G OF THE I .T.ACT TO THE ASSESSEE TRUST. 3. BRIEF FACTS OF THE CASE ARE THAT THE CIT(E) REFUSED TO GRANT REGISTRATION U/S.12AA OF THE ACT TO THE ASSESSEE TRUST ON TWO GROUNDS : - I) THE AMENDMENT CLAUSE IN THE TRUST DEED DOES NOT SPECIFICALLY STIPULATE THAT THE AMEND MENTS SHALL BE CARRIED OUT ONLY WITH THE PRIOR APPROVAL OF THE CIT(E). II) THE INVESTMENT CLAUSE HAS NOT BEEN INCORPORATED IN THE TRUST DEED, WHICH INDICATES THAT THE THERE IS NO INTENTION ON THE PART OF THE TRUST TO INVEST THE FUNDS IN THE MODES SPECIFIE D UNDER THE PROVISIONS OF SECTION 13(1)(D) R.W.S.11(5) OF THE I.T.ACT. 4. WITH REGARD TO THE FIRST OBJECTION OF THE CIT(E) THAT THE AMENDMENT CLAUSE IN THE TRUST DEED DOES NOT SPECIFICALLY PROVIDE THAT THE AMENDMENTS ITA NO. 354&381 /CTK/201 6 2 SHALL BE CARRIED OUT ONLY WITH THE PRI OR APPROVAL OF THE CIT(E), WE F IND THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THIS BENCH OF THE TRIBUNAL IN THE CASE OF BALASORE LAW COLLEGE VS. CIT(E), ITA NO.459/CTK/2015, ORDER DATED 15.02.2017 , WHEREIN IT WAS HELD THAT, TH E SCOPE OF ENQUIRY CONTEMPLATED U/S.12A OF THE ACT IS LIMITED TO THE EXTENT OF COMMISSIONER GETTING HIMSELF SATISFIED ABOUT OBJECT OF THE TRUST AND THE GENUINENESS OF ITS ACTIVITIES SO AS TO GRANT OR REFUSE THE REGISTRATION U/S.12A OF THE ACT. A PERUSAL OF THE IMPUGNED ORDER OF THE LD. DIT(EXEMPTIONS) SHOWS THAT HE HAS NOT RECORDED ANY ADVERSE COMMENT OR DIS - SATISFACTION ABOUT THE OBJECT OF TRUST OR GENUINENESS OF THE TRUST ACTIVITIES. HE HAS REFUSED TO GRANT THE REGISTRATION U/S.12A OF THE ACT ON THE GROUN D THAT ITS TRUST DEED DOES NOT CONTAIN DISSOLUTION CLAUSE. IN OUR OPINION, THE LD. DIT(EXEMPTIONS) THUS HAS CLEARLY GONE BEYOND THE SCOPE OF ENQUIRY CONTEMPLATED U/S.12A OF THE ACT AND HAS REFUSED TO GRANT THE REGISTRATION U/S.12A OF THE ACT TO THE ASSES SEE TRUST ON A TOTALLY IRRELEVANT GROUND WITHOUT POINTING OUT AS TO HOW HE W AS N OT SATISFIED EITHER ABOUT THE OBJECT OF THE TRUST OR THE GENUINENESS OF ITS ACTIVITIES. 5. WE FIND THAT IN THE PRESENT CASE ALSO THE CIT(E) HAS REFUSED TO GRANT REGISTRATION U/ S.12AA OF THE ACT TO THE ASSESSEE TRUST ON THE GROUND THAT AMENDMENT CLAUSE DOES NOT PROVIDE FOR PRIOR APPROVAL OF THE CIT(E) BEFORE CARRYING OUT THE AMENDMENT IN THE TRUST DEED. WE FIND THAT THERE IS NO SUCH PROVISION IN THE ACT FOR REFUSAL TO GRANT REGIS TRATION TO THE ASSESSEE TRUST. THUS, THE REFUSAL TO GRANT REGISTRATION ON THIS GROUND IS AN IRRELEVANT GROUND AND, HENCE, NOT SUSTAINABLE. ITA NO. 354&381 /CTK/201 6 3 6. WITH REGARD TO OBJECTION REGARDING INVESTMENT CLAUSE STATING THAT THERE WAS NO INTENTION ON THE PART OF THE ASSESS EE TRUST TO INVEST THE FUNDS IN THE MODES SPECIFIED UNDER THE PROVISIONS OF SECTION 13(1)(D) R.W.S. 11(5) OF THE ACT AND THAT NO INVESTMENT CLAUSE WAS INCORPORATED IN THE TRUST DEED, WE ARE OF THE CONSIDERED VIEW THAT THE INCOME TAX ACT PROHIBITS INVESTMEN T IN VIOLATION OF SECTION 13(1)(D) & 11(5) OF THE ACT AND THE TRUST DEED PROHIBITS SUCH AN INVESTMENT BY THE ASSESSEE TRUST AND, THEREFORE, REFUSAL TO GRANT REGISTRATION TO THE ASSESSEE TRUST ON THIS COUNT ALSO IS AN IRRELEVANT GROUND. HENCE, WE SET ASIDE THE ORDER OF CIT(E) ON THIS GROUND ALSO . WE THEREFORE, DIRECT THE CIT(E) TO GRANT REGISTRATION U/S.12AA OF THE ACT TO THE ASSESSEE TRUST. 7. WITH REGARD TO NOT GRANTING APPROVAL U/S.80G OF THE ACT, WE FIND THAT THE REASON GIVEN BY THE CIT(E) THAT HE HAS RE FUSED TO GRANT REGISTRATION U/S.12AA OF THE ACT, THEREFORE, CONSEQUENTLY HE HAD NOT GRANT ED APPROVAL U/S.80G OF THE ACT TO THE ASSESSEE TRUST. AS WE HAVE GRANTED REGISTRATION U/S.12AA OF THE ACT TO THE ASSESSEE TRUST, WE SET ASIDE THE ORDER OF CIT(E) ON HI S COUNT AND ALSO DIRECT THE CIT(E) TO GRANT APPROVAL U/S.80G OF THE ACT TO THE ASSESSEE TRUST AND ALLOW THE APPEAL OF THE ASSESSEE. 8. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11 / 1 2 /201 7 . SD/ - ( PAVAN KUMAR GADALE ) SD/ - (N. S. SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER CUTTACK ; DATED 11 / 1 2 /201 7 . . / PKM , SENIOR PRIVATE SECRETARY ITA NO. 354&381 /CTK/201 6 4 / COPY O F THE ORDER FORWARDED TO : / BY ORDER, ( SENIOR PRIVATE SECRETARY ) , / ITAT, CUTTACK 1. / THE APPELLANT - INDO SWEDISH RH EUMATOLOGY FOUNDATION, AT/PO: BADA SINDHIA, VIA - MOTIGANJ, DISTRICT - BALASORE - 756003 2. / THE RESPONDENT - CIT(EXEMPTIONS), HYDERABAD. 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, CUTTACK 6. / GUARD FILE. //TRUE COPY//