Peer Shri Makdum Saheb ni Dargah & Masjid, V. The Commissioner of Income Tax-I, RAJKOT-GUJARAT

ITA 447/RJT/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94037 (ITAT-RAJKOT)
• Duration Of Justice: 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 21-05-2015
• Assessment Year: misc
• Appeal Filed On: 21-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M L MEENA
• Section: 12A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH , RAJKOT BEFORE SHRI SHAILEND RA K UMAR YADAV, JUDICIAL MEMBER, AND SHRI N. S. SAINI , ACCOUNTANT MEMBER . ITA. NO. 4 47 / RJT /20 14 (ASSESSMENT YEAR: N.A. ) PEER SHRI MAKHDUM SAHEBNI DARGAH & MASJ ID, C/O YAKUB BHACHU RUKNANI, MOTA SALAYA, MANDVI, KUTCH APPELLANT VS. COMMISSIONER OF I NCOME T AX RAJKOT - I. RESPONDENT PAN: AAAT O3587C / BY APPELLANT : SHRI ANKIT CHOKSHI , C.A. / BY RESPONDENT : SHRI M. L. MEENA, D.R. / DATE OF HEARING : 2 1 . 0 5 .2015 / DATE OF PRONOUNCEMENT : 25 . 0 5 .201 5 ORDER PER SHAILENDRA KUMAR YADAV, J.M: TH I S APPEAL HAS BEEN FILED BY ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX , RAJKOT - 1 , DATED 30 . 0 5 . 20 1 4 ON THE FOLLOWING GROUND S : I T A NO. 447 / RJT / 1 4 A.Y. N.A. [ PEER SHRI MAKHDUM SAHEBNI DARGAH & MASJID VS . CIT ] PAGE 2 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE OF YOUR APPELLANT, THE LEARNED CIT RAJKOT - I HAS ERRED IN REJECTING THE REGISTRATION U/S.12A OF INCOME TAX ACT, 1961 WITHOUT ISSUING ANY SHOW CAUSE NOTICE TO THE APPELLANT AND WITHOUT PROPERLY VERIFYING THE DOCUMENTS SUBMITTED BEFORE HIM. THEREFORE THE ORDER REJECTING THE REGISTRATION U/S.12A TO THE APP ELLANT IS ILLEGAL AND BAD IN LAW AND THEREFORE YOUR APPELLANT PRAYS THAT THE ORDER REJECTING THE REGISTRATION SHALL BE QUASHED. 2. YOUR APPELLANT PRAYS THAT THE COMMISSIONER OF INCOME TAX, RAJKOT - I, RAJKOT BE DIRECTED TO GRANT THE REGISTRATION U/S.12AA OF THE ACT W.E.F.01/04/2013. 2. PEER SHRI MAKHADDUM SHAEBNI DARGAH & MASJID, KUTCH (HEREINAFTER CALLED TRUST ) MADE AN APPLICATION FOR REGISTRATION U/S.12A OF INCOME TAX ACT IN FORM NO. 10A. CIT OBSERVED THAT ALONG WITH THIS APPLICATION TRUST DID NOT FURN ISH COPY OF ITS TRUST DEED/WAKF DOCUMENT OR ITS CONSTITUTION, CREATING TRUST. ON BEING ASKED, IT WAS SUBMITTED THAT TRUST WAS CREATED MORE THAN A HUNDRED YEAR AGO. HOWEVER, IT WAS ADMITTED THAT NO DOCUMENT HAS BEEN EXECUTED TILL DATE DEFINING OBJECTS, RU LES OF THE TRUST OR DUTIES AND RIGHT OF TRUSTEES. TRUST PRODUCED A COPY OF FORM K DATED 19/04/1996 AS PER RULE 15 GIVING DETAILS OF ITS REGISTRATION WITH KUTCHI WAKF BOARD, KUTCH. CIT FOUND THAT TRUST FAILED TO PRODUCE ANY AUTHENTIC DOCUMENTS REGARDING I TS OBJECTS, PRESENT TRUSTEES, TRUST FUNDS AND OTHER REQUIRED PARTICULARS. STAND OF ASSESSEE BEFORE US IS THAT TRUST WAS CREATED HUNDRED YEARS AGO AND SAME WAS RULED BY CUSTOMS OF MUSLIM COMMUNITY. THE TRUST CLAIMED THAT TRUST I T A NO. 447 / RJT / 1 4 A.Y. N.A. [ PEER SHRI MAKHDUM SAHEBNI DARGAH & MASJID VS . CIT ] PAGE 3 IS ELIGIBLE FOR REGISTRATION , RELYING UPON THE DECISION OF HON BLE ITAT, INDORE BENCH IN CASE OF DAWOODI BOHRA JAMAT, NEEMACH IN ITA NO. 464/IND/05 FOR A.Y. 2004 - 05 AS WELL AS OTHER DECISION IN CASES OF DAWOODI BOHRA COMMUNITY TRUST. CIT DID NOT ACCEPT THE SAME AND REJECTED THE REG ISTRATION. WE FIND THAT ITAT, INDORE BENCH IN ITA NO. 464/IND/05 FOR A.Y. 2004 - 05 IN CASE OF SHIYA DAWOODI BOHRA JAMAT VS. CIT AND OTHER APPEALS, HAS REFERRED THE DECISION OF HON BLE M.P. HIGH COURT IN CASE OF LAXMINARAYAN MAHARAJ AND ANR. V. CIT (1984) 15 0 ITR 465 (MP ) WHILE CONSIDERING THE PROVISIONS OF SECTION 12A AND RULE 17A HON BLE M. P. HIGH COURT OBSERVED AS UNDER: WHEN THE TRUST IS A TRUST CREATED UNDER AN INSTRUMENT R. 17 REQUIRES FILING OF THE INSTRUMENT IN ORIGINAL AND WHEN THE TRUST IS CRE ATED OTHERWISE THAN UNDER AN INSTRUMENT, THE DOCUMENT EVIDENCING THE CREATION OF THE TRUST HAS TO BE FILED. AN ANALYSIS OF SECTION 12A(A) AND R.17A(A) WILL SHOW THAT THE FACT TO BE ESTABLISHED IS THE CREATION OF THE TRUST AND THIS FACT IS REQUIRED TO BE ESTABLISHED BY PRODUCING CONSTITUTIVE AND EVIDENTIAL DOCUMENTS. WHEN THE TRUST IS CREATED UNDER AN INSTRUMENT, THE RULE REQUIRES THE PRODUCTION OF THE CONSTITUTIVE DOCUMENT ITSELF I.E. THE INSTRUMENT WHICH CREATED THE TRUST. WHEN THE TRUST IS NOT CREATED UNDER AN INSTRUMENT, IT IS IMPOSSIBLE TO PRODUCE ANY CONSTITUTIVE DOCUMENT A N D, HENCE, THE RULE REQUIRES PRODUCTION OF EVIDENTIAL DOCUMENTS, I .E. THE DOCUMENTS EVIDENCING THE CREATION OF TH E TRUST. THE EVIDENTIAL DOCUMENTS CANNOT BE LIMITED TO DOCUMENTS W HICH DIRECTLY PROVE THE CREATION OF THE TRUST , THEY WILL EMBRACE ALL DOCUMENTS WHICH AFFORD A LOGICAL BASIS OF INFERRING CREATION OF THE TRUST AND ALL SUCH DOCUMENTS CAN BE DESCRIBED TO BE DOCUMENTS EVIDENCING THE CREATION OF THE TRUST WITHIN THE MEANING OF R.17A(A). A DOCUMENT DIRECTLY EVIDENCING THE CREATION OF THE TRUST IS NORMALLY BE CONSTITUTIVE DOCUMENT WHICH CANNOT BE PRODUCED WHEN THE TRUST IS NOT CREATED BY I T A NO. 447 / RJT / 1 4 A.Y. N.A. [ PEER SHRI MAKHDUM SAHEBNI DARGAH & MASJID VS . CIT ] PAGE 4 AN INSTRUMENT AND IF THE WORKS DOCUMENTS EVIDENCING THE CREATION OF THE TRUST ARE CONS TRUED AS LIMITED TO DOCUMENTS DIRECTLY EVIDENCING THE CREATION OF THE TRUST, IT WILL BE NEARLY IMPOSSIBLE TO HAVE A TRUST REGISTERED WHICH WAS NOT CREATED UNDER AN INSTRUMENT. THIS COULD NEVER HAVE BEEN THE INTENTION OF THE FRAMERS OF THE RULE. IN OUR OP INION, THESE WORKS EMBRACE ALL EVIDENTIAL DOCUMENTS, I.E. ALL DOCUMENTS WHICH AFFORD A LOGICAL BASIS FOR INFERRING THE CREATION OF A TRUST. THE REVENUE PAPERS PRODUCED BY THE PETITIONERS CONSISTED OF JAMABANDIS OF 1910 - 11, 1929 - 30, PATTA ISSUED IN 1931 AN D JAMABANDI OF 1954 - 55. IN ALL THESE DOCUMENTS, THE PETITIONER - TRUST IS ENTERED AS A TENANT OF BHUMISWAMI AND THE NAME OF THE SARBARAKHAR IS ALSO MENTIONED. THE ASSESSMENT ORDER RELATING TO PROPERTY TAX FOR 1967 - 68 TO 1974 - 75 WERE FILED. ALL THESE DOCUM ENTS, THOUGH NOT DIRECTLY EVIDENCING THE CREATION OF THE TRUST, AFFORD A LOGICAL BASIS FOR INFERRING THE CREATION OF THE TRUST PRIOR TO 1910 - 11 AND CAN BE DESCRIBED AS DOCUMENTS EVIDENCING THE CREATION OF THE TRUST FOR PURPOSES OF R.17A. IN OUR OPINION, T HE COMMISSIONER WAS NOT RIGHT IN TAKING A VERY NARROW VIEW OF R.17A AND IN HOLDING THAT THE PETITIONER - TRUST HAS NOT COMPLIED WITH THAT RULE. THE PETITION IS ALLOWED. THE COMMISSIONER S ORDER DATED FEBRUARY 6, 1979, IS QUASHED AND HE IS DIRECTED TO RECO NSIDER THE APPLICATION OF THE TRUST IN THE LIGHT OF THE OBSERVATIONS MADE ABOVE. THERE WILL BE NO ORDER AS TO COSTS. THE SECURITY AMOUNT BE REFUNDED TO THE PETITIONERS. 2.1 THIS MAKES IT CLEAR THAT TRUST IS A TRUST CREATED UNDER AN INSTRUMENT RULE 17 RE QUIRES FILING OF INSTRUMENT IN ORIGINAL AND WHEN TRUST IS CREATED OTHERWISE THAN UNDER AN INSTRUMENT, DOCUMENT EVIDENCING CREATION OF THE TRUST HAS TO BE FILED. ANALYSIS OF SECTION 12A(A) AND RULE 17A(A) WILL SHOW THAT FACT TO BE ESTABLISHED IS THE CREATI ON OF TRUST AND THIS IS REQUIRED TO BE ESTABLISHED BY PRODUCING CONSTITUTIVE AND EVIDENTIAL DOCUMENTS. WHEN THE TRUST IS CREATED UNDER AN INSTRUMENT, I T A NO. 447 / RJT / 1 4 A.Y. N.A. [ PEER SHRI MAKHDUM SAHEBNI DARGAH & MASJID VS . CIT ] PAGE 5 RULE REQUIRES THE PRODUCTION OF CONSTITUTIVE DOCUMENT ITSELF I.E. INSTRUMENT WHICH CREATED THE TRUST. WHE N TRUST IS NOT CREATED UNDER AN INSTRUMENT, IT IS NOT POSSIBLE TO PRODUCE ANY CONSTITUTIVE DOCUMENT AND, HENCE, THE RULE REQUIRES PRODUCTION OF EVIDENTIAL DOCUMENTS, I.E. THE DOCUMENTS EVIDENCING THE CREATION OF TRUST. THE EVIDENTIAL DOCUMENTS CANNOT BE LI MITED TO DOCUMENTS WHICH DIRECTLY PROVE THE CREATION OF THE TRUST, THEY WILL EMBRACE ALL DOCUMENTS WHICH AFFORD A LOGICAL BASIS OF INFERRING CREATION OF THE TRUST AND ALL SUCH DOCUMENTS CAN BE DESCRIBED TO BE DOCUMENTS EVIDENCING THE CREATION OF THE TRUST WITHIN THE MEANING OF RULE 17A(A). A DOCUMENT DIRECTLY EVIDENCING THE CREATION OF TRUST IS NORMALLY BE CONSTITUTIVE DOCUMENT WHICH CANNOT BE PRODUCED WHEN TRUST IS NOT CREATED BY AN INSTRUMENT AND IF THE WAKF DOCUMENTS EVIDENCING THE CREATION OF THE TRUS T ARE CONSTRUED AS LIMITED TO DOCUMENTS DIRECTLY EVIDENCING THE CREATION OF THE TRUST, IT WILL BE NEARLY IMPOSSIBLE TO HAVE A TRUST REGISTERED WHICH WAS NOT CREATED UNDER AN INSTRUMENT. IN CASE BEFORE US, ASSESSEE HAS CATEGORICALLY STATED THAT NO DOCUMENT HAS BEEN EXECUTED FOR CREATION OF TRUST. TRUST WAS CREATED HUNDRED YEARS AGO. ASSESSEE PRODUCED COPY OF FORM K DATED 19/04/1996 AS PER RULE 15 GIVING DETAILS OF REGISTRATION WITH CONCERN WAKF BOARD . THE SAID TRUST IS CREATED AS PER CUSTOMS OF MUSLIM CO MMUNITY AND EVERY RELIGIOUS COMMUNITY IS FREE AS PER FUNDAMENTAL RIGHTS TO GO AHEAD WITH HIS CUSTOMS AND FAITH. IN VIEW OF ABOVE RATIO OF HON BLE M.P. HIGH COURT IN CASE OF LAXMINARAYAN MAHARAJ & ANOTHER (SUPRA) , CIT WAS NOT I T A NO. 447 / RJT / 1 4 A.Y. N.A. [ PEER SHRI MAKHDUM SAHEBNI DARGAH & MASJID VS . CIT ] PAGE 6 JUSTIFIED IN REJECTING THE REG ISTRATION OF ASSESSEE. ACCORDINGLY, ORDER OF CIT IS SET ASIDE AND MATTER IS RESTORED TO HIM WITH DIRECTION TO DECIDE THE SAME AS PER FACT AND LAW AS DISCUSSED ABOVE. 3 . IN THE RESULT, APPEAL FILED BY ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE . PRONOU NCED IN THE OPEN COURT ON THIS THE 25 TH DAY OF MA Y , 201 5 . SD/ - SD/ - (N. S. SAINI) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER RAJKOT : DATED 25 /0 5 /2015 TRUE COPY S K SINHA COPY OF THE ORDER FORWARDED TO : - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, RAJKOT . 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT, RAJKOT