Appeal details
Counselvise Citation
472319914 RSA 2013
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 4 month(s) 3 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
21-10-2014
Appeal Filed By
Assessee
Bench Allotted
A
Assessment Year
2012-2013
Appeal Filed On
18-06-2013
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A , MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTAT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER I.T.A.NO. 4723/M/2013 KALLIANJI CHATURBHUJ AND VIJAY CANTOL CHARITABLE TRUST, SNEHA SADAN, BLOCK NO.13, 144, CHURCHGATE RECLAMATION, MUMBAI 400 020. PAN: AAATB 0539 K VS. DIRECTOR OF INCOME TAX (EXEMPTION), 6TH FLOOR, PIRAMAL CHAMBERS, PAREL, MUMBAI 400 012. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI NITESH JOSHI RESPONDENT BY : MS. S. PADMAJA DATE OF HEARING: 1.10.2014 DATE OF ORDER: 21 .10.2014 O R D E R PER D. KARUNAKARA RAO, AM : THIS APPEAL IS FILED BY THE ASSESSEE ON 18.6.2013 AGAINST THE ORDER OF THE DIRECTOR OF INCOME TAX (EXEMPTIONS), MUMBAI DATED 23.4.2013. 2. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1. THE LD DIT (E), ERRED IN NOT GRANTING REGISTRATION UNDER SECTION 12A OF THE ACT. WHILE DOING SO, THE LD DIT (E), INTER ALIA, ERRED IN A) HOLDING THAT THE APPELLANT TRUST IS NOT A VALID PUBLIC CHARITABLE TRUST ON THE GROUND THAT THE DISSOLUTION CLAUSE IN THE TRUST DEED IS NOT AS PER THE PROCEDURE LAID DOWN BY THE BOMBAY PUBLIC TRUST ACT, 1950. B) NOT APPRECIATING THE FACT THAT TH E APPELLANT - TRUST HAS BEEN GRANTED REGISTRATION UNDER THE BOMBAY PUBLIC TRUST ACT, 1950 AFTER CONSIDERING THE DISSOLUTION CLAUSE. C) HOLDING THAT INCASE OF DISSOLUTION OF THE TRUST, THE TRUSTEES HAVE FULL DISCRETION TO DISTRIBUTE NET ASSETS AMONG THE TRUSTEES / MEMBERS. HOWEVER, AS PER THE CLAUSE 30 (DISSOLUTION CLAUSE) NO SUCH POWER IS GIVEN TO THE TRUSTEES. 2. THE APPELLANT SUBMITS THAT THE LD DIT (E) OUGHT TO HAVE GRANTED REGISTRATION UNDER SECTION 12AA OF THE ACT. 3. AT THE OUTSET, SHRI NITESH JOSHI, LD COUNSEL FOR THE ASSESSEE MENTIONED THAT THE ASSESSEE MADE APPLICATION U/S 12A OF THE ACT AND THE DIT (E) REJECTED THE SAME AND HELD THAT THE ASSESSEE IS NOT A VALID PUBLIC CHARITABLE TRUST ON THE GROUND THAT THE DISSOLUTION CLAUSE (CLAUSE 30) IN THE TRUST DEED IS NOT PROPER AS IT DOES NOT CONTAIN THE PROCEDURE LAID DOWN IN THE BOMBAY PUBLIC TRUST ACT, 1950. IN THIS REGARD, LD COUNSEL FOR THE ASSESSEE FILED A COPY OF THE ORDER OF THE TRIBUNAL IN THE CASE OF TARA EDUCATIONAL AND CHARITABLE TRUST VS. DIT (E) VIDE ITA NO.1247/M/2013, DATED 18.7.2014 AND MENTIONED THAT THE DIT (E) CANNOT REJECT THE REGISTRATION MERELY ON THE GROUN D THAT THE DISSOLUTION CLAUSE DOES NOT EXISTENT OR IT DOES NOT MENTION THE PROCEDURE LAID DOWN IN THE BOMBAY PUBLIC TRUST ACT, 1950. THIS IS THE CASE, WHERE THE DISSOLUTION CLAUSE IS ENTIRELY ABSENCE IN THE TRUST DEED AND THE TRIBUNAL HELD THAT THE DIT (E) HAS NOT VALIDLY REJECTED THE REGISTRATION U/ 12A OF THE ACT. IN THIS REGARD LD COUNSEL BROUGHT OUR ATTENTION TO THE CONTENTS OF PA RA 4 OF THE SAID ORDER OF THE TRIBUNAL. 4. ON THE OTHER HAND, LD DR RELIED ON THE ORDER OF THE DIT (E). 5. AFTER HEARING BOTH THE PARTIES , WE HAVE PERUSED THE FACTS OF THE CASE AS WELL AS THE SAID ORDER OF THE TRIBUNAL IN THE CASE OF TARA EDUCATIONAL AND CHARITABLE TRUST (SUPRA). IN THIS CASE, THE TRUST DEED DOES NOT CONTAIN ANY DISSOLUTION CLAUSE AND DIT (E) REJECTED THE APPLICATION U/S 12A OF THE ACT. WHEN THE OBJECTS OF THE TRUST AND THE ACTIVITIES OF THE TRUST AND THEIR GENUINENESS ARE UNQUESTIONED, MERELY BASING ON THE ABSENCE OF DISSOLUTION CLAUSE IN THE TRUST DEED, ASSESSEE SHOULD NOT BE HELD DISENTITLED TO THE REGISTRATION U/S 12A OF THE ACT. RELEVANT PORTION FROM PARA 4 FROM THE SAID ORDER OF THE TRIBUNAL (SUPRA) IS EXTRACTED WHICH READS AS UND ER: 4THE SCOPE OF ENQUIRY CONTEMPLATED U/S 12AA OF THE ACT THUS 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 DIT (E), HOWEVER, SHOWS THAT HE HAS NOT RECORDED ANY ADVERSE COMMENT OR DIS - SATISFACTION ABOUT THE OBJECT OF THE TRUST OR GENUINENESS OF THE TRUST ACTIVITIES. HE HAS REFUSED TO GRANT THE REGISTRATION U/S 12 A OF THE ACT ON THE GROUND THAT ITS TRUST DEED DOES NOT CONTAIN DISSOLUTION CLAUSE. IN OUR OPINION, THE LD DIT (E) 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 ASSESSEE TRUST ON A TOTALLY IRRELEVANT GROUND WITHOUT POINTING OUT AS TO HOW HE HAS NOT SATISFIED EITHER ABOUT THE OBJECT OF THE TRUST OR THE GENUINENESS OF ITS ACTIVITIES. WE THEREFORE SET ASIDE THE IMPUGNED ORDER OF THE DIT (E) AND DIRECT TH AT THE REGISTRATION U/S 12A OF THE ACT AS APPLIED BY THE ASSESSEE TRUST BE GRANTED. 6. IN THE INSTANT CASE, THOUGH THERE IS DISSOLUTION CLAUSE (CLAUSE 30), THE OBJECTION OF THE DIT (E) IS THAT THE SAME DOES NOT LAID DOWN THE PROCEDURE AS APPROVED BY THE BOMBAY PUBLIC TRUST ACT, 1950. OTHERWISE, THERE IS NO OBJECTION RECORDED REGARDING THE OBJECTS AND ACTIVITIES AND THEIR GENUINENESS OF THE TRUST. CONSIDERING THE ABOVE SETTLED LEGAL PRINCIPLE ON THE SUBJECT, WE ARE OF THE OPINION, THE DIT (E) IS NOT CORR ECT IN REJECTING THE REGISTRATION U/S 12A OF THE ACT. WE THEREFORE, SET ASIDE THE ORDER OF THE DIT (E) AND DIRECT THE REGISTRATION U/S 12A OF THE ACT AS APPLIED BY THE ASSESSEE - TRUST BE GRANTED. ACCORDINGLY, GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST OCTOBER, 2014. SD/ - SD/ - (SANJAY GARG) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 21 .10.2014. AT :MUMBAI OKK COPY TO : 1. APPELLANT 2. RESPONDENT 3. THE CIT (A), CONCERNED. 4. THE CIT CONCERNED. 5. THE DR A, BENCH, ITAT, MUMBAI. 6. GUARD FILE. // TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI
