Divya Dhrushti Charitable Trust, Thane V. Commissioner of Income-tax, (Exemptions), Pune

ITA 411/PUN/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9362 (ITAT-PUNE)
• Duration Of Justice: 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 20-06-2019
• Assessment Year: misc
• Appeal Filed On: 13-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ROHAN NAVIN DEDHIYA
• Keywords: Charitable institution; Benefit of exemption
• Section: 12A; 12AA; 12; 11

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI ANIL CHATURVEDI, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.411/PUN/2019 DIVYA DHRUSHTI CHARITABLE TRUST, ADD. C/O.JITENDRA KIRTILAL BHANSALI EYE HOSPITAL, LIONS CLUB, S.NO.11, KALAMBHE, NEAR WATER TANK, GUJARATHI BAUG, SHAHPUR, THANE 421 601. PAN : AACTD1082D. . / APPELLANT V/S THE COMMISSIONER OF INCOME TAX (EXEMPTIONS), PUNE. . / RESPONDENT ASSESSEE BY : SHRI ROHAN NAVIN DEDHIYA. REVENUE BY : SHRI S.B. PRASAD. PER ANIL CHATURVEDI, AM : THIS APPEAL FILED BY THE ASSESSEE IS EMANATING OUT OF TH E ORDER OF COMMISSIONER OF INCOME TAX (EXEMPTIONS) PUNE DATED 28.02.2019 PASSED U/S 12AA(1)(B)(II) OF THE INCOME TAX ACT. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- ASSESSEE IS STATED TO BE A TRUST REGISTERED UNDER T HE BOMBAY PUBLIC TRUSTS ACT, 1950 VIDE REGISTRATION NUMBER A-8586/T HANE DATED 10.02.2014. IT HAD APPLIED FOR REGISTRATION U/S 12AA OF TH E ACT ON 26.03.2014 BEFORE CIT-I, THANE. VIDE NOTIFICATION NO.53/201 4 / DATE OF HEARING : 20.06.2019 / DATE OF PRONOUNCEMENT: 01.07.2019 2 DT.22.10.2014 THE CBDT CREATED THE EXEMPTIONS CHARGE A ND THE NEW JURISDICTION WAS VESTED WITH THE COMMISSIONER OF INCOME TA X (EXEMPTIONS)-PUNE. ASSESSEE SUBMITTED THAT NO REPLY WA S RECEIVED EITHER FROM CIT-I, THANE OR CIT(E), PUNE REGARDING THE AC CEPTABILITY OR OTHERWISE OF THE APPLICATION FILED BY THE ASSESSEE. ASSESSE E THEREAFTER ELECTRONICALLY AGAIN APPLIED FOR REGISTRATION VIDE APPLICATION D ATED 31.08.2018 BEFORE CIT(E), PUNE. CIT(E), PUNE VIDE ORDER DT.28.02.2019 REJECTED THE APPLICATION FOR GRANT OF REGISTRATION. AGGRIE VED BY THE ORDER OF CIT(E), PUNE ASSESSEE IS NOW BEFORE US AND HAS RAISED VARIOUS GROUNDS, WHICH ARE ARGUMENTATIVE IN NATURE AND THEREFORE NOT REPRODUCED AND THE ONLY GRIEVANCE OF THE ASSESSEE IS A BOUT THE REFUSAL OF GRANTING REGISTRATION U/S 12AA OF THE ACT. 3. BEFORE US, LD.A.R. POINTED TO THE OBJECTS OF THE TRUST AND SUBMITTED THAT ALL THE OBJECTS ARE CHARITABLE AND THAT CIT(E) HAS NOT EXPRESSED HIS RESERVATION ON ANY OBJECTS OF THE TRUST. HE FURTHER SUBMITTED THAT IT IS A SETTLED LAW THAT AT THE TIME OF REG ISTRATION, THE CIT IS ONLY REQUIRED TO LOOK AS TO WHETHER THE OBJECTS OF THE TRUST ARE CHARITABLE OR NOT AND THE ACTIVITIES ARE GENUINE AND HE IS NOT REQUIRED TO EXAMINE THE APPLICATION OF INCOME. HE FURTHER SUBMITTED THAT VARIOUS REQUIREMENTS RAISED BY LD.CIT(E) WERE PROVIDED BY THE ASSESSEE. HE FURTHER SUBMITTED THAT WITHOUT ISSUING ANY SHOW CAUSE NOTICE AND ONLY ON THE BASIS OF ASSUMPTIONS, LD.CIT(E), REJE CTED THE APPLICATION FILED BY THE ASSESSEE. HE FURTHER SUBMITTED THAT THE CIT(E) BE DIRECTED TO GRANT REGISTRATION TO THE ASSESSEE. LD . D.R. ON THE OTHER HAND, SUPPORTED THE ORDER OF LOWER AUTHORITIES. 3 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPEC T TO DENIAL OF CLAIM OF REGISTRATION U/S 12A OF THE ACT. THE REGISTRATION U/S 12A OF THE ACT CAN BE SOUGHT EITHER BY A TRUST OR BY AN INS TITUTION. IN ORDER TO AVAIL OF THE BENEFIT OF EXEMPTION U/S 11 OR 12 OF THE AC T, THE ACTIVITIES OF THE TRUST OR THE INSTITUTION MUST BE CHARIT ABLE OR FOR RELIGIOUS PURPOSES. THE CONDITIONS FOR APPLICABILITY OF SEC.11 A ND 12 ARE PROVIDED U/S 12 A AND ONE OF THE CONDITIONS IS THAT THE PERSON IN RECEIPT OF THE INCOME WHICH HE CLAIMS TO BE FOR CHARITABLE P URPOSES HAS TO MAKE AN APPLICATION FOR REGISTRATION OF THE TRUST O R THE INSTITUTION IN THE PRESCRIBED FORM AND IN THE PRESCRIBED M ANNER TO THE COMMISSIONER WITHIN THE PERIOD STIPULATED THEREIN. THE PROC EDURE FOR REGISTRATION OF THE TRUST OR THE INSTITUTION BY THE COMM ISSIONER IS PROVIDED U/S 12AA OF THE ACT. SEC.12AA(1) REQUIRES THE COMMISSIONER TO WHOM AN APPLICATION IS MADE FOR THE REGISTRATION OF A TR UST OR INSTITUTION TO SATISFY HIMSELF ABOUT THE GENUINENESS OF TH E ACTIVITIES OF THE TRUST OR THE INSTITUTION AS WELL AS THE OBJECTS OF T HE TRUST OR INSTITUTION AND FOR THAT PURPOSE COMMISSIONER IS VESTED W ITH POWER TO CALL FOR DOCUMENTS OR INFORMATION AND IS ALSO EMPOWERED TO MAKE SUCH INQUIRIES AS HE MAY DEEM NECESSARY IN THAT BEHALF. T HE COMMISSIONER IS THEREUPON EMPOWERED TO PASS AN ORDER I N WRITING EITHER REGISTERING AN INSTITUTION OR IF HE IS NOT SATISFIED AB OUT THE OBJECTS OF THE TRUST OR INSTITUTION AND OF THE GENUINENE SS OF ITS ACTIVITIES, TO PASS AN ORDER IN WRITING REFUSING TO REGISTER THE TRUST OR INSTITUTION. THUS IT CAN BE SEEN THAT AT THE TIME OF GR ANT OF REGISTRATION, THE COMMISSIONER IS NOT EMPOWERED TO EXAMINE THE APPLICATION OF INCOME. THE STAGE FOR CONSIDERATION OF THE RE LEVANCE OF 4 THE OBJECT OF THE TRUST AND THE APPLICATION OF ITS FUNDS A RISES AT THE TIME OF ASSESSMENT. WE FURTHER FIND THAT HONBLE KERALA HIGH COURT IN THE CASE OF SHRI ANJANEYA MEDICAL TRUST VS. CIT (2016) 382 ITR 399 (KER) ON THE ISSUE OF THE SCOPE OF INQUIRY BY CIT(A) FOR THE REGISTRATION U/S 12A AND 12AA HAS OBSERVED AS UNDER : IT IS CLEAR FROM A PLAIN READING OF SECTIONS 12A A ND 12AA OF THE ACT THAT WHAT IS INTENDED THEREBY IS ONLY A REGISTR ATION SIMPLICITER OF THE ENTITY OF A TRUST. THIS HAS BEE N MADE A CONDITION PRECEDENT FOR THE CLAIMING OF BENEFITS UN DER THE OTHER PROVISIONS OF THE ACT REGARDING EXEMPTION OF INCOME , CONTRIBUTION, ETC. NO EXAMINATION OF THE MODUS OF THE APPLICATION OF THE FUNDS OF THE TRUST OR AN EXAMINA TION OF THE ETHICAL BACKGROUND OF ITS SETTLERS IS CALLED FOR WH ILE CONSIDERING AN APPLICATION FOR REGISTRATION. THE STAGE FOR CON SIDERATION OF THE RELEVANCE OF THE OBJECT OF THE TRUST AND THE AP PLICATION OF ITS FUNDS ARISES AT THE TIME OF ASSESSMENT. WHERE BENE FITS ARE CLAIMED BY THE ASSESSEE IN TERMS OF SECTIONS 11 AND 12 OF THE ACT, THE QUESTION AS TO THE NATURE OF SUCH CONTRIBU TION AND INCOME CAN BE LOOKED INTO. AT THE TIME OF REGISTRA TION OF THE TRUST, GOING BY THE BINDING JUDGMENTS OF THE APEX C OURT, WHAT IS TO BE LOOKED INTO IS WHETHER THE TRUST IS A GENUINE ONE AND WHETHER IT IS A SHAM INSTITUTION FLOATED ONLY TO AV AIL THE BENEFITS OF EXEMPTION UNDER THE ACT. THERE IS NO SUCH FINDI NG IN THE IMPUGNED ORDER. 5. IN THE PRESENT CASE, WE FIND THAT THERE IS NO FINDING O F CIT(E) ON THE OBJECTS OF TRUST AS MANDATED BY THE PROVISIONS OF T HE ACT AS NOTED ABOVE. FURTHER IT IS ALSO NOT IN DISPUTE THAT ASSESSEE HAD MADE AN APPLICATION FOR REGISTRATION IN 2014 WHICH WAS NOT BEEN AC TED UPON AND THEREFORE ASSESSEE FILED 2 ND APPLICATION IN 2018. CONSIDERING THE TOTALITY OF THE AFORESAID FACTS, WE RESTORE THE ISSUE BACK TO CIT(E), PUNE TO DECIDE THE ISSUE OF REGISTRATION U/S 12AA OF TH E ACT IN ACCORDANCE WITH LAW AND AFTER GRANTING REASONABLE OPPOR TUNITY OF HEARING TO THE ASSESSEE. WE ALSO DIRECT THE CIT(E) TO DIS POSE OF THE APPLICATION WITHIN THREE MONTHS OF THE RECEIPT OF THE PRESE NT ORDER. THUS, THE GROUNDS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOS ES. 5 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 1 ST DAY OF JULY, 2019. SD/- SD/- ( VIKAS AWASTHY ) ( ANIL CHATURVEDI ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE; DATED : 1 ST JULY, 2019. YAMINI !'#$#%! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4 5. 6. THE CIT(E) - PUNE. THE ADDL.CIT(E), PUNE. !,# ! , / DR, ITAT, A PUNE; &'(/ GUARD FILE. / BY ORDER // TRUE COPY // ) *+, - / SR. PRIVATE SECRETARY # ! , / ITAT, PUNE.