Shri Agarwal Panchayat, JODHPUR V. ITO, PALI

ITA 523/JODH/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99637 (ITAT-JODHPUR)
• Duration Of Justice: 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 17-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution
• Section: 12; 11; 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI G.C. GUPTA, H O NBLE VICE PRESIDENT SHRI R.C. SHARMA , HONBLE ACCOUNTANT MEMBER ITA NO. 52 3 / JODH / 20 1 4 SHRI AGARWAL PANCHAYAT VS. THE I.T .O SHREE AGRESEN BHAWA N WARD - 3 VENKETESH MARG, PALI MARWAR PALI PALI PAN NO : AAFTS 9379 B (APPELLANT) (RESPONDENT) A SSESSEE B Y : SHRI N.R. MERTIA DEPARTMENT B Y : SHRI M.S. MEENA DATE OF H EARING : 31 . 0 8 .201 5 DATE OF PRONOUNCEMENT : 04 . 0 9 . 201 5 OR DER PER R.C. SHARMA, AM: - TH IS APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT - 1, JODH PUR DATED 09 .0 9 .201 4 IN THE MATTER OF ORDER PASSED U/S 12AA(1)(B) OF THE INCOME - TAX ACT, 1961 [HEREINAFTER REFERRED TO AS THE ACT, FOR SHORT]. 2 2 . RIVAL CON TENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. 4. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS A CHARITABLE INSTITUTION REGISTERED UNDER SOCIETIES REGISTRATION ACT, 1958. THE MAIN OBJECT OF THE TRUST WAS TO PROVIDE BUILDING FOR USE IN SOCIAL FUN CTIONS FOR WELFARE OF PUBLIC IN GENERAL AND ESPECIALLY WEAKER SECTION OF SOCIETY IN PARTICULAR, MAINTENANCE OF TEMPLES USED BY PUBLIC IN GENERAL FOR WORSHIP, ORGANIZING FESTIVALS FOR INCREASING HARMONY AND PROSPERITY BETWEEN SOCIETIES. HOWEVER, THE DIT DE CLINED REGISTRATION U/S 12AA OF THE ACT ON THE GROUND THAT THE TRUST DEED DID NOT PROVIDE ANY CLAUSE FOR TRANSFER OF PROPERTY AT THE T IME OF DISSOLUTION OF SOCIETY/ TRUST OR SOCIETIES REGISTERED U/S 12A(A) OF THE ACT. 5. THE LD. A.R. SHRI N.R. MERTIA PLAC ED ON RECORD THE DECISION OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF RAMPURJI GAUSHALA SEWA TRUST REPORTED AT [2014] 45 TAXMANN 383 [GUJ] WHEREIN IT WAS HELD THAT THERE NEED NOT BE ANY DISSOLUTION CLAUSE IN TRUST DEED FOR PURPOSE OF EXEMPTION CERTIF ICATE U/S 80G(5) OF THE ACT. THE LD. A.R. FURTHER PLACED ON RECORD TO 3 FORTIFY HIS PLEA, A COPY OF THE DECISION OF THE HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. PARAMHANS ASHRAM VIDE ORDER DATED 17.02.2009 WHEREIN IT WAS HELD THAT THE TRIBUNAL WA S RIGHT IN CONCLUDING THAT THE ASSESSEE WAS A PUBLIC CHARITABLE AND RELIGIOUS TRUST AND ITS INCOME WAS ENTITLED TO EXEMPTION U/S 11 OF THE ACT. 6. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PARTIES AND THE MATERIAL ON RECORD , WE FOUND NO MERIT IN THE ORDER OF THE DIT DECLINING REGISTRATION U/S 12AA O F THE ACT ON THE GROUND THAT THERE IS NO DISSOLUTION CLAUSE IN THE TRUST DEED IN SO FAR AS ALL THE OBJECTS OF THE ASSESSEE WERE CHARITABLE IN NATURE WHICH HAVE NOT BEEN DISPUTED BY THE DIT. THE DECISIONS CITED BY THE LD. A.R. SUPPORT THE CASE OF THE ASSESSEE - TRUST. THE ITAT, MUMBAI E BENCH, IN THE CASE OF SNEHA AND SANNA FOUNDATION VS DIT(E) HAD DEALT WITH SIMILAR ISSUE AND HELD AS UNDER: 3. WE HAVE CONSIDERED RIVAL CONTENTIONS AND FOUND THAT ISSUE IS SQUARELY COVERED BY THE VARIOUS DECISION OF COORDINATE BENCH WHICH ARE AS UNDER I) ITA NO.71/AHD/2013(SITARAM KUTIR CHARITABLE TRUST); II) ITA NO.1247/MUM/2013(TARA EDUCATIONAL & CHARITABLE TRUST); 4 III) ITA NO.4537/DEL/2009(SUKRAM CHARITABLE TRUST); IV) ITA NO.4509/MUM /2013(RAMA RASHMI CHHAGANLAL WAGHWALA CHARITABLE TRUST); V) ITA NO.382/RJT)2013(SHRI KALA VARDHAN EDUCATION TRUST); VI) ITA NO.3566/MUM/2013 (GEETA LALWANI FOUNDATION). IN THE CASE OF TARA EDU CATION & CHARITABLE TRUST , ITA NO.1247/MUM/2013, ORDER DATED 14 - 7 - 2014 , THE TRIBUNAL HELD AS UNDER 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD, IT IS OBSERVED THAT THE APPLICATION FILED BY THE ASSESSEE U/S 12A OF THE ACT HAS BEEN REJECTED BY THE ID. DIT (EXEMP TIONS) MAINLY ON THE GROUND THAT THE RELEVANT TRUST DEED DOES NOT CONTAIN THE SO - CALLED 'DISSOLUTION CLAUSE'. AS PER THE PROVISIONS OF SECTION 11 & 12 OF THE ACT, INCOME DERIVED FROM PROPERTY HELD FOR CHARITABLE OR RELIGIOUS PURPOSES AND INCOME OF TRUSTS O R INSTITUTIONS FROM CONTRIBUTIONS ARE EXEMPT FROM TAX PROVIDED SUCH TRUSTS OR INSTITUTIONS ARE REGISTERED U/S 12A OF THE ACT. THE PROCEDURE FOR REGISTRATION U/S 12A IS PRESCRIBED IN SECTION 12AAOF THE ACT WHICH PROVIDES THAT THE COMMISSIONER, ON THE RECEIP T OF AN APPLICATION FOR REGISTRATION OF A TRUST OR INSTITUTION MADE U/S 12A, SHALL CALL FOR SUCH INFORMATION FROM THE TRUST/INSTITUTION AS HE THINKS NECESSARY IN ORDER TO SATISFY HIMSELF ABOUT THE GENUINENESS OF ACTIVITIES OF THE TRUST/INSTITUTION AND MAY ALSO MAKE SUCH INQUIRIES AS DEEMED NECESSARY ON THIS BEHALF. IT FURTHER PROVIDES THAT AFTER SATISFYING HIMSELF ABOUT THE OBJECTS OF THE TRUST/INSTITUTION AND THE GENUINENESS OF ITS ACTIVITIES, THE COMMISSIONER SHALL PASS AN ORDER IN WRITING REGISTERING THE TRUST/INSTITUTION U/S 5 12A AND IF HE IS NOT SO SATISFIED, HE SHALL PASS AN ORDER IN WRITING REFUSING TO REGISTER THE TRUST/INSTITUTION. THE SCOPE OF ENQUIRY CONTEMPLATED U/S 12AA OF THE ACT THUS IS LIMITED TO THE EXTENT OF COMMISSIONER GETTING HIMSELF SATI SFIED ABOUT OBJECT OF THE TRUST AND THE GENUINENESS OF ITS ACTIVITIES SO AS TO GRANT OR REFUSE THE REGISTRATION U/S 12A OF THE ACT. A PERUSAL OF THE IMPUGNED ORDER OF THE DIT(E) HOWEVER SHOWS THAT HE HAS NOT RECORDED ANY ADVERSE COMMENT OR DISSATISFACTION ABOUT THE OBJECT OF THE TRUST OR GENUINENESS OF THE TRUST ACTIVITIES . HE REFUSED TO GRANT THE REGISTRATION U/S 12A OF THE ACT ON THE GROUND THAT ITS TRUST DEED DOES NOT CONTAIN 'DISSOLUTION CLAUSE'. IN OUR OPINION, THE ID. DIT (EXEMPTIONS) THUS HAS CLEARL Y GONE BEYOND THE SCOPE OF ENQUIRY CONTEMPLATED U/S 12A OF THE ACT AND HAS REFUSED TO GRANT THE REGISTRATION U/S 12A OF THE ACT TO THE ASSESSEE TRUST ON A TOTALLY IRRELEVANT GROUND WITHOUT POINTING OUT AS TO HOW HE WAS NOT SATISFIED EITHER ABOUT THE OBJECT OF THE TRUST OR THE GENUINENESS OF ITS ACTIVITIES. WE THEREFORE SET ASIDE THE IMPUGNED ORDER OF THE ID. DIT (EXEMPTIONS) AND DIRECT THAT THE REGISTRATION U/S 12A OF THE ACT AS APPLIED BY THE ASSESSEE TRUST BE GRANTED. 4. RESPECTFULLY FOLLOWING THE DECI SION OF THE COORDINATE BENCH, WE DO NOT FIND ANY MERIT IN THE ORDER PASSED BY THE DIT(E), INSOFAR AS MERE ABSENCE OF DISSOLUTION CLAUSE IN THE TRUST DEED, CANNOT BE MADE THE GROUND FOR REFUSAL OF THE REGISTRATION U / S .12A WHEN THE OBJECT OF THE TRUST WAS CH ARITABLE IN NATURE, GENUINENESS OF WHICH WAS NOT DOUBTED BY THE DIT(E). 6 ACCORDINGLY , RESPECTFULLY FOLLOWING ABOVE DECISION AS WELL AS THE DECISIONS OF THE HON'BLE HIGH COURTS, WE DIRECT THE DIT TO GRANT REGISTRATION TO THE ASSESSEE TRUST U/S 12AA OF THE A CT IN SO FAR AS THE OBJECTS OF THE TRUST ARE CHARITABLE IN NATURE AND GENUINE . OTHER OBJECTION OF THE DIT IS RELEVANT WHILE ASSESSING THE INCOME OF THE TRUST AND NOT AT THE TIME OF GRANT OF REGISTRATION U/S 12AA OF THE ACT. 7 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRON OUNCED IN THE COURT ON 04 - 0 9 - 201 5 . S D / - S D / - (G.C. GUPTA) ( R.C. SHARMA ) VICE PRESIDENT ACCOUNTANT MEMBER DATED : 04 TH SEPTEMBER , 2015 . VL/ - COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) BY ORDER 5. THE DR ASSISTANT REGISTRAR ITAT, JODHPUR