Appeal details
Counselvise Citation
[2009] 115 COUNSELVISE.COM (IT) 1441 (ITAT-INDORE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 month(s) 8 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
27-11-2009
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
DB
Next Hearing Date
26-11-2009
Assessment Year
misc
Appeal Filed On
19-10-2009
Judgement Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JM, AND SHRI V.K. GUPTA , AM ITA NOS.485 TO 490/IND/2009 UNDER SECTION 12A/12AA OF THE I.T. ACT 1. DAWOODI BOHRA JAMAT, BOHRA MASJID, BURHANI MOHALLA, RATLAM (PAN AABTD 2967 J) 2. DAWOODI BOHRA JAMAT, MAXI, DISTT. SHAJAPUR (PAN AABTD 2588 B) 3. DAWOODI BOHRA JAMAT, BOHRA MASJID, MEERKAA BAZAR, SHAJAPUR (PAN AABTD 2636 C) 4. DAWOODI BOHRA JAMAT, BOHRA MASJID, SUSNER (PAN AABTB 3085 D) 5. DAWOODI BOHRA JAMAT, JAWAHAR MARG, NELKEDA (PAN AAATD 6643 C) 6. FAIZE SAYYEDI YUSUFJI TRUST, GIRAVAR ROAD, SHAJAPUR (PAN AAATF 2732 L) .....APPELLANTS V/S. CIT, UJJAIN ....RESPONDENT ASSESSEES BY : SHRI MANUBHAI PATEL, CA DEPARTMENT BY : SHRI K.K. SINGH, CIT, DR 2 ORDER PER JOGINDER SINGH, JM THIS GROUP OF SIX APPEALS IS BY DIFFERENT ASSESSEE S CHALLENGING THE ORDERS OF THE LD. CIT- UJJAIN ON THE GROUND THAT TH E LD. CIT ERRED IN LAW AS WELL AS IN FACTS IN NOT GRANTING REGISTRATION TO THE PRE SENT APPELLANTS U/S 12A/12AA OF THE ACT. 2. DURING THE HEARING OF THESE APPEALS, WE HAVE HEA RD SHRI MANUBHAI PATEL, LD. COUNSEL FOR THE ASSESSEES AND SHRI K.K. SINGH, LD. CIT, DR. AT THE OUTSET, IT WAS POINTED OUT BY THE LD. COUNSEL FOR T HE ASSESSEES THAT SINCE THE ISSUE INVOLVED IN ALL THE APPEALS IS IDENTICAL, THE REFORE, THESE CAN BE HEARD TOGETHER. THE LD. CIT, DR HAD NO OBJECTION TO THE S UGGESTION OF THE LD. COUNSEL FOR THE ASSESSEES. THE CRUX OF ARGUMENTS ON BEHALF OF THE ASSESSEES IS THAT THE IMPUGNED ISSUE IS COVERED BY THE DECISI ON OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF LAXMINARAYAN MAHARAJ & OT HERS VS. CIT & OTHERS (150 ITR 465) (MP). OUR ATTENTION WAS ALSO INVITED TO THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CI T VS. DAWOODI BOHRA JAMAT, PITOL, DISTT. JHABUA, ORDER DATED 22.6.2009 AND ALS O THE DECISION OF THE TRIBUNAL IN DAWOODI BOHRA JAMAT & OTHERS VS. CIT (3 17 ITR (AT) 133) (INDORE). ON THE OTHER HAND, THE LD. CIT, DR STRONGLY DEFEND ED THE IMPUGNED ORDERS BY PLACING RELIANCE UPON THE DECISION IN CIT VS. PALGHAT SHADIMAHAL 3 TRUST (254 ITR 212) (SC) BY CONTENDING THAT THE ASS ESSEES TRUSTS ARE FOR THE BENEFIT OF PARTICULAR COMMUNITY SO REGISTRATION MAY NOT BE GRANTED AS THE ASSESSEES BEING PURELY RELIGIOUS CHARITABLE TRUSTS. IT WAS ALSO POINTED OUT THAT INTENTION OF LEGISLATURE HAS TO BE CONSIDERED BEFOR E TAKING ANY DECISION. RELIANCE WAS ALSO PLACED UPON THE DECISION IN K.P. VARGEES VS. ITO (131 ITR 597) (SC); AND AMERICAN BANK EXPRESS LTD. VS. DCIT (65 ITD 67) (MUMBAI). 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATERIAL AVAILABLE ON THE FIL E. BRIEF FACTS ARE THAT OBJECTS OF THE TRUST, AS PER TRUST DEED, ARE IDENTI CAL IN ALL THE CASES. THE PRESENT APPELLANTS APPLIED FOR REGISTRATION BEFORE THE LD. CIT-UJJAIN WHICH WAS DENIED. BEFORE THE LD. CIT, THE PRESENT ASSESSEES P LACED RELIANCE UPON THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT AS WE LL AS THE JURISDICTIONAL TRIBUNAL. THE LD. CIT DENIED REGISTRATION ON THE GR OUND THAT THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AND SLP IS PENDING BEFORE THE HONBLE AP EX COURT. THE RELEVANT PORTION FOR DENIAL REGISTRATION HAS BEEN MENTIONED IN PARA 5 OF THE IMPUGNED ORDER, WHICH IS NOT BEING REPRODUCED HEREUNDER FOR THE SAKE OF BREVITY AND ALSO BEING THE MATTER OF RECORD. BEFORE COMING TO A NY CONCLUSION, BRIEFLY, THE OBJECTS OF THE APPELLANT TRUST ARE SUMMARISED AS UN DER: A) TO ARRANGE FOR NYAZ & MAJLIS (LUNCH & DINNER) ON RELIGIOUS OCCASION OF BIRTH ANNIVERSARY AND URS MUBARAK OF AWLIYA E QIRAM (SA) & SAINTS OF DAWOODI BOHRA COMMUNITY. 4 B) TO ARRANGE FOR LUNCH & DINNER ON RELIGIOUS OCCASIONS & AUSPICIOUS DAYS OF DAWOODI BOHRA COMMUNITY. C) FOR THE BETTERMENT OF DAWOODI BOHRA COMMUNITY TO GIVE AND TAKE QARDAN HASANA ACCORDING TO FARMAN OF QURANE MAJID. D) TO ARRANGE FOR RELIGIOUS EDUCATION AND TO ESTABLISH MADARSA AND SUCH ORGANISATION. E) TO CARRY OUT ALL RELIGIOUS ACTIVITIES ACCORDING TO SHARIAT AND DIRECTION OF SHARIAT E MOHAMMEDIYAH FOR THE PROSPERITY OF THE DAWOODI BOHRA COMMUNITY. 4. ON IDENTICAL FACTS, THE INCOME TAX APPELLATE TRI BUNAL, INDORE BENCH, INDORE IN THE CASE OF DAWOODI BOHRA JAMAT & OTHERS VS. CIT VIDE ORDER DATED 28.3.2008 (2009) [317 ITR (AT) 133] (INDORE) DIRECT ED THE LD. CIT TO GRANT REGISTRATION TO ALL THE ASSESSEES U/S 12A/12AA OF T HE ACT. THE RELEVANT PORTION AS CONTAINED IN PARAS 39, 40 & 41 IS REPRODUCED AS UNDER: 39. WE MAY ALSO NOTE THAT THOUGHT THE LEARNED COMMISSIONER OF INCOME-TAX CALLED FOR THE EXPLANATION OF THE ASSESSEE ON THE ISSUE OF NON-MENTIONING OF THE CLAUSE THAT THE RECEIPTS OF THE TRUST WILL BE USED FOR THE OBJECTS OF THE TRUST AND ON DISSOLUTION OF THE TRUST, WHAT WILL HAPPEN TO THE PROPERTIES OF THE TRUST, YET DID NOT GIVE ANY FINDING ON THESE ISSUES. WE MAY NOTE THAT AS PER SECTION 11 OF THE INCOME-TAX ACT, 1961, THE INCOME OF THE TRUST WOULD NOT FORM PART OF THE TOTAL INCOME WHEN THE SAME WAS APPLIED TO ITS OBJECTS AND PURPOSE. SIMILARLY, AS PER SECTION 14 OF THE M.P. PUBLIC TRUSTS ACT, THE PREVIOUS SANCTION OF THE REGISTRAR IS REQUIRED IN CASE OF SALES ETC. OF PROPERTY BELONGING TO A PUBLIC TRUST. AS PER SECTION 27(2)(D) OF THE 5 SAME ACT, THE COURT CAN PROVIDE SCHEME OF MANAGEMENT OF THE TRUST PROPERTY. LIKEWISE, THE SAFEGUARD IS PROVIDED BY EMPOWERING THE ASSESSING OFFICER IN THIS REGARD IN THE SECOND PROVISO TO SECTION 11(3A) OF THE INCOME-TAX ACT. THESE ARE THE SUFFICIENT SAFEGUARDS PROVIDED UNDER THE INCOME-TAX ACT AS WELL AS UNDER THE M.P. PUBLIC TRUSTS ACT THEREFORE EVEN THOUGH THE LEARNED COMMISSIONER OF INCOME-TAX DID NOT DECIDE THESE ISSUES BUT HER APPREHENSION IN THE SHOW-CAUSE NOTICE WAS MISCONCEIVED. 40. IN VIEW OF THE ABOVE FINDINGS, WE ARE OF THE VIEW THAT THE ASSESSEE IS A PUBLIC RELIGIOUS TRUST AND THAT THE ACTION OF THE COMMISSIONER OF INCOME-TAX IN REFUSING TO GRANT REGISTRATION TO THE ASSESSEE-TRUST ON THE GROUND OF VIOLATION OF THE PROVISIONS, OF SECTION 13(1)(B) AND 13(1)(C) OF THE ACT IS NOT JUSTIFIED ESPECIALLY WHEN THE LEARNED COMMISSIONER OF INCOME-TAX HAD NOT DOUBTED EITHER THE NATURE OF ITS OBJECTS OR GENUINENESS OF THE ACTIVITIES OF THE TRUST. IN THIS VIEW OF THE MATTER, WE SET ASIDE THE IMPUGNED ORDER AND DIRECT THE LEARNED COMMISSIONER OF INCOME-TAX, UJJAIN, TO GRANT REGISTRATION TO THE ASSESSEE-TRUST UNDER SECTION 12A/12AA OF THE INCOME-TAX ACT. 41. AS A RESULT, THE APPEAL OF THE ASSESSEE-TRUST IS ALLOWED. 5. AGAINST THE AFORESAID ORDER, THE DEPARTMENT PREF ERRED APPEAL BEFORE THE HONBLE JURISDICTIONAL HIGH COURT, WHEREIN, VIDE OR DER DATED 19.6.2009, THE APPEALS OF THE REVENUE WERE DISMISSED. THE RELEVANT PORTION AS CONTAINED IN PARAS 13 TO 15 ARE REPRODUCED HEREUNDER: 13. IN THIS APPEAL, THE TRIBUNAL ON THE BASIS OF THE EVIDENCE LED BY BOTH THE PARTIES HAS RECORDED A FINDING THAT THE RESPONDENT IS A PUBLIC RELIGIOUS 6 TRUST. THE APPELLANT HAS NEITHER ASSAILED THE AFORESAID FINDING RECORDED BY THE TRIBUNAL AS PERVERSE NOR THE COUNSEL FOR THE APPELLANT HAS BEEN ABLE TO POINT OUT ANY PERVERSITY IN THE SAID FINDING. THEREFORE, THIS FINDING IS BINDING ON THIS COURT. WE, THEREFORE, FIND NO GOOD REASON TO INTERFERE IN THE SUCH FINDING OF FACT. 14. A PERUSAL OF THE ORDER OF THE TRIBUNAL ALSO INDICATES THAT THE SAME ISSUE HAD COME UP IN RESPECT OF GRANT OF REGISTRATION TO DAWOODI BOHRA JAMAT BEFORE THE ITAT, AHMEDABAD BRANCH. THE APPLICATION FOR REGISTRATION SUBMITTED BY DAWOODI BOHRA JAMAT WAS REJECTED BY CIT BUT IN APPEAL THE ITAT, AHMEDABAD BRANCH BY ORDER DATED 10.3.2006 HAD HELD THE SAID ASSESSEE TO BE ENTITLED FOR REGISTRATION UNDER SECTION 12A OF THE ACT. THIS ALSO SHOWS THAT NOT ONLY THE ITAT INDORE BUT ITAT IN OTHER STATES ON THE SAME FACTS HAVE FOUND THE TRUST OF DAWOODI BOHRA JAMAT LOCATED WITHIN THEIR JURISDICTION IS ENTITLED TO CLAIM REGISTRATION UNDE R THE ACT. 15. THUS, THIS COURT ANSWERS THE FIRST QUESTION BY HOLDING THAT THE QUESTION NO.1 IS CONCLUDED BY FINDING OF FACT RECORDED BY THE TRIBUNAL AND THE TRIBUNAL WAS JUSTIFIED IN HOLDING THAT ALL THE OBJE CTS OF THE TRUST ARE RELIGIOUS IN NATURE. 6. IF THE OBJECTS OF THE TRUST, FINDING OF THE TRIB UNAL, DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT AND THE ARGUMENTS ADVANCED BY THE LD. RESPECTIVE COUNSEL ARE KEPT IN JUXTAPOSITION AND AN ALYSED, ONE CLEAR FACT IS OOZING OUT THAT OBJECTS OF THE PRESENT ASSESSEES AR E OF PUBLIC RELIGIOUS CHARITABLE NATURE. IT IS PERTINENT TO MENTION HERE THAT IN THE CASES OF DAWOODI BOHRA JAMAT, THE TRIBUNAL AT INDORE AS WELL AS AT A HMEDABAD FOUND THAT THE ASSESSEES ARE ENTITLED FOR REGISTRATION U/S 12A OF THE ACT. THE DECISION OF INDORE BENCH WAS DULY AFFIRMED BY THE HONBLE JURIS DICTIONAL HIGH COURT OF 7 MADHYA PRADESH (INDORE BENCHES). IT IS FURTHER PERT INENT TO MENTION HERE THAT THE HONBLE JURISDICTIONAL HIGH COURT BEFORE COMING TO ANY CONCLUSION HAS ALREADY CONSIDERED THE DECISION IN SHRI DHAKAD SAMA J DHARAMSHALA, UJJAIN VS. CIT (2008) (302 ITR 321) (MP), CIT VS. BARKATE SAIF IYAH SOCIETY, (213 ITR 492), CIT VS. CHANDRA CHARITABLE TRUST (206 CTR 418 ), HAZRAT PIR MOHD. SHAH SHAHID ROZA COMMITTEE VS. CIT (63 ITR 490) (SC), IN DIA CEMENT VS. CIT (60 ITR 52) (SC), M. GANPATI MUDLIYAR (53 ITR 623) (SC) . THE CASES (SUPRA) RELIED BY THE LD. CIT, DR, THEREFORE, ARE OF NOT MUCH HELP TO THE REVENUE. IT IS ALSO WORTH MENTIONING HERE THAT THE TRIBUNAL VIDE ORDER DATED 28.3.2008 (SUPRA) HAS CONSIDERED VARIOUS JUDICIAL PRONOUNCEMENTS INCL UDING THE DECISION IN CIT VS. PALGHAT SHADIMAHAL TRUST (254 ITR 212) (SC), RE LIED UPON BY LD. CIT, DR, AND THE DECISION IN STATE OF KERALA VS. SHANTI VERM A JAIN (231 ITR 787) (SC), 302 ITR 321, CIT VS. AGRICULTURAL PRODUCE & MARKET COMMITTEE (291 ITR 419) (BOM), CIT VS. CHANDRA CHARITABLE TRUST (294 ITR 86 ) (GUJ), CIT VS. DEVERDHAN MADHAVLAL GENDA TRUST (230 ITR 714) (MP), CIT VS. GUJARAT MARITIME BOARD (289 ITR 139) (GUJ), GULAM MOHIDIN T RUST VS. CIT (248 ITR 587) ( J & K), NEW LIFE IN CHRIST EVANGELILSTIC ASS OCIATION VS. CIT (246 ITR 532) (MAD) AND HOST OF OTHER JUDICIAL PRONOUNCEMENT S. IT CAN BE SAID THAT THE DECISION IN THE CASE OF PALGHAT SHADIMAHAL TRUST (S UPRA), RELIED BY LD. CIT, DR HAS BEEN DULY CONSIDERED, THEREFORE, IN THE ABSENCE OF ANY CONTRARY FINDING TO THE EFFECT THAT THE OBJECTS OF THE ASSESSEE ARE NOT OF CHARITABLE NATURE, THEREFORE, MERELY ON THE GROUND THAT SLP HAS BEEN F ILED BEFORE THE HONBLE 8 APEX COURT IS NOT A GOOD GROUND FOR DENYING REGISTR ATION TO THE PRESENT APPELLANTS. IT IS NOT THE CASE THAT THE HONBLE APE X COURT HAS STAYED THE OPERATION OF THE ORDER OF HONBLE JURISDICTIONAL HI GH COURT. SINCE THE FACTS ARE QUITE IDENTICAL AND THE OBJECTS OF THE PRESENT APPE LLANTS ARE PURELY RELIGIOUS CHARITABLE NATURE, THEREFORE, THERE IS A FORCE IN T HE CONTENTION OF THE ASSESSEES. EVEN OTHERWISE, FOR THE PURPOSE OF REGIS TRATION U/S 12AA, WHAT AUTHORITIES HAVE TO SATISFY THEMSELVES ABOUT IS GEN UINENESS OF ACTIVITIES OF TRUST AND INSTITUTION AND HOW INCOME DERIVED FROM T RUST PROPERTY IS APPLIED TO CHARITABLE OR RELIGIOUS PURPOSES AND NOT NATURE OF ACTIVITY BY WHICH INCOME WAS DERIVED BY TRUST. MERE REGISTRATION U/S 12AA WO ULD NOT, IN ITSELF, BE A GROUND, MUCH LESS A CONCLUSIVE PROOF, FOR EXCLUDING SUCH INCOME DESCRIBED IN SECTIONS 11 & 12 FROM THE TOTAL INCOME OF THE PERSO N/ASSESSEE OR TRUST FROM INCOME OF THE PREVIOUS YEAR. IF THE TRUST OR INSTIT UTION IS NOT REGISTERED U/S 12AA, IT WOULD NOT BE ABLE TO CLAIM ANY EXEMPTION O R EXCLUSION OF ITS INCOME FROM THE TOTAL INCOME OF THE PREVIOUS YEAR, EVEN IF SUCH INCOME IS OTHERWISE LIABLE TO BE EXCLUDED UNDER ANY OF THE CLAUSES OF S EC. 11 OR SEC. 12. A READING OF PROVISIONS OF SUB-CLAUSES (A) AND (B) OF SEC. 12 AA MAKES IT CLEAR THAT THE COMMISSIONER HAS TO SATISFY HIMSELF ABOUT THE GENUI NENESS OF THE ACTIVITIES OF THE TRUST OR INSTITUTION AND ALSO ABOUT THE OBJECTS OF THE TRUST OR THE INSTITUTION. OUR VIEW FINDS SUPPORT FROM THE DECISI ON IN CIT VS. RED ROSE SCHOOL, 163 TAXMAN 19 (ALL), S.H. GOWDA CHARITABLE TRUST VS. DIRECTOR OF INCOME-TAX (EXEMPTION) (155 TAXMAN 466) (KAR), THER EFORE, THE LD. CIT IS 9 DIRECTED TO GRANT REGISTRATION U/S 12A/12AA OF THE ACT TO THE PRESENT APPELLANTS. IN THE RESULT, ALL THESE APPEALS OF THE PRESENT AS SESSEES ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27.11.2009. SD/- SD/- (V.K. GUPTA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 27.11.2009 {VYAS} COPY TO: APPELLANTS/RESPONDENTS/CIT/ CIT(A)/DR
