Jayshree Vidhyavasini Mataji Trust, V. The Commissioner of Income Tax, JAMNAGAR

ITA 482/RJT/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2369 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 07-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MJ RANPURA
• Keywords: Charitable institution; Reasonable cause
• Section: 12AA

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT [ CONDUCTED THROUGH E-COURT AT AHMEDABAD ] , ! , ! #$ BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ./ I.T.A. NO.482/RJT/2014 ( / ASSESSMENT YEAR : - ) JAYSHREE VIDHYAVASINI MATAJI TRUST VS. CIT C/O.SHRI NARUBHA BAHADURSINH JETHWA AT MORANA, DIST.PORBANDAR / VS. THE CIT JAMANAGAR !) ./ ./ PAN/GIR NO. AABTJ 3834 C ( )+ / APPELLANT ) .. ( ,-)+ / RESPONDENT ) )+. / APPELLANT BY : SHRI M.J. RANPURA, C.A. ,-)+/. / RESPONDENT BY : SHRI YOGESH PANDEY, DR 0/ / DATE OF HEARING 30/12/2015 12 / / DATE OF PRONOUNCEMENT 20/01/2016 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED U/S.12AA(1)(G)(II) OF THE INCOME TAX ACT, 1961 BY T HE LD.COMMISSIONER OF INCOME TAX-JAMNAGAR [CIT IN SHORT] DATED 25/02/2013. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- ITA NO.482 /RJT /2014 JAYSHREE VIDHYAVASINI MATAJI TRUST VS. CIT - 2 - 1.0 THE GROUNDS OF APPEAL MENTIONED HEREUNDER ARE WITHO UT PREJUDICE TO ONE ANOTHER. 2.0 THE LEARNED COMMISSIONER OF INCOME TAX, JAMNAGAR [HEREINAFTER REFERRED TO AS THE CIT] ERRED ON FAC TS AS ALSO IN LAW IN REJECTING THE APPLICATION FOR REGISTRATION U /S.12AA OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED AS TO TH E ACT] ON THE ALLEGED GROUNDS THAT THE APPELLANT TRUST IS CREATED FOR THE BENEFIT OF ONE PARTICULAR CASTE OR COMMUNITY. THE LD.CIT B E DIRECTED TO GRANT REGISTRATION. 3.0 THE LEARNED CIT ERRED ON FACTS AS ALSO IN LAW IN RE JECTING THE APPLICATION FOR REGISTRATION U/S.12AA OF THE ACT ON THE ALLEGED GROUND THAT THE TRUST DEED DOES NOT CONTAIN ANY CLA USE REGARDING PROVISIONS IN THE EVENT OF ITS DISSOLUTION TO THE E FFECT THAT UPON THE DISSOLUTION, IF ANY PROPERTY/ASSETS REMAINS AFT ER SATISFACTION OF ITS DEBTS AND LIABILITIES, THE SAME SHALL BE TRA NSFERRED TO THE TRUST HAVING SIMILAR OBJECTS. 3.1. THAT ON FACTS AS ALSO IN LAW THE LD.CIT OUGHT TO HAVE APPRECIATED CLAUSE 19 OF THE TRUST DEED WHICH MAKES IT CLEAR PR OVISION OF THE ACT (BOMBAY PUBLIC TRUST ACT) SHALL BE FOLLOWED. E VEN OTHERWISE A TRUST WHEN REGISTERED BY THE ASSISTANT CHARITY COMMISSIONER UNDER THE BOMBAY PUBLIC TRUST ACT AND PROVISIONS OF THE SAID ACT ARE APPLICABLE TO THE TR UST IN THE EVENT OF DISSOLUTION. THE LD.CIT BE DIRECTED TO GRANT RE GISTRATION. 4.0 YOUR HONOURS APPELLANT CRAVES LEAVE TO ADD TO AMEND, ALTER, OR WITHDRAW ANY OR MORE GROUNDS OF APPEAL ON OR BEFORE THE HEARING OF APPEAL. 2. IT IS OBSERVED THAT THE APPEAL FILED BY THE AS SESSEE IS TIME-BARRED BY 464 DAYS. THE REASON FOR NON-FILING OF THE APPEAL WAS DUE TO BY THE LAPSE OF THE OFFICE OF THE CHARTERED ACCOUNTANT OF THE AS SESSEE. IN SUPPORT OF THIS CONTENTION, TWO AFFIDAVITS; ONE BY SHRI NARUBH A BAHADURSINH JETHWA AND THE OTHER BY SHRI ALVISH MEGHNATHI HAVE BEEN FI LED. THE LD.COUNSEL FOR THE ASSESSEE HAS REITERATED THE SUBMISSIONS AS WERE MADE IN THE ITA NO.482 /RJT /2014 JAYSHREE VIDHYAVASINI MATAJI TRUST VS. CIT - 3 - AFFIDAVIT AND SUBMITTED THAT THERE WAS A REASONABLE CAUSE FOR NON-FILING OF THE APPEAL. 3. BRIEFLY STATED FACTS OF THE CASE ARE THAT ASSESSEE PREFERRED AN APPLICATION FOR REGISTRATION U/S.12AA(1)(B)(II) OF THE ACT ON 09/08/2012. THE SAID APPLICATION WAS REJECTED BY THE COMMISSION ER OF INCOME-TAX, JAMNAGAR ON THE GROUND THAT THERE IS NO DISSOLUTION CLAUSE. AGGRIEVED BY THIS ORDER, ASSESSEE PREFERRED AN APPEAL BEFORE US. 4. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT T HE LD.CIT(A) WAS NOT JUSTIFIED IN REJECTING THE APPLICATION AND REIT ERATED THE SUBMISSIONS AS WERE MADE IN THE SYNOPSIS. THE LD.COUNSEL FOR THE A SSESSEE SUBMITTED THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSE SSEE. 4.1. ON THE CONTRARY, LD.CIT-DR HAS OPPOSED THE SUB MISSION MADE BY THE LD.COUNSEL FOR THE ASSESSEE AND SUPPORTED THE O RDER OF THE LD.CIT. HE SUBMITTED THAT THE REASONS AS STATED IN THE AFFIDAV ITS ARE NOT REASONABLE CAUSE. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE LD.CIT HAD REJECTED THE APPLICATIO N BY OBSERVING AS UNDER:- 4. IN RESPONSE, THE TRUSTEES HAVE ATTENDED THE OF FICE. HOWEVER, THEY DID NOT EXPLAIN ANYTHING ABOUT THE NON-EXISTENCE/NO N-INCLUSION OF DISSOLUTION CLAUSE, SINCE THE TRUST DEED DOES NOT C ONTAIN PROVISIONS IN THE EVENT OF ITS DISSOLUTION TO THE EFFECT THAT UPO N THE DISSOLUTION. IF ANY PROPERTY REMAINS AFTER SATISFACTION OF ITS DEBTS AN D LIABILITIES, THE SAME SHALL BE TRANSFERRED TO THE TRUST HAVING SIMILAR OB JECTIONS, THE APPLICANT ITA NO.482 /RJT /2014 JAYSHREE VIDHYAVASINI MATAJI TRUST VS. CIT - 4 - TRUST IS NOT FOUND TO BE FULFILLING THE CONDITIONS LAID DOWN UNDER THE ACT. THEREFORE, REGISTRATION SOUGHT U/S.12A(1) OF THE AC T CAN NOT BE GRANTED. HOWEVER, THE TRUST MAY MAKE A FRESH APPLICATION FOR REGISTRATION U/S.12AA WITH REQUISITE MODIFICATION IN THE TRUST D EED AND OTHER RECTIFICATION OF THE ABOVE REFERRED LACUNAS, IF IT WISHES SO. 5.1. WE FIND THAT THE NON-FILING OF THE APPEAL IN T IME WAS NOT A DELIBERATE ACT. THE ASSESSEE HAS DEMONSTRATED THAT THE ORDER WAS RECEIVED AND THE SAME WAS SENT TO THE OFFICE OF THE CHARTERE D ACCOUNTANT FOR FILING OF APPEAL. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERAT ION TO THE RIVAL CONTENTIONS. THE ASSESSEE OUGHT TO HAVE BEEN VIGIL ANT WITH REGARD TO FILING OF THE APPEAL. HOWEVER, THE REVENUE HAS NOT PLACED ANY MATERIAL ON RECORD SUGGESTING THAT DELAY IS DELIBERATE AND F OR AVAILING OF ANY UNDUE BENEFIT. THE HONBLE APEX COURT IN THE CASE OF N.BALAKRISHNAN VS. M.KRISHNAMURTHY REPORTED AT (1998) 7 SCC 123, H AS HELD AS UNDER:- IT MUST BE REMEMBERED THAT IN EVERY CASE OF DELAY, THERE CAN BE SOME LAPSE ON THE PART OF THE LITIGANT CONCERNED. THAT ALONE IS NOT ENOUGH TO TURN DOWN HIS PLEA AND TO SHUT THE DOOR AGAINST HIM . IF THE EXPLANATION DOES NOT SMACK OF MALA FIDES OR IT IS NOT PUT FORTH AS PART OF A DILATORY STRATEGY, THE COURT MUST SHOW UTMOST CONSIDERATION TO THE SUITOR. 5.2. THEREFORE, WE CONDONE THE DELAY AND ADMIT TH E APPEAL FOR ADJUDICATION ON MERIT. THE ONLY REASON FOR REJECTI ON OF THE APPLICATION BY THE LD.CIT(A) WAS THAT THERE WAS NO DISSOLUTION CLA USE IN THE TRUST-DEED. THE COORDINATE BENCH (ITAT AMC BENCH RAJKOT) IN THE CASE OF SHRI TAPGACHHA SANGH MOTA VADALA VS. CIT IN ITA NO.440/R JT/2013 VIDE ORDER DATED 29/05/2014 IN PARA-6, HAS HELD AS UNDER :- ITA NO.482 /RJT /2014 JAYSHREE VIDHYAVASINI MATAJI TRUST VS. CIT - 5 - 6. RIVAL SUBMISSIONS WERE CONSIDERED. IT IS PERTIN ENT TO NOTE THAT THE TRUST IN QUESTION CAME INTO EXISTENCE PRIOR TO 1965 AND IS DULY REGISTERED UNDER THE BPT ACT, 1950. IT IS ALSO PERT INENT TO NOTE THAT THE ASSESSEE-TRUST IS REGULARLY FILING ITS RETURN OF IN COME SINCE ITS INCEPTION. THIS PRIMA-FACIE INDICATES THAT FILE OF THE ASSESSE E-TRUST IS AVAILABLE WITH THE ID. CIT, JAMNAGAR. HERE, IN THE CASE ON HAND, T HE ID. COMMISSIONER OF INCOME-TAX, JAMNAGAR REFUSED TO GRANT THE REGIST RATION TO THE ASSESSEE-TRUST U/S 12AA OF THE INCOME-TAX ACT SOLEL Y ON THE GROUND THAT THE TRUST DEED DOES NOT CONTAIN PROPER DISSOLUTION/ WINDING UP CLAUSE. CONSIDERING THE FACTS OF THE CASE ON HAND, I AM OF THE VIEW THAT THE ISSUE OF 'DISSOLUTION CLAUSE' NOW STOOD COVERED BY THE DE CISION OF CO- ORDINATE BENCH, ITAT 'B' BENCH, AHMEDABAD IN THE CA SE OF SHREE CHARGAM DASHA FORWARD MAHAMANDAL VS. DIT (EXEMPTION S), VIDE ITA NO.337 AND 338/AHD/2013 ORDER DATED 8.5.2013, WHERE IN IT WAS HELD AS UNDER: '3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFU LLY AND PERUSED THE ORDERS OF THE DLT(EXEMPTIONS) AS WE LL AS THE DECISION OF THE ITAT DELHI IN THE CASE OF SHRI SAI SAMARPAN TRUST CO.(SUPRA). WE FIND THAT THE ONLY RE ASON ADVANCED FOR REFUSING THE REGISTRATION U/S:12AA AND 80G(5) OF THE ACT BY THE DIT(EXEMPTIONS) IS THAT TH ERE IS NO DISSOLUTION CLAUSE IN THE TRUST-DEED AND TRUST D OES NOT HAVE ANY CLAUSE THAT THE TRUST WILL NOT BE DISSOLVE D AND IT IS A PERPETUAL TRUST. THIS ISSUE OF REFUSING REGIST RATION IN THE ABSENCE OF DISSOLUTION CLAUSE IN THE TRUST-DEED IS COVERED IN FAVOUR OF THE ASSESSEE WITH THE DECISION OF CO- ORDINATE BENCH OF DELHI TRIBUNAL IN THE CASE OF SHR I SAI SAMARPAN TRUST CO.(SUPRA), WHEREIN IN PARAGRAPH NO. 8 HELD THAT WHEN THE ASSESSEE- TRUST IS REGISTERED WI TH THE SUB-REGISTRAR AS A CHARITABLE TRUST, IN THE EVENT O F FAILURE OF THE TRUST THE NET ASSETS/INCOME WOULD OBVIOUSLY BE TAKEN OVER BY THE CHARITY COMMISSIONER AND THE REJECTION OF REGISTRATION ON THIS GROUND WAS HELD NOT ON A SOUND FOOTING AND THE ORDERS OF THE DIT(EXEMPTIONS) WERE REVERSED. WE FIND THAT THE CASE OF THE ASSESSEE IS ON MORE ITA NO.482 /RJT /2014 JAYSHREE VIDHYAVASINI MATAJI TRUST VS. CIT - 6 - SOUND FOOTING SINCE IT HAS ALREADY APPLIED TO THE C HARITY COMMISSIONER FOR AMENDMENT OF THE TRUST-DEED VIDE APPLICATION SUBMITTED ON 26/02/2013, WHEREBY INSERT ING THE DISSOLUTION CLAUSE PROVIDING THAT THE TRUST SHA LL BE IRREVOCABLE AND IN THE MOST UNLIKELY SITUATION, IF TRUST PRACTICALLY STOPS FUNCTIONING, IT CAN ONLY BE MERGED/AMALGAMATED WITH OTHER ONE OR MORE PUBLIC CHARITABLE TRUSTS OR BODIES HAVING SIMILAR OBJECTS SUBJECT TO THE APPROVAL OF THE OFFICE OF THE PUBLIC CHARITY COMMISSIONER, ETC. NO OTHER MATERIAL HAS BEEN PRODU CED ON BEHALF OF THE REVENUE BEFORE US TO SUGGEST THAT THE AIMS AND OBJECTS OF THE TRUST ARE HOT CHARITABLE IN NATURE. IN THESE FACTS OF THE CASE, WE HOLD THAT THERE IS N O JUSTIFICATION FOR REFUSING THE REGISTRATION U/S.12A A AND 80G(5) OF THE ACT TO THE ASSESSEE, WHICH IS ACCORDI NGLY ALLOWED TO THE ASSESSEE AND THE ORDERS OF THE DIT(EXEMPTIONS) IN BOTH THE CASES ARE REVERSED AND WE DIRECT THE DIT(EXEMPTIONS) TO GRANT THE REGISTRATIO N U/S.12AA & 80G(5) OF THE ACT TO THE ASSESSEE IN BOT H THE CASES AND THE GROUND(S) RAISED IN BOTH THE APPEALS ARE HEREBY ALLOWED.' SINCE THE FACTS OF THE CASE OF THE ASSESSEE-TRUST A RE IDENTICAL TO THAT OF SHREE CHARGAM DASHA PORWAD MAHAMANDAL (SUP RA); I, FOR SIMILAR REASONS GIVEN IN ITA NOS. 337 & 338/AHD/201 3, ALLOW THE APPEAL OF THE ASSESSEE AND DIRECT THE ID. COMMISSIO NER OF INCOME-TAX, JAMNAGAR TO GRANT REGISTRATION U/S.12AA OF THE INC OME-TAX ACT TO THE ASSESSEE-TRUST. 5.2. THEREFORE, TAKING A CONSISTENT VIEW, WE HEREB Y SET ASIDE THE ORDER OF THE LD.CIT AND RESTORE THE APPLICATION TO HIS FILE FOR DECIDING IT AFRESH IN THE LIGHT OF THE AFORESAID DECISION OF THE COORDINA TE BENCH IN THE CASE OF SHRI TAPGACHHA SANGH MOTA VADALA VS. CIT IN ITA NO. 440RJT/2013, ITA NO.482 /RJT /2014 JAYSHREE VIDHYAVASINI MATAJI TRUST VS. CIT - 7 - DATED 29/05/2014. THUS GROUNDS RAISED BY THE ASSES SEE ARE ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON WEDNESDAY, THE 20 TH DAY OF JANUARY, 2016 AT AHMEDABAD. SD/- SD/- ( ) ( ) ! ! ( ANIL CHATURVEDI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 20/ 01 /2016 . .,.. ./ T.C. NAIR, SR. PS / COPY OF THE ORDER FORWARDED TO : 1. )+ / THE APPELLANT 2. ,-)+ / THE RESPONDENT. 3. 6 7 / CONCERNED CIT 4. 7 ( ) / THE CIT(A)-CONCERNED 5. 9:, , , /DR,ITAT,RAJKOT 6. :EFG0 / GUARD FILE. / BY ORDER, -9, //TRUE COPY// / ( DY./ASSTT.REGISTRAR) & ' , / ITAT, RAJKOT 1. DATE OF DICTATION 13.1.16 (DICTATION-PAD 6-- PAG ES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER .. 15.1.16 3. OTHER MEMBER... 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.20.1.16 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 20.1.16 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER