NAVKAR NO RANKAR, MUMBAI V. DIT (E), MUMBAI

ITA 5080/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84333 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 25-09-2014
• Assessment Year: 2013-2014
• Appeal Filed On: 05-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH RANJAN PRASAD
• Assessee Lawyers: NARAYAN ATAL
• Keywords: Charitable institution
• Section: 12A; 12AA

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNALB BENCH, MUMB AI , , BEFORE SHRI JOGINDER SINGH, JM AND SHRI SANJAY ARORA, AM ITA NOS.5080/MUM/2013 ASSESSMENT YEARS-2013-14 NAVKAR NO RANKAR, 301, SHWESH HOUSE, PLOT NO.75, 2 ND LANE, HINDU COLONY, DADAR(E), MUMBAI-400014 / VS. THE DIRECTOR OF INCOME-TAX (EXEMPTION), 6 TH FLOOR, PIRAMAL CHAMBERS, PAREL, MUMBAI-400012 ./ PAN :AABTN7127L ( / APPELLANT ) .. ( / RESPONDENT ) ! ' / APPELLANT BY: SHRI NARAYAN ATAL ! ' / RESPONDENT BY : SHRI RAJESH RANJAN PRASAD # $%& ! ' ( / DATE OF HEARING 26/11/2014 )*+ ! ' ( / DATE OF PRONOUNCEMENT : 26/11/2014 - / O R D E R PER JOGINDER SINGH, JM: THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 21/05/2013 OF THE LD. DIRECTOR OF INCOME-TAX (EXEMP TION), MUMBAI, REFUSING REGISTRATION U/S 12A OF THE INCOME-TAX ACT , 1961. 2. AT THE TIME OF HEARING, SHRI NARAYAN ATAL, LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE APPLICATION FOR REG ISTRATION U/S 2 12A OF THE ACT WAS REJECTED WITHOUT ASSIGNING ANY R EASON AS THE TRUST WAS NEWLY CONSTITUTED BY A TRUST DEED DATED 0 1/06/2012 AND WAS REGISTERED WITH THE CHARITY COMMISSIONER ON 15/10/2012. IT WAS CONTENDED THAT THE OBJECTS OF T HE ASSESSEE TRUST ARE OF CHARITABLE IN NATURE AND MUCH ACTIVITI ES WERE NOT CARRIED OUT AS THE TRUST IS IN ITS INITIAL STAGE ON LY. IT WAS ALSO CONTENDED THAT THE NECESSARY DETAILS AND DOCUMENTS WERE DULY FILED BEFORE THE CONCERNED AUTHORITIES. ON THE OTH ER HAND, SHRI RAJESH RANJAN PRASAD, LD. CIT-DR CONTENDED THAT THE TRUST DEED DOES NOT HAVE A DISSOLUTION CLAUSE; THEREFORE, THE REGISTRATION WAS RIGHTLY DENIED TO THE ASSESSEE. THE CRUX OF TH E ARGUMENT IS IN DEFENDING THE IMPUGNED ORDER. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND P ERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE WAS CREATED BY A TRUST DEED DATED 01/06/20 12, RECOGNIZE/REGISTERED WITH THE CHARITY COMMISSIONER VIDE COMMUNICATION DATED 15/10/2012. THE ASSESSEE FILED AN APPLICATION FOR REGISTRATION U/S 12A OF THE INCOME- TAX ACT, 1961, (HEREINAFTER THE ACT) ON THE PRESCRIBED FORM NO.10A ON 01/11/2012. WE NOTE THAT THE LD. DIT(EXEMPTION), R EJECTED THE APPLICATION OF THE ASSESSEE ON THE GROUND THAT THER E IS NO DISSOLUTION CLAUSE IN THE TRUST DEED TO THE EFFECT THAT THE TRUST IS IRREVOCABLE AND IF, DUE TO SOME REASON, THE OBJECTS ARE NOT CARRIED OUT BY THE TRUST, THEN WHO WILL DECIDE TO DISSOLVE OR WIND UP THE TRUST AND THUS THE TRUST IS NOT ENTITLED FOR REGIST RATION. 3 2.2. WE HAVE PERUSED THE OBJECTS OF THE ASSESSEE TR UST, WHICH ARE REPRODUCED HEREUNDER FOR READY REFERENCE. 4. OBJECTS OF THE TRUST:- THE AIMS AND OBJECTS OF TRUST ARE:- A) TO MAKE NECESSARY SCHEMES FOR THE WELFARE, PROGR ESS, UNITY, BETTERMENT AND DEVELOPMENT OF PEOPLE AT LARGE IN SOCIAL, FORMA L, MORAL, LOGICAL, INTELLECTUAL, CULTURAL, ECONOMIC, EDUCATIONAL, MEDI CAL, HYGIENE, HEALTH AND SUCH OTHER FIELDS AND TO MAKE ALL POSSIBLE EFFORTS TO EXECUTE THE SAME AND TO ESTABLISH AND CONDUCT NECESSARY ACTIVITIES AND DIVI SIONS FOR THE SAME. B) TO ESTABLISH, DEVELOP, SUPPORT, AFFILIATE, CONDU CT AND/OR MAINTAIN TRAINING CENTERS, WORK-CENTERS, SPORTS COMPLEXES, L IBRARIES, GYMNASIUMS, GYMKHANAS, RECREATION CENTERS, MEDITATION CENTERS, YOGA CENTERS, BALAMANDIRS, SCHOOLS, COLLEGES, CLINICS, DISPENSARI ES, NURSING HOMES, HOSPITALS, MEDICAL CENTERS, HOSTELS, RESEARCH CENTE RS, ORPHANAGES, SANATORIUMS, DHARMASHALAS, COMMUNITY HALLS, OLD AGE HOMES, ETC. C) TO ORGANIZE, SPONSOR AND HOLD LECTURES, SEMINARS , EXHIBITIONS, SHIBIRS, CAMPS, TOURS, GATHERINGS, ETC. AND TO PUBLISH AND D ISTRIBUTE BOOKLETS, LEAFLETS, MAGAZINES, BOOKS, PAPERS, ETC. IN PROMOTI ON OF KNOWLEDGE OF PUBLIC IN ALL OR ANY OF THE AFORESAID OBJECTS. D) TO DEVELOP THE MINDS OF PEOPLE AT LARGE THROUGH THE MEDIA AND AUDIO VIDEO VISUALS. E) TO ENCOURAGE THE STUDENTS BY ESTABLISHING AND SU PPORTING SCHOLARSHIPS, PRIZES, AWARDS, TROPHIES, ETC. AT ANY SCHOOL, COLLE GE AND/OR INSTITUTION ETC. F) TO ESTABLISH AND MAINTAIN INFORMATION, DISSEMINA TING CENTERS ON HUMAN AILMENTS TO THE AFFLICTED AND AMONGST THE GENERAL P UBLIC. G) TO GRANT, HELP AND GIVE ASSISTANCE TO POOR AND N EEDY SECTION/CLASS OF THE SOCIETY AND BIRDS AND ANIMALS DURING EPIDEMIC, FIRE , FLOOD, FAMINE, EARTHQUAKE, TEMPEST, OR ANY UNFORESEEN CALAMITY, WA R OR WARLIKE OPERATIONS, CIVIL COMMOTION, RIOTS, ETC. OR OTHERWI SE AID AND ASSIST IN THE RELIEF OR REHABILITATION OPERATIONS. H)TO MAKE ALL EFFORTS TO ALLEVIATE POVERTY AND BRIN G ABOUT BETTER LIVING CONDITIONS AMONG THE PEOPLE AT LARGE BY IMPLEMENTIN G KHADI & VILLAGE INDUSTRIES PROGRAMS AND THE SCHEMES OF STATE AND! O R CENTRAL GOVERNMENT 4 DECLARED FROM TIME TO TIME AND TO START, ENCOURAGE, ASSIST AND CARRY ANY ACTIVITY WHICH IS INCIDENTAL THEREOF. I) TO ARRANGE TOURS AND EDUCATIONAL VISITS OF VARIO US PLACES OF INTERESTS IN INDIA FOR ADVANCEMENT AND PROMOTION OF KNOWLEDGE OF PEOPLE AT LARGE IN RESPECT OF INDIAN HERITAGE AND CULTURE. J) TO ESTABLISH, MAINTAIN AND/OR SUPPORT. PANJARAPO LE, GAUSHALAS, VETERINARY CENTERS, KABUTAR-KHANAS, ETC. FOR THE RE LIEF OF BIRDS AND ANIMALS. K) TO ESTABLISH, MAINTAIN AND/OR SUPPORT CHHAS-KEND RAS, FREE DRINKING WATER SUPPLY CENTERS, FOUNTAINS, GARDENS, ETC. TOR THE BENEFITS OF PEOPLE AT LARGE. L) TO EDUCATE THE PEOPLE TO FIGHT AGAINST ALL SOCI AL EVILS AND ILLS LIKE DRUGS, GAMBLING, DOWRIES ETC. M) TO UNDERTAKE, CARRY OUT, PROMOTE AND/OR SPONSOR ANY SCHEME OR PROGRAM OF CONSERVATION OF NATURAL RESOURCES, SOCIA L AFFORESTATION AND PREVENTION OF POLLUTION IN THE ENVIRONMENT AND TO A SSIST THE EXECUTION OF SUCH PROGRAMS EITHER DIRECTLY OR THROUGH ANY AGENCY . N) TO PROPAGATE AND SPREAD THE PRINCIPLE, IDEAS, A ND MESSAGES OF SAINTS, ACHARYAS, SCHOLARS, AND MASTERS LIKE MAHAVEER, GAND HIJI, SWAMI VIVEKANAND, VINOBA BHAVE, ETC. AMONG THE PEOPLE AT LARGE WITH A VIEW TO PROMOTE THE FEELINGS OF BROTHER-HOOD, AHIMSA, LOVE, AFFECTION, ANUKAMPA ETC. 0) TO PROPAGATE AND SPREAD THE PRINCIPLE OF NATURAL AND HEALTHY VEGETARIAN WAY OF LIFE INCLUDING INITIATE, UNDERTAKE, SUPPORT AND AID ANY SCHEME FOR FURTHERANCE OF THE VEGETARIANISM. P) TO DISTRIBUTE MONEY, FREE GOODS, FOODS, AND/OR C LOTHING OR PROVIDING SHELTERS TO THE POOR AND NEEDY PEOPLE AT LARGE. Q) TO ESTABLISH AND/OR RENDER HELP TO ANY INSTITUTI ON OR INDIVIDUALS FOR THE ALLEVIATION OF HUMAN SUFFERINGS. R) TO PROMOTE WELFARE AND UPLIFTMENT OF RURAL AREAS AND PEOPLE OF RURAL AREAS INCLUDING IN PARTICULAR THEIR SOCIAL, AGRICUL TURAL AND ECONOMIC WELFARE AND/OR DEVELOPMENT EITHER DIRECTLY OR THROU GH ANY AGENCY IN ANY MANNER WHATSOEVER. 5 S) TO GIVE SUBSCRIPTION, CONTRIBUTION AND/OR DONATI ON TO ANY PUBLIC CHARITABLE TRUST OR FUND OR INSTITUTION FOR PROMOTI ON OF ALL OR ANY OF THE AFORESAID OBJECTS. T) TO PUT IN JOINT EFFORTS WITH OTHER ORGANIZATIONS FOR HUMANITARIAN ADVANCEMENT. U) TO CO-OPERATE ASSOCIATE OR AFFILIATE WITH ANY OT HER BODY, TRUST, SOCIETY, ASSOCIATION, ORGANIZATION OR INSTITUTION OBJECTS SI MILAR TO THE OBJECTS OF THIS TRUST. V) THE ADVANCEMENT OF ANY OTHER OBJECTS OF GENERAL PUBLIC UTILITY AND TO CARRY ON OTHER ACTIVITIES TO ACHIEVE AND OBTAIN OBJ ECTS MENTIONED HEREINABOVE. 2.3. BROADLY, THE LD. DIT(EXEMPTION) RAISED OBJECTI ON/SUSPICION WITH REGARD TO CLAUSE (B), (C) AND (J) OF THE OBJEC TS. WE HAVE EXAMINED THE NATURE AND SUBSTANCE OF THE OBJECTS AN D SPECIFICALLY WHICH HAVE BEEN OBJECTED TO BY THE LD. DIT(EXEMPTION). IN CLAUSE (B), THE OBJECTS BROADLY PERTAIN TO SPORTS, YOGA, HOSPITALS, HOSTELS, AND RESEARCH CENT RE, ETC. IN CLAUSE (C) BROADLY, THE ASSESSEE IS TO ORGANIZE/SPO NSOR, LECTURES AND TO DISTRIBUTE PUBLICATION MATERIAL FOR THE PUBL IC AT LARGE. IN CLAUSE (J) THE ASSESSEE WAS TO ESTABLISH AND MAINTA INED GAUSHALAS, VETERINARY CENTERS AND RELIEF FOR BIRDS AND ANIMALS. WE DONT FIND ANYTHING IN THESE CLAUSES WHICH IS CO NTRARY TO THE OBJECTS OF CHARITY. THE BENCH, DURING ARGUMENTS, RA ISED A QUESTION TO THE LD. COUNSEL FOR THE ASSESSEE REGARD ING DISSOLUTION CLAUSE. IT WAS EXPLAINED BY THE LD. COUNSEL THAT T HE ASSESSEE TRUST VIDE RESOLUTION DATED 03/11/2014 (REGISTERED NO.E-29120- THE BOMBAY PUBLIC TRUST ACT, 1950 SCHEDULE III- VID E RULE 13 (1)) BY THE BOARD OF TRUSTIES ENSHRINED THE DISSOLUTION CLAUSE WHICH IS REPRODUCED HEREUNDER: 6 RESOLVED THAT IN THE EVENT OF DISSOLUTION OR WIND ING UP OF THE TRUST THE ASSET REMAINING AS ON DATE OF DISSOLUTION SHALL UNDER NO CIRCUMSTANCES BE DISTRIBUTED AMONGST THE TRUSTIES BUT THE SAME SHALL BE TRANSFERRED TO OTHER SIMILAR TRUST/ORGANIZATION WHOSE OBJECTS ARE SIMILAR TO THOSE OF THE TRUST WIT H THE PERMISSION OF THE CHARITY COMMISSIONER/ COURT/ANY OTHER LAW AS MAY BE APPLICABLE FOR THE TIME BEING. FURTHER RESOLVED THAT THE FUNDS OF THE TRUST SHALL BE SOLELY UTILIZED TOWARDS THE OBJECTS OF THE TRUST AN D NO PORTION OF IT WILL UTILIZED FOR PAYMENT TO THE SETT LER OR TRUSTEES AND/OR THERE RELATIVES FOR THEIR PERSONAL BENEFITS. 2.4. AS PER SECTION 12AA OF THE ACT, ABOUT PROCEDUR E FOR REGISTRATION, THE COMMISSIONER/DIT ON RECEIPT OF AP PLICATION FOR REGISTRATION OF A TRUST OR A INSTITUTION MADE UNDER CLAUSE (A) OR CLAUSE (AA) OF SUB-SECTION (1) OF SECTION 12A IS EX PECTED TO CALL SUCH DOCUMENT OR INFORMATION FROM THE TRUST/INSTITU TION AS DEEMS NECESSARY IN ORDER TO SATISFY HIMSELF ABOUT T HE GENUINENESS OF THE ACTIVITIES OF THE TRUST OR INSTI TUTION AND MAY ALSO MAKE SUCH ENQUIRIES AS DEEM NECESSARY IN THIS BEHALF AND AFTER SATISFYING HIMSELF ABOUT THE OBJECTS OF THE T RUST OR INSTITUTION AND GENUINENESS OF ITS ACTIVITIES SHALL PASS NECESSARY ORDER EITHER GRANTING REGISTRATION OR REJECTING THE APPLICATION. THE IMPUGNED ORDER WAS PASSED ON 27/05/2013, WHEREA S THE DISSOLUTION CLAUSE WAS ENSHRINED ON 24/11/2014 THRO UGH A MEETING OF THE BOARD OF TRUSTEES HELD ON 03/11/2014 , THEREFORE, THE OBJECTION RAISED IN THE ORDER HAS BEEN COMPLIED WITH. IF THE ABOVE RECTIFICATION AND THE OBJECTS ARE ANALYZED, W E ARE SATISFIED THAT NOW, IT IS A FIT CASE WHERE REGISTRATION CAN B E GRANTED U/S 7 12A OF THE ACT, THEREFORE, WE DIRECT THE LD. DIT(EX EMPTION) TO GRANT REGISTRATION TO THE ASSESSEE. HOWEVER, IT IS MADE CLEAR, IF AT ANY STAGE, IT IS FOUND BY THE DEPARTMENT THAT THE A SSESSEE IS DOING ANY COMMERCIAL ACTIVITY CONTRARY TO OR IN PUR SUANCE OF THE OBJECTS OF THE ASSESSEE TRUST THEN THE DEPARTMENT I S FREE TO ISSUE NOTICE TO THE ASSESSEE AND THEN PROCEED IN ACCORDAN CE WITH LAW. FINALLY, THE APPEAL OF THE ASSESSEE IS DISPOSED OF IN TERMS INDICATED HEREINABOVE. THIS ORDER WAS PRONOUNCED, IN THE OPEN COURT, IN TH E PRESENCE OF LD. REPRESENTATIVE FROM BOTH SIDES AT T HE CONCLUSION OF THE HEARING, ON 26 TH NOVEMBER, 2014. SD/- SD/- (SANJAY ARORA) ( JOGINDER SINGH) ACCOUNTANT MEMBER J UDICIAL MEMBER # & MUMBAI; .$ DATED.- 27/11/2014 F{X~{T? P.S/. $ . . !' #'$ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. # /' ( ) / THE CIT(A)- CONCERNED, MUMBAI 4. # /' / CIT CONCERNED, MUMBAI 5. 0%1 '$2 , ( 2 + , # & / DR, ITAT, MUMBAI E BENCH 6. 34 5& / GUARD FILE. % / BY ORDER, 0' ' //TRUE COPY// & / %' ( (DY./ASSTT. REGISTRAR) , # & / ITAT, MUMBAI.