P K VAKIL GAHMBAR FUND, SURAT V. COMMISSIONER OF INCOME TAX (EXEMPTION), AHMEDABAD

ITA 435/SRT/2019

AI Insights

The case involves two separate appeals by P. K. Vakil Gahambar Fund and P. K. Vakil Wakaf Fund against the orders of the CIT(Exemption), Ahmedabad, which had rejected their applications for registration under section 12AA of the Income Tax Act, 1961. The primary reason for rejection was the non-submission of a self-certified copy of the Public Trust Register (PTR), which led to the inability to verify the objects of the trusts with their activities. The trusts argued that the original registration certificates were not traceable at the time of application, prompting them to apply for fresh registrations. Subsequently, they located the original certificates and submitted them as additional evidence during the appellate proceedings.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 301757 (ITAT-SURAT)
• Duration Of Justice: 2 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 08-11-2022
• Assessment Year: misc
• Appeal Filed On: 22-09-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RASESH SHAH
• Keywords: Charitable institution; Principle of natural justice; Additional evidence; Reasonable cause
• Section: 11; 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JM & DR. A. L. SAINI, AM आयकर अपील सं./ITA No. 435/SRT/2019 (Physical Court Hearing) P. K. Vakil Gahambar Fund, 12/1214, P K Vakil Atashbehram, P K Vakil Street, Shahpore, Surat-395003. Vs. The CIT(Exemption), Ahmedabad. èथायीलेखासं./जीआइआरसं./PAN/GIR No.: AABTP1095K (Assessee) (Respondent) आयकर अपील सं./ITA No.436/SRT/2019 (Physical Court Hearing) P. K. Vakil Wakaf Fund, 12/1214, P K Vakil Atshbehram, P K Vakil Street, Shahpore, Surat-395003. Vs. The CIT(Exemption), Ahmedabad. èथायीलेखासं./जीआइआरसं./PAN/GIR No.: AABTP1096L (Assessee) (Respondent) Assessee by Shri Rasesh Shah, CA Respondent by Shri Ashok B. Koli, CIT-DR Date of Hearing 09/11/2022 Date of Pronouncement 21/12/2022 आदेश / O R D E R PER DR. A. L. SAINI, AM: Captioned two appeals filed by two different assessees-trusts, are directed against the separate orders passed by the Learned Commissioner of Income Tax (Exemption), Ahmedabad [in short “the ld. CIT(E)”], under section 12AA(1)(b)(ii) of the Income Tax Act, 1961 ( hereinafter referred to as the Act). 2. Since, the issues involved in these two appeals are common and identical; therefore, these appeals have been heard together and are being disposed of by this consolidated order. For the sake of convenience, the grounds Page | 2 ITA Nos. 435 & 436/SRT/2019 P K Vakil Gahambar & Wakaf Fund as well as the facts narrated in ITA No.435/SRT/2019 (P. K. Vakil Gahambar Fund), have been taken into consideration for deciding the above appeals en masse. 3. Grounds of appeal raised by the assessee in lead case in ITA No.435/SRT/2019 (P. K. Vakil Gahambar Fund), are as follows: “On the facts & circumstances of the case & the law on the subject, 1. The learned CIT Exemption has miserably failed to appreciate that it was only due to inability of the Income tax Department to issue Duplicate/copy of Registration Certificate u/s. 12AA(1)(b)(ii) of Income Tax Act, 1961 granted to the assessee by the Department some around 40 years ago, which had compelled the Assessee to again make application u/s. 12AA(1) of Income Tax Act, 1961 by way of abundant caution. 2. The learned CIT(Exemption) has again miserably failed to appreciate that a) The assessee has been registered under the Public Charitable Trust Act for last more than 60 years as a Public Charitable Trust. b) The assessee is being assessed to income tax for last number of decades enjoying exemption under sec. 11 of Income tax Act. c) A copy of trust deed submitted clearly described the objects of the trust living no scope of ambiguity. d) The copy of PTR, insisted by the Commissioner Exemption was refused even in RTI application to the assessee even by the Charity Commissioner’s Office and was there for beyond the ability of the assessee.And therefore by grossly erred in rejecting the assessee`s application for registration under the lame excuses of so called non- compliances by the assessee. 3. The assessee craves leave to add to alter or amend the present grounds of appeal.” 4. Grounds of appeal raised by the assessee in ITA No.436/SRT/2019 (P. K. Vakil Wakaf Fund), are as follows: “On the facts & circumstances of the case & the law on the subject, 1. The learned CIT Exemption has miserably failed to appreciate that it was only due to inability of the Income tax Department to issue Duplicate / Copy of Registration Certificate U/S. 12AA (1) (b) (ii) of Income Tax Act, 1961 granted to the assessee by the Department some around 40 years ago, which had compelled the Assessee to again make application U/S.12AA (1) of Income Tax Act, 1961 byway of abundant caution 2. The learned CIT (EXEMPTION) has again miserably failed to appreciate that Page | 3 ITA Nos. 435 & 436/SRT/2019 P K Vakil Gahambar & Wakaf Fund a) The assessee has been registered under the Public Charitable Trust Act for last more than 60 years as a Public Charitable Trust b) The assessee is being assessed to income tax for last number of decades enjoying exemption under Sec. 11 of Income tax Act. c) A copy of trust deed submitted clearly described the objects of the trust living no scope of ambiguity, d) The copy of PTR, insisted by the Commissioner Exemption was refused even in RTI application to the assessee even by the Charity Commissioner's Office and was there for beyond the ability of the assessee. And there by grossly erred in rejecting assessee's application for registration under the lame excuses of so called non-compliances by the assessee. 3. The Assessee craves leave to add to alter or amend the present grounds of appeal.” 5. Succinct facts as per lead case in ITA No.435/SRT/2019 (P. K. Vakil Gahambar Fund), are as follows: An application for registration of the trust u/s 12AA of the I.T. Act, 1961 was filed by the assessee on 18.01.2019, in Form No. 10A under Rule 17A of the I.T. Rules, 1962. The ld CIT(E ) issued a notice dated 12.04.2019 to the assessee, and asked assessee to furnish detailed note on the activities actually carried out by the trust as well as certain details/documents. 6. In response to the said notice, the details have been submitted by the assessee on 23.01.2019 in part. Following the principles of natural justice, final opportunity was given by ld CIT(E) to the assessee and therefore another notice was issued to the assessee on 12.06.2019, on the e-mail id given by the assessee trust in its online application to furnish detailed note on the activities actually carried out by the trust as well as certain details/documents as mentioned therein. In response to the said notice, the details have been submitted by the assessee through e-mail on 11.07.2019 as well as speed post on 16.07.2019 in part. 7. The ld CIT(E) on the basis of material available on records, observed that assessee has not filed self-certified copy of PTR [Public Trust Register], and in absence of the PTR, the object of the trust is not verifiable. In spite of Page | 4 ITA Nos. 435 & 436/SRT/2019 P K Vakil Gahambar & Wakaf Fund specific requisitions, the assessee has not submitted the requisite details. Therefore, no verification of the objects as per the Trust deed with the activities carried out, if any, could be made. Thus, ld CIT(E ) noted that the genuineness of the activities does not get established. Moreover, on verification of the submission filed by the assessee, it was noticed that assessee has filed a copy of trust PAN card in the name of "P.K. Vakil Gahamber Fund", Audited Account for the F.Y. 2015-16, 2016-17, 2017-18 in the name of "Seth P. K. Vakil Kadmi Atash Bertram Gahamber Fund" and trust registration certificate in the name of "Ghambher Trust, i.e. trust for performance of gashan ceremonies relating to Ghambheres and feasting Zoroastrians Surat". During the proceedings, the assessee trust has filed an affidavit and stated that name of the trust (1) P. K. Vakil Gambar Fund on PAN CARD, (2) Gambar Trust on P.T.R, and (3) Sheth P. K. Vakil Kadmi Atash Behram Gahamber Fund is one and the same trust for all purpose of the Trust Activities. However, ld PCIT noted that reply of the assessee is not found to be acceptable as till date the assessee has not filed any documentary evidences which prove that the name of the trust is changed in the tax record as per name mentioned in trust registration certificate. Had the contention of the assessee been correct, it would have filed application for correction in name mentioned in trust registration certificate of charity commissioner dated 18.04.1953 or it would have filed application for correction of the name in PAN Card as per name appear in its PTR/Trust registration certificate. The same has not been submitted by the assessee. Therefore considering the above facts, the ld PCIT noted that trust namely "P. K. Vakil Gambar Fund" is not having trust registration certificate of charity commissioner till date. Thus, the genuineness of "the activities are not established. Therefore, ld CIT(E ) rejected the application filed in Form No.10A for the approval u/s 12AA of the I.T. Act, 1961. 8. Aggrieved by the order of ld CIT(E ), the assessee is in appeal before us. 9. Shri Rasesh Shah, Learned Counsel for the assessee, argued that assessee has preferred the aforesaid appeal against the rejection of registration u/s 12AA of the Income Tax Act by the Learned Commissioner of Income Tax Exemption Page | 5 ITA Nos. 435 & 436/SRT/2019 P K Vakil Gahambar & Wakaf Fund Ahmedabad, on an application for registration by the Assessee, by way of abundant caution, as the original Registration Certificate was not traceable, at the relevant time, at Assessee's end and was also not available with the Income Tax Department. The Assessee had, thereafter, put in strenuous efforts for the search of the original Registration Certificate at the Assessee's end and the Assessee has been lucky and successful to find out the original Registration Certificate from the Assessee's old records only. The Assessee desires to submit the true copy of the said Registration Certificate as an "Additional Evidence". The Assessee was precluded from submitting the aforesaid true copy of the original Registration Certificate at the earlier stages, as the same was not traceable at that relevant time with the Assessee. This is a "reasonable cause" for non-submission of the same before the lower authorities. True copy of the Registration Certificate No.HQ:II.G-5/SR/74, u/s 12A(a) of the Income Tax Act, 1961, Dated-16 th August 1977, issued by the Commissioner of Income Tax Gujarat-II, Ahmedabad, is submitted by the assessee before the Bench. The ld Counsel also submits that there was no mala fide intention or any conscious disregard of the provisions of the law on the part of the Assessee in this matter. The ld Counsel, therefore, humbly prays before the Bench to admit the aforesaid certified true copy of the Registration Certificate Dated- 16 th August 1977 as an "Additional Evidence" in the interest of justice and matter may be remitted back to the file of ld CIT(E ) for adjudication of the issue as per Registration Certificate Dated- 16 th August 1977. 10. The Ld. Counsel submitted written submissions in respect of ITA No.435/SRT/2019 (P. K. Vakil Ghambhar Fund), which is reproduced below: “Arguments: 4. In the course of appellate proceedings before Honourable Tribunal, it is submitted that the assessee made the fresh registration application before CIT(Exemption) as at that time original registration certificate obtained u/s 12A was not traceable. However, the same has been traced and assessee was duly registered vide registration no.HQ:II-G-5/SRT/77 by the CIT, Gujart-2. 5. The assessee has also obtained the new PAN card in the name of Ghambhar Trust. Accordingly now PAN card, certificate of registration u/s. 12A of the I.T. Act and certificate of registration under Bombay Public Trusts Act are in the name of “Ghambhar Trust”. Page | 6 ITA Nos. 435 & 436/SRT/2019 P K Vakil Gahambar & Wakaf Fund 6. Regarding the copy of the PTR, it is submitted that the trust was registered on 18.04.1953 and old records have not been maintained by office of charity commissioner. However, assessee filed the declaration of the trust deed which contains objects of the trust. This declaration is in gujarati language and english translations of the same is also filed before Honourable Tribunal along with the appeal memo. 7. In view of the above, your honours are requested to direct the CIT(Exemption) to grant the certificate of registration in the name of Ghambhar Trust.” 11. The Ld. Counsel submitted written submission in respect of ITA No.436/SRT/2019 (P. K. Vakil Wakaf Fund), which is reproduced below: “Arguments: 4. In the course of appellate proceedings before honourable Tribunal, it is submitted that the assessee made the fresh registration application before CIT(Exemption) as at that time original registration certificate obtained u/s 12A was not traceable. However, the same has been traced and assessee was duly registered vide registration no. CIT:II/W-1/SR/74 by the CIT, Gujarat-2. 5. The assessee has also obtained the new Pan card in the name of Wakaf Trust. Accordingly now PAN card, certificate of registration u/s.12A of the I.T. Act, and certificate of registration under Bombay Public Trust Act are in the same name of “Wakaf Trust”. 6. Regarding the copy of the PTR, it is submitted that the trust was registered on 18.04.1953 and old records have not been maintained by office of charity commissioner. However, assessee filed the declaration of the trust deed which contains objects of the trust. This declaration is in gujarati language and english translation of the same is also filed before Honourable Tribunal along with the appeal memo. 7. In view of the above, your honours are requested to direct the CIT(Exemption) to grant the certificate of registration in the name of Wakaf Fund.” 12. On the other hand, Learned Departmental Representative (ld. DR) for the Revenue submitted that there are lot of ambiguity in the assessee`s case and it is not clear whether trust has a valid Registration Number or not. However, ld DR did not have objection if the matter is remitted back to the file of ld CIT(E ) for necessary verification and adjudication as per law. Page | 7 ITA Nos. 435 & 436/SRT/2019 P K Vakil Gahambar & Wakaf Fund 13. We have heard both the parties and carefully gone through the submissions put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the facts of the case including the findings of the ld. CIT(E) and other material brought on record. We note that assessee has preferred the appeal before the Tribunal against the rejection of registration u/s 12AA of the Income Tax Act by the Learned Commissioner of Income Tax Exemption Ahmedabad, on an application for registration by the Assessee, by way of abundant caution, as the original Registration Certificate was not traceable, at the relevant time, at Assessee's end and was also not available with the Income Tax Department. That is, the original Registration Certificate was not traceable, at the relevant time, at Assessee's end and was also not available with the Income Tax Department, hence assessee applied for fresh registration u/s 12AA of the Income Tax Act. 14. However, later on, assessee traced the original Registration Certificate, which he submitted as an "Additional Evidence" before the Bench. We note that such additional evidence should be admitted in the interest of justice, as the assessee was precluded from submitting the aforesaid true copy of the original Registration Certificate before the lower authorities, as the same was not traceable at that relevant point of time. Before us, assessee has submitted true copy of two Registration Certificates, which are as follows: (i) True copy of the Registration Certificate No.HQ:II.G-5/SR/74, u/s 12A(a) of the Income Tax Act, 1961, Dated-16 th August 1977, issued by the Commissioner of Income Tax Gujarat-II, Ahmedabad. This certificate relates to assessee`s appeal in ITA No.435/SRT/2019 (P K Vakil Gahambar Fund). Therefore, we note that registration has been traced by the assessee and assessee was duly registered vide registration no.HQ:II-G-5/SRT/74 by the CIT, Gujart- 2. The assessee has also obtained the new PAN card in the name of Ghambhar Trust. Accordingly, now PAN card, certificate of registration u/s 12A of the I.T. Act and certificate of registration under Bombay Public Trusts Act are in the name of “Ghambhar Trust”. Regarding the copy of the PTR, it is submitted that the trust was registered on 18.04.1953 and old records have not been maintained Page | 8 ITA Nos. 435 & 436/SRT/2019 P K Vakil Gahambar & Wakaf Fund by office of charity commissioner. However, assessee filed the declaration of the trust deed which contains objects of the trust. Therefore, we remit this issue back to the file of the ld CIT(E ) for verification of these facts and to grant the certificate of registration in the name of “Ghambhar Trust”. (ii) True copy of the Registration Certificate No.CIT:II/W-1/SR/74, u/s 12A(a) of the Income Tax Act, 1961, Dated – 16 th August, 1977, issued by the Commissioner of Income Tax Gujarat-II, Ahmedabad. This certificate relates to assessee`s appeal in ITA No.436/SRT/2019 (P. K. Vakil Wakaf Fund). Therefore, we note that registration has been traced by the assessee and assessee was duly registered, vide registration no. CIT:II/W-1/SR/74 by the CIT, Gujarat-The assessee has also obtained the new Pan card in the name of Wakaf Trust. Accordingly, now PAN card, and certificate of registration u/s 12A of the I.T. Act, and certificate of registration under Bombay Public Trust Act are in the same name of “Wakaf Trust”. Regarding the copy of the PTR, it is submitted that the trust was registered on 18.04.1953 and old records have not been maintained by office of charity commissioner. However, assessee filed the declaration of the trust deed which contains objects of the trust. Therefore, we remit this issue back to the file of the ld CIT(E ) for verification of these facts and to grant the certificate of registration in the name of “Wakaf Fund.” 15. Since the above true copy of these two Registration Certificates are additional evidences before us, therefore we are of the view that an opportunity should be given to the ld CIT(E ) to examine these certificates and facts narrated above and to grant the certificate of registration in accordance with law. For statistical purposes, both these appeals of the assessees are allowed. 16. In the result, both appeals filed by the assessees are allowed for statistical purposes. Registry is directed to place one copy of this order in all appeals folder / case file(s). Page | 9 ITA Nos. 435 & 436/SRT/2019 P K Vakil Gahambar & Wakaf Fund Order is pronounced on 21/12/2022 by placing the result on the Notice Board. Sd/- Sd/- (PAWAN SINGH) (Dr. A.L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER lwjr /Surat Ǒदनांक/ Date: 21/12/2022 SAMANTA Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // TRUE COPY // Assistant Registrar/Sr. PS/PS ITAT, Surat