THE DUBARIA PARIVAR CHARITABLE TRUST, MUMBAI V. DIT (E), MUMBAI

ITA 4890/MUM/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3464 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 09-08-2016
• Assessment Year: 2013-2014
• Appeal Filed On: 25-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B JAYA KUMAR
• Keywords: Charitable institution
• Section: 12A; 12AA; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D, MUMBAI BEFORE SHRI SAKTIJIT DEY(JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 4890/MUM/2013 THE DUBARIA PARIVAR CHARITABL TRUST VS. DIT(E) 75 MINT RD, SHREEJI HOUSE 6 TH FLOOR, 3 RD FLOOR, FORT PIRAMAL CHAMBERS MUMBAI- 400001 PAREL, MUMBAI-400012 PAN NO. AABTD5307N (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI. HARSH R. SHAH SHRI PARAS S. SAVLA RESPONDENT BY : SHRI. B. JAYA KUMAR DATE OF HEARING : 09/08/201 6 DATE OF PRONOUNCEMENT : 26/08/2016 ORDER PER N.K. PRADHAN, A.M THIS APPEAL HAS BEEN FILED BY THE APPLICANT- TRUST. IT IS DIRECTED AGAINST THE ORDER DATED 25/04/2013 PASSED BY THE DIRECTOR O F INCOME TAX (EXEMPTIONS)[IN SHORT DIT(E)] MUMBAI UNDER SECTIO N 12AA (1)(B)(II) R.W.S 12A OF THE INCOME TAX ACT 1961, (HEREINAFTER THE ACT) . 2. BRIEFLY STATED, THE FACTS ARE THAT THE APPLICANT - TRUST FILED AN APPLICATION FOR REGISTRATION IN THE PRESCRIBED FORM NO. 10A ON 17/10/2012 UNDER SECTION 12 A OF THE ACT. IT WAS CONSTITUTED BY A DEED OF TR UST DATED 26/02/2007. IT WAS REGISTERED WITH THE CHARITY COMMISSIONER, MUMBAI ON 16/04/2007. THE DIT(E) REJECTED THE APPLICATION FOR THE GRANT OF REGISTRAT ION ON THE FOLLOWING REASONS: A. THAT THE TRUST DEED DOES NOT HAVE A DISSOLUTION CLAUSE TO THE EFFECT THAT THE TRUST IS IRREVOCABLE AND THAT IF FOR SOME REASO N ITS OBJECTS CANNOT BE CARRIED OUT BY THE TRUSTEES WHO DECIDE TO DISSOLVE OR WIND UP THE TRUST, THEN AS PER THE PROVISIONS OF THE BOMBAY PUBLIC TRUST AC T 1950, ITS NET ASSETS WILL BE GIVEN TO ANOTHER TRUST HAVING SIMILAR OBJECTS AND UNDER NO CIRCUMSTANCES, THESE WILL BE DISTRIBUTED AMONG THE TRUSTEES. B. THAT THE TRUST DEED OF THE APPLICANT CONTAINS MI XED CHARITABLE AND UNCHARITABLE OBJECTS. C. THAT THE TRUST DEED OF THE APPLICANT HAS AMONG I TS OBJECTS RELIGIOUS ONES. D. THAT NO ACTIVITIES HAVE BEEN CARRIED OUT BY THE APPLICANT TILL THE DATE OF APPLICATION AND AS A RESULT GENUINENESS OF ACTIVITI ES CARRIED ON BY THE APPLICANT COULD NOT BE VERIFIED. 3. BEFORE US, THE LEARNED COUNSEL OF THE APPLICANT SUBMITTED THAT THE TRUST IS REGISTERED UNDER THE BOMBAY PUBLIC TRUST ACT, 19 50 VIDE REGISTRATION NO. E- 24096 AND IN THE EVENT THE TRUST IS WOUND UP, THE C ORPUS AND THE PROPERTIES WOULD GET TRANSFERRED TO ANOTHER TRUST HAVING SIMIL AR OBJECTS. REGARDING THE DISSOLUTION CLAUSEHE RELIED ON THE ORDER DATED 18/07/2014 OF THE ITAT MUMBAI E BENCH IN THE CASE OF TARA EDUCATIONAL AND CHARITABLE TRUST VS. DIT(E) FOR THE AY 2012-13 (ITA NO. 1247/MUM/2013) AND ITAT MUMBAI C BENCH IN THE CASE OF M/S ORGANISATION FOR AUTISTIC INDIVIDUALS VS. OFFICE OF THE DIRECTORATE OF INCOME TAX(E) DATED 30/09/2013 (ITA NO. 1935 /M/2013). REGARDING GRANTING REGISTRATION UNDER SECTION 12AA IN THE CASE OF A TRUST WITH BOTH CHARITABLE AND RELIGIOUS OBJECTS, T HE LEARNED COUNSEL PLACED RELIANCE ON THE DECISION OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF DIT(E) VS. SEERVI SAMAJ TAMBARAM TRUST (2014) 362 ITR 199 (MAD) AND THE ORDER OF THE ITAT HYDERABAD ABENCH IN THE CASE OF SREE PINNAMANENI SREE RAMDASU CHARITABLE TRUST VS. DIT(E) DATED 26/11/2013 (ITA NO. 710/HYD/2013). REGARDING THE CARRYING OUT OF THE ACTIVITIES BY THE TRUST, THE LEARNED COUNSEL RELIED ON SEERVI SAMAJ TAMBARAM TRUST (SUPRA) AND M/S ORGANISATION FOR AUTISTIC INDIVIDUALS (SUPRA). 4. BEFORE US THE LEARNED DR SUBMITTED THAT THE PROC EDURE FOR REGISTRATION HAS UNDERGONE A CHANGE AFTER THE INSERTION OF SECTI ON 12AA BY THE FINANCE (2) ACT 1996 WITH EFFECT FROM 01/04/1997. HE ALSO R ELIED ON THE ORDER OF THE ITAT RAJKOT BENCH SMCIN THE CASE OF MOHANLAL KANJIBHAI PANSARA EDUCATION & CHARITABLE TRUST VS. CIT (2013) 36 TAXMANN.COM 338 (RAJKOT). THE LEARNED DR SPECIFICALLY REFERRED TO CLAUSE 33 O F THE DEED OF TRUST WHICH READS AS UNDER : 33. REIMBURSEMENT OF TRUSTEES: THE MANAGING TRUSTEE AND OTHER TRUSTEES SHALL BE E NTITLED TO REIMBURSE THEMSELVES OF THE AMOUNT BY THEM FOR THE TRUST OUT OF THEIR OWN P OCKETS. THE DECISION OF MANAGING TRUSTEE IN THIS RESPECT SHALL BE FINAL AND CONCLUSIVE. 5. WE HAVE CAREFULLY CONSIDERED THE MATTER AND ALSO PERUSED THE MATERIAL PLACED ON RECORD BEFORE US. WE HAVE GONE T HROUGH THE OBJECTS OF TRUST. WE FIND THAT A LARGE PORTION OF THE OBJECTS AIMS TO ACHIEVE CHARITABLE PURPOSES. ONLY A FEW OBJECTS ARE MEANT FOR RELIGIOU S PURPOSES. IN THE CASE OF CIT VS. DAWOODI BOHRA JAMAT (2014) 364 ITR 31 (SC) , IT IS HELD THAT WHEN THE OBJECTS OF THE ASSESSEE ARE NOT INDICATING OF A WHO LLY RELIGIOUS PURPOSE BUT ARE COLLECTIVELY INDICATIVE OF BOTH CHARITABLE AND RELIGIOUS PURPOSES, EXEMPTION CANNOT BE DENIED. THEREFORE, REGISTRATIO N CANNOT BE DENIED TO THE TRUST ON THE ABOVE GROUND. IN THE INSTANT APPEA L, THE OBJECTS OF THE APPLICANT ARE COLLECTIVELY INDICATIVE OF BOTH CHARI TABLE AND RELIGIOUS PURPOSES WE FIND THAT THE RELIANCE PLACED BY THE LEARNED COU NSEL OF THE APPLICANT ON THE DECISION OF THE HONBLE MADRAS HIG H COURT ON SEERVI SAMAJ TAMBARAM TRUST (SUPRA) WHEREIN IT HAS BEEN HELD THAT REGISTRATION UNDER SECTION 12AA CAN BE GRANTED TO THE TRUST WITH BOTH CHARITABLE AND RELIGIOUS OBJECTS AND THAT THE TRUST IS ENTITLED FOR REGISTRA TION UNDER SECTION 12AA WHEN ACTIVITIES WERE NOT STARTED BY THE TRUST, IS SQUARE LY APPLICABLE TO THE PRESENT CASE. WE ALSO FIND THAT THE ORDERS OF THE COORDINATE BENC H IN THE CASE OF TARA EDUCATIONAL AND CHARITABLE TRUST (SUPRA) AND M/S ORGANISATION FOR AUTISTIC INDIVIDUALS (SUPRA) IN RESPECT OF DISSOLUTION CLAUSE ARE SQUARELY APPLICABLE TO THE PRESENT CASE. WE FURTHER FIND THAT THE ORDER IN THE CASE OF MOHANLAL KANJIBHAI PANSARA EDUCATION & CHARITABLE TRUST (SUPRA) RELIED ON BY THE LEARNED DR RELATES TO A CASE WHEREIN AS PER THE TRUST DEED THE ACTIVITIES PROPOSED TO BE CARRIED OUT WERE NOT CHARITABLE IN NATURE. THIS IS NOT THE CASE IN THE PRESENT APPEAL. REGARDING THE CHANGE IN THE POSITION OF LAW AFTER T HE INSERTION OF SECTION 12AA, WE FIND THAT THE DECISIONS RELIED ON BY THE LEARNED COUNSEL OF THE APPLICANT RELATE TO THE AMENDED SECTION. 6. IN VIEW OF THE ABOVE, WE DIRECT THE DIRECTOR OF INCOME TAX (EXEMPTION), MUMBAI TO GRANT REGISTRATION TO THE APPLICANT UNDER SECTION 12AA OF THE ACT. 7. IN THE RESULT, THE APPEAL FILED BY THE APPLICANT IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 26/08/2016. SD/- SD/- (SAKTIJIT DEY) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMB ER MUMBAI; DATED: 26/08/2016 AG(ON TOUR) COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI DATE INITIALS DICTATED ON COMPUTER 1. DRAFT DICTATED ON: 09/08/2016 SR. PS/PS 2. DRAFT PLACED BEFORE AUTHOR: 11/08/2016 SR. PS/PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER: JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECO ND MEMBER: JM/AM 5. APPROVED DRAFT COMES TO THE SR. PS/PS: SR. PS/PS 6. ORDER PRONOUNCED ON: 26/08/2016 SR. PS/PS 7. FILE SENT TO THE BENCH CLERK: 26/08/2016 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK: SR. P S/PS 9. DATE ON WHICH FILE GOES TO AR 10. DATE OF DISPATCH OF ORDER: