MANOCKJEE COWASJEE PETIT CHARTIES, MUMBAI V. DIT (E), MUMBAI

ITA 4881/MUM/2009

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 59847 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 02-12-2011
• Assessment Year: misc
• Appeal Filed On: 25-08-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MADHUR AGARWAL
• Keywords: Charitable institution; Difference of opinion
• Section: 11; 12A; 12AA

Judgement Text

MANOCKJEE COWASJEE PETIT CHARITIES IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI MUMBAI MUMBAI MUMBAI H HH H BENCH BENCH BENCH BENCH MUMBAI BENCHES, MUMBAI MUMBAI BENCHES, MUMBAI MUMBAI BENCHES, MUMBAI MUMBAI BENCHES, MUMBAI BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI P M JAGTAP P M JAGTAP P M JAGTAP P M JAGTAP, , , , AM AMAM AM & & & & SHRI SHRI SHRI SHRI VIJAY PAL RAO, JM VIJAY PAL RAO, JM VIJAY PAL RAO, JM VIJAY PAL RAO, JM ITA NO. ITA NO. ITA NO. ITA NO. 4881/MUM/2009 4881/MUM/2009 4881/MUM/2009 4881/MUM/2009 MANOCKJEE COWASJEE PETIT CHARITIES THE B D PETIL PARSEE GENERAL HOSPITAL B D PETIT ROAD, CUMBALLA HILL MUMBAI VS THE DIRECTOR OF INCOME TAX (EXEMPTION) MUMBAI (APPELLANT (APPELLANT (APPELLANT (APPELLANT ) )) ) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) PAN NO. PAN NO. PAN NO. PAN NO. AABTM3090R AABTM3090R AABTM3090R AABTM3090R ASSESSEE BY MR MADHUR AGARWAL REVENUE BY MR GOLI SRINIVAS RAO DT.OF HEARING 3 RD FEB 2012 DT OF PRONOUNCEMENT 22 ND FEB 2012 ORDER ORDER ORDER ORDER PER PER PER PER VIJAY PAL RAO VIJAY PAL RAO VIJAY PAL RAO VIJAY PAL RAO, , , , JM JMJM JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 29.6.2009 PASSED BY THE DIT(EXP) U/S 12AA(1)(B)(II) R.W.S 12A OF THE IT ACT WHEREBY THE APPLICATION OF THE ASSESSEE FOR REGISTRATION WAS RE JECTED. 2 AGGRIEVED BY THE ORDER OF THE DIT(EXP), THE ASSES SEE FILED AN APPEAL BEFORE THE TRIBUNAL. THERE WAS A DIFFERENCE OF OPI NION BETWEEN THE MEMBERS OF THE DIVISION BENCH OF THIS TRIBUNAL. THE LD AM WAS OF THE VIEW THAT THE COMMISSIONER WAS NOT JUSTIFIED IN REJECTING THE APP LICATION FOR REGISTRATION AND ACCORDINGLY DIRECTED TO REGISTER THE ASSESSEES SOC IETY U/S 12A. WHEREAS THE JM WAS OF THE VIEW THAT DIT(EXP) HAS TAKEN A CORRECT A ND PROPER VIEW IN REJECTING THE APPLICATION OF THE ASSESSEE FOR REGISTRATION U/ S 12A. 3 AS THERE WAS DIFFERENCE OF OPINION BETWEEN THE ME MBERS OF THE DIVISION BENCH, THEY REQUESTED THE HONBLE PRESIDENT U/S 254 (4) OF THE I T ACT TO MANOCKJEE COWASJEE PETIT CHARITIES 2 CONSTITUTE A THIRD MEMBER FOR RESOLVING THE POINTS OF DIFFERENCE. ACCORDINGLY, THE HONBLE PRESIDENT REFERRED THE POINTS OF DIFFERENCE TO THE LD THIRD MEMBER. WE QUOTE THE POINTS OF DIFFERENCE AS UNDER: WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE , DIRECTOR OF INCOME TAX (EXEMPTION) MUMBAI HAD ERRED IN NOT REGI STERING THE ASSESSEES INSTITUTION U/S 12AA OF THE INCOME TAX A CT, INTER ALIA, ON THE GROUND THAT INDENTURE OF THE ASSESSEE TRUST IS NOT CHARITABLE . 4 THE LD THIRD MEMBER HAS CONCURRED WITH THE VIEW E XPRESSED BY THE LD AM VIDE ORDER DATED 14.12.2011 AS UNDER: 22 COMING BACK TO THE FACTS OF THE INSTANT CASE IT IS SEEN THAT THE TRUST DEED ADEQUATELY PROVIDES THAT, AFTER THE DEATH OF T HE SETTLER, THE INCOME FROM THE TRUST PROPERTY IS TO BE USED FOR CHARITABL E PURPOSES, WHICH ARE COVERED UNDER SECTION 2(15) OF THE ACT. THIS SHOWS THAT THE OBJECTS OF THE TRUST, AFTER THE DEATH OF SETTLOR, ARE FULLY CHARIT ABLE. THE ASSESSEE PRODUCED COPIES OF ITS FINAL ACCOUNTS FOR LAST THRE E YEARS ENDING ON 31ST MARCH, 2006 AND 2007 AND 2008 BEFORE THE LEARNED CI T. IT WAS SPECIFICALLY CLAIMED THAT NOT EVEN A SINGLE PAISA WAS APPLIED FO R THE BENEFIT OF ANY LINEAL DESCENDANTS OF THE FATHER OF THE SETTLOR. TH E LEARNED CIT, DESPITE THE AVAILABILITY OF AUDITED ACCOUNTS BEFORE HIM FOR THE LAST THREE YEARS, FAILED TO POINT OUT ANY SINGLE INSTANCE IN WHICH THE INCOM E OF THE TRUST WAS NOT UTILIZED FOR THE CHARITABLE PURPOSES SET OUT IN THE TRUST DEED OR THE MONEY WAS APPLIED FOR THE LINEAL DESCENDANTS OF THE FATHE R OF THE SETTLOR. EVEN IF ANY AMOUNT IS ACTUALLY SPENT ON THE RELATIVES OF TH E SETTLORS, THEN THERE IS SECTION 13(3) ENABLING THE AO TO REFUSE EXEMPTION U /S 11 READ WITH SECTION 13 TO THAT EXTENT AND THAT TOO IN THE YEAR IN WHICH SUCH AMOUNT IS SPENT. IT CANNOT BE A REASON TO REFUSE REGISTRATION U/S 12AA. AS S SUCH IT IS NOTICED THAT BOTH THE CONDITIONS U/S 12AA WARRANTIN G THE REGISTRATION OF THE TRUST, ARE FULLY SATISFIED IN THE PRESENT CASE. IN MY CONSIDERED OPINION THE LD CIT WAS NOT JUSTIFIED IN REFUSING THE REGIST RATION FROM THE ASSESSMENT YEAR IMMEDIATELY FOLLOWING THE FINANCIAL YEAR IN WHICH SUCH APPLICATION WAS MADE. I, THEREFORE, ANSWER THE QUES TION IN AFFIRMATIVE BY HOLDING THAT THE DIRECTOR OF INCOME TAX (EXEMPTION) (MUMBAI) ERRED IN NOT REGISTERING THE ASSESSEES INSTITUTION U/S 1 2AA OF THE INCOME TAX ACT. 23. FOR THE FOREGOING REASONS I AGREE WITH THE VIEW EXPRESSED BY THE LEARNED ACCOUNTANT MEMBER. THE REGISTRY OF THE TRIB UNAL IS DIRECTED TO LIST THIS MATTER BEFORE THE DIVISION BENCH FOR PASSING O F ORDER IN ACCORDANCE WITH MAJORITY VIEW. 5 NOW, THIS APPEAL IS PLACED BEFORE US FOR PASSING FOR CONSEQUENTIAL/CONFORMITY ORDER. ACCORDINGLY, THE AP PEAL OF THE ASSESSEE STANDS ALLOWED AS PER THE MAJORITY VIEW. MANOCKJEE COWASJEE PETIT CHARITIES 3 6 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE I S ALLOWED. ORDER PRONOUNCED ON THE 22 ND DAY OF FEB 2012 SD/- SD/- ( (( ( P M JAGTAP P M JAGTAP P M JAGTAP P M JAGTAP ) )) ) ACCOUNTANT MEMBER ( (( ( VIJAY PAL RAO VIJAY PAL RAO VIJAY PAL RAO VIJAY PAL RAO ) )) ) JUDICIAL MEMBER PLACE: MUMBAI : DATED: 22 ND FEB 2012 RAJ* RAJ* RAJ* RAJ* COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI