Shri Kala Vardhan Education Trust, RAJKOT-GUJARAT V. The Commissioner of Income Tax-III, RAJKOT-GUJARAT

ITA 382/RJT/2013

• Counselvise Citation: 38224914 RSA 2013
• Duration Of Justice: 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 31-12-2013
• Assessment Year: misc
• Appeal Filed On: 18-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N R SONI DR
• Assessee Lawyers: D M THAKKAR
• Keywords: Charitable institution
• Section: 12AA

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH, RAJKOT BEFORE SHRI T. K. SHARMA, JM AND SHRI B. R. JAIN, A M ITA NO. 382/RJT/2013 SHRI KALA VARDHAN EDUCATION TRUST, 1, DEVPARA, OPP. DEVPARA BUS STATION, KOTHARIYA MAIN ROAD, RAJKOT PAN : AAATK 6224 C ( / APPELLANT) THE COMMISSIONER OF INCOME-TAX RAJKOT III, RAJKOT / RESPONDENT !' / ASSESSEE BY SHRI D.M. THAKKAR, CA #$ !' / REVENUE BY SHRI N. R. SONI, DR ! % $& ' / DATE OF HEARING 31.12.2013 () ' / DATE OF PRONOUNCEMENT 09.01.2014 / ORDER .. , / T. K. SHARMA, J. M.: THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DATED 24.09.2013 OF LD. COMMIS SIONER OF INCOME-TAX, RAJKOT-III, RAJKOT REFUSING TO GRANT REGISTRATION U/S 12AA OF T HE INCOME -TAX ACT 1961READ WITH RULE 17A OF THE INCOME-TAX RULES, 1962. 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 IN THE OFFICE OF COMMISSIONER OF INCOME-TAX, RAJKOT-III, RAJKOT ON 03.03.2013 ALO NGWITH THE REQUISITE DOCUMENTS. ON PERUSAL OF THE TRUST DEED, THE LD. COMMISSIONER OF INCOME-TAX NOTICED THAT MAIN OBJECTS OF THE TRUST ARE EDUCATIONAL. THE TRUST RUNS A SCHO OL IN THE NAME OF PATANJALI VIDHYALAYA MADHYAMIK SHALA, RAJKOT. IN PARAGRAPH NO.4 OF THE I MPUGNED ORDER, THE LD. COMMISSIONER OF INCOME-TAX OBSERVED THAT TRUST DEED OF THE TRUST IS INCOMPLETE SO FAR AS NO CLAUSE REGARDING ITS ASSETS AFTER MEETING ALL LIABILITIES, IN CASE OF DISSOLUTION, IS INCORPORATED. ACCORDING TO HIM, IN THE ABSENCE OF A DEQUATE DISSOLUTION/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. THEREFORE, THE ASSESSEE-TRUST IS NOT ENTITLED TO REGISTRATION U/S 12AA OF THE INCOME -TAX ACT, 1961. APART FROM THIS, THE LD. COMMISSIONER OF INCOME-TAX ALSO OBSERVED THAT THE A SSESSEE TRUST DID NOT PRODUCE THE EVIDENCES IN RESPECT OF THE EXPENSES INCURRED TOWAR DS ITS OBJECTS AND ALSO FAILED TO 382-RJT-2013 - SHRI KALA VARDHAN EDUCATION TRUST 2 PRODUCE THE BOOKS OF ACCOUNTS, LEDGER ACCOUNTS OF E XPENSES, DONATION RECEIPTS BOOKS ETC. THEREFORE, IN THE ABSENCE OF THE SAME, THE ACT IVITIES OF THE ASSESSEE-TRUST/INSTITUTION CANNOT BE VERIFIED. AGGRIEVED WITH THE ORDER OF L D. COMMISSIONER OF INCOME-TAX IN REFUSING TO GRANT THE REGISTRATION U/S 12AA, THE AS SESSEE INSTITUTION/ASSOCIATION IS IN APPEAL BEFORE THIS TRIBUNAL. 3. AT THE TIME OF HEARING BEFORE US, ON BEHALF OF T HE ASSESSEE, SHRI D.M. THAKKAR, CA, APPEARED AND PRODUCED A COPY OF THE DECISION OF ITAT C BENCH OF AHMEDABAD IN THE CASE OF SITARAM KUTIR CHARITABLE TRUST V. CIT I N ITA NO.71/AHD/2013, WHEREIN THE TRIBUNAL HAS RELIED UPON THE DECISION OF HONBLE DE LHI HIGH COURT IN THE CASE OF SHRI SAI SAMARPAN TRUST CO. V. CIT, REPORTED IN (2009) 23 DT R 125 (DELHI). THE RELEVANT PORTION OF THE DECISION IS REPRODUCED HEREUNDER:- .WHEREIN THE CIT(A) HAD REJECTED THE REGISTRATION ON THE GROUND THAT THE TRUST- DEED DID NOT CONTAIN THE PROVISION OF ASSETS' TREAT MENTS ON DISSOLUTION. THE OBSERVATION OF THE HON'BLE COURT IS THAT THE TRUST BEING REGISTERED WITH THE SUB- REGISTRAR AS A CHARITABLE TRUST AND THE TRUST BEING AN IRREVOCABLE TRUST THE OBVIOUS POSITION SHALL BE THAT THE CHARITY COMMISSIONER SHO ULD TAKE OVER THE ASSETS ON DISSOLUTION, HENCE REJECTION OF REGISTRATION BY THE LD. COMMISSIONER ON THE GROUND THAT THERE WAS NO SPECIFIC CLAUSE IN THE INSTRUMENT IN REGARD TO THE TREATMENT TO BE GIVEN IN THE EVENT OF DISSOLUTION WAS NOT ON A S OUND FOOTING. THE HON'BLE COURT HAS FINALLY HELD THAT CONSIDERING THE CLAUSES OF THE TRUST-DEED AND OTHER ACTIVITIES THE TRUST WAS GENUINE AND ENTITLED FOR R EGISTRATION U/S.12AA OF IT ACT. RESPECTFULLY FOLLOWING THIS DECISION AND THE RATIO LAID DOWN IN OTHER CITED DECISIONS, WE HEREBY HOLD THAT THE REASON GIVEN BY THE LD. COMMISSIONER FOR REJECTION OF REGISTRATION U/S.12AA WAS NOT AS PER L AW, HENCE DISMISSED. THE LD. COUNSEL OF THE ASSESSEE POINTED OUT THAT I N THE IMPUGNED ORDER THE LD. COMMISSIONER OF INCOME-TAX REFUSED THE REGISTRATION WITHOUT APPLYING MIND TO THE OBJECTS; THEREFORE THE MATTER BE RESTORED TO HIS FI LE FOR RECONSIDERING THE REQUEST OF THE ASSESSEE FOR GRANT OF REGISTRATION U/S 12AA . THE L D. COUNSEL OF THE ASSESSEE ALSO ASSURED THAT HE WILL PRODUCE ALL THE BOOKS OF ACCOU NTS ETC. BEFORE THE LD. COMMISSIONER OF INCOME-TAX FOR HIS EXAMINATION. 4. ON THE OTHER HAND, SHRI N.R. SONI, DR, APPEARED ON BEHALF OF THE REVENUE, VEHEMENTLY SUPPORTED THE ORDER OF LD. COMMISSIONER OF INCOME-TAX. HE CONTENDED THAT THE DECISION OF ITAT C BENCH OF AHMEDABAD IN THE CASE OF SITARAM KUTIR CHARITABLE TRUST V. CIT (SUPRA) WAS NOT CITED BEFORE HIM; THER EFORE, THE VIEW TAKEN BY THE LD. COMMISSIONER OF INCOME-TAX BE UPHELD. 382-RJT-2013 - SHRI KALA VARDHAN EDUCATION TRUST 3 5. RIVAL SUBMISSIONS WERE CONSIDERED. THE LD. COMMI SSIONER OF INCOME-TAX PASSED THE IMPUGNED ORDER ON 24.09.2013. THE DECISION OF I TAT C BENCH OF AHMEDABAD IN THE CASE OF SITARAM KUTIR CHARITABLE TRUST V. CIT ( SUPRA) IS DELIVERED ON 17.05.2013. ADMITTEDLY, THE DECISION OF ITAT C BENCH OF AHMED ABAD IN THE CASE OF SITARAM KUTIR CHARITABLE TRUST V. CIT (SUPRA) WAS NOT AVAILABLE W HEN THE LD. COMMISSIONER OF INCOME- TAX PASSED THE IMPUGNED ORDER. WE, THEREFORE, IN TH E INTEREST OF JUSTICE, SET ASIDE THE IMPUGNED ORDER OF LD. COMMISSIONER OF INCOME-TAX AN D DIRECT HIM TO DECIDE THE APPLICATION OF THE ASSESSEE AFRESH KEEPING IN VIEW THE RATIO OF JUDGMENT OF ITAT C BENCH OF AHMEDABAD IN THE CASE OF SITARAM KUTIR CHA RITABLE TRUST V. CIT (SUPRA). THE ASSESSEE SHALL ALSO PRODUCE ALL THE BOOKS OF ACCOUN TS AND OTHER DOCUMENTS AS MAY BE REQUIRED BY THE LD. COMMISSIONER OF INCOME-TAX, WHO WILL IN TURN CONSIDER THE ENTIRE MATTER AFRESH IN ACCORDANCE WITH LAW AFTER GIVING O PPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TRE ATED AS ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER PRONOUNCED IN OPEN COURT ON THE DATE MEN TIONED HEREINABOVE. SD/- SD/- (B. R. JAIN) (T. K. SHARM A) '' !*# / ACCOUNTANT MEMBER !*# /JUDICIAL MEMBER *'+ ,*-/ ORDER DATE 09.01.2014 /RAJKOT *BT / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT- SHRI KALA VARDHAN EDUCATION TRUST, KOT HARIYA MAIN ROAD, RAJKOT 2. /RESPONDENT- THE COMMISSIONER OF INCOME-TAX, RAJKOT III,RAJKOT 3. !-2- % 3 / CONCERNED CIT, RAJKOT 4 . 4$56 , , / DR, ITAT, RAJKOT 5 . 67 89 / GUARD FILE. *'+ !' / BY ORDER , TRUE COPY PRIVATE SECRETARY, , INCOME TAX APPELLATE TRIBUNAL, RAJKOT.