Shri Dhar Sabha, Katra. V. The Commissioner of Income Tax (Exemption), Chandigarh

ITA 53/ASR/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6330 (ITAT-AMRITSAR)
• Duration Of Justice: 2 year(s) 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: TM
• Assessment Year: 2016-2017
• Appeal Filed On: 24-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Charitable institution; Difference of opinion; Set aside
• Section: 12; 11; 12A; 12AA; 195; 192; 13; 255(4)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENC H, AMRITSAR BEFORE: SHRI. N.K.SAINI, VICE PRESIDENT (THIRD MEMBER) ITA NO.53/ASR/2017 ASSESSMENT YEAR : SHRI DHAR SABHA VAISHNO DEVI, KATRA VS CIT(EXEMPTIONS) CHANDIGARH PAN NO: AAGAS7658K APPELLANT RESPONDENT ASSESSEE BY : SHRI P.N. ARORA, ADVOCATE REVENUE BY : SHRI CHARAN DASS, SR. DR DATE OF HEARING : 14/10/2019 DATE OF PRONOUNCEMENT : 08/01/2020 / // / ORDER PER N.K. SAINI, VICE PRESIDENT ON ACCOUNT OF DIFFERENCE OF OPINION BETWEEN THE LD. ACCOUNTANT MEMBER AND LD. JUDICIAL MEMBER OF THE ITAT, AMRITSA R BENCH, THIS MATTER HAS BEEN REFERRED TO ME BY THE HON'BLE PRESIDENT ITAT F OR CONSIDERATION AND DISPOSAL UNDER SECTION 255(4) OF THE INCOME TAX ACT, 1961 (H EREINAFTER REFERRED TO AS ACT). IT MAY BE NOTED THAT EVEN WHILE FRAMING THE POINT OF DIFFERENCE THERE WAS A DIFFERENCE OF OPINION AND DIFFERENT QUESTIONS HAVE BEEN FRAMED BY BOTH THE LD. MEMBERS. THE LD. JUDICIAL MEMBER FORMULATED THE FOLLOWING QUESTIONS: (I) WHETHER THE LD A.M. IS JUSTIFIED IN GRANTED REG ISTRATION, WHILE SIDELINING THE OBSERVATION OF THE LD. CIT(E), (WHICH IS NOT DENIED BY THE APPELLANT SOCIETY) TO THE EFFECT THAT THE DETAILS FURNISHED REVEAL THAT T HE BANK ACCOUNTS ARE IN THE NAME OF SECRETARY OF THE SABHA AND NOT THE SOCIETY PER SE, WHICH IS CLEAR INDICATOR OF THE SOCIETY'S CLAIMED FINANCES NOT BEI NG IN ITS CONTROL AND SUSCEPTIBLE TO MISUSE. WHEREAS IN VIEW OF THE HON'BLE J.M., THE SAME IS NOT IN-CONSONANCE WITH LAW AND SPRIT OF THE OBJECTS OF THE SOCIETY AN D CREATES THE DOUBT QUA GENUINENESS OF ITS ACTIVITIES. (II) WHETHER THE ID. A.M. IS JUSTIFIED IN HOLDING T HAT FROM THE COPY OF BANK ACCOUNT OF ORIENTAL BANK OF COMMERCE, CLEARLY INDICATES THA T THE BANK ACCOUNT WAS IN THE NAME OF ASSESSEE SOCIETY, THEREFORE THE OBJECTI ON OF THE HON'BLE J.M. 2 REGARDING BANK ACCOUNT IN THE NAME OF SECRETARY IS NOT BASED UPON THE FACTS OF THE CASE. WHEREAS IT IS ADMITTED FACT THAT THE APPE LLANT SOCIETY HAS 03 BANK ACCOUNTS, HOWEVER THE HON'BLE A.M., SIDELINED THE O THER 02 BANK ACCOUNTS. (III) WHETHER IT IS NOT MANDATORY FOR THE APPELLANT SOCIETY TO GET REGISTERED, ANY CHANGE IN COMPOSITION OF THE SOCIETY, BY THE REGIST RAR OF THE SOCIETIES. WHEREAS IT IS ADMITTED FACT THAT ALTHOUGH IT WAS CLAIMED BY TH E APPELLANT THAT THE COMPOSITION OF THE SOCIETY HAS BEEN CHANGED BY RESO LUTION DATED 06-02-2011 AND SAME SENT TO THE REGISTRAR OF SOCIETY FOR REGIS TRATION, HOWEVER THE SAME WAS NEVER PRODUCED BY THE APPELLANT SOCIETY NEITHER BEF ORE THE LD. CIT (E) TILL PASSING OF THE IMPUGNED ORDER DATED 08-12-2016 NOR BEFORE T HIS APPELLATE FORUM TILL HEARING OF THE CASE AS ON 06-11-2017. (IV)WHETHER THE LD. A.M. IS JUSTIFIED IN HOLDING TH AT THERE IS NO REQUIREMENT IN LAW FOR FILLING THE INCORPORATION OF DISSOLUTION CLAUSE , BEFORE THE REGISTRAR OF SOCIETIES FOR ITS REGISTRATION. (V) WHETHER THE RESTRICTION IMPOSED IN THE CONSTRIC TION OF THE APPELLANT SOCIETY THAT NO OTHER MEMBER OF THE SABHA WILL HAVE ANY RIG HT TO RAISE ANY OBJECTION, WHICH SEVERALLY IMPINGES ON THE RIGHTS AND SAY OF O THER MEMBERS OF THE SABHA, WHICH NOT ONLY AMOUNTS TO RESTRICTION IN THE FAIR P LAY OF THE SOCIETY BUT ALSO AMOUNTS TO IN-GENUINENESS OF ITS ACTIVITIES. 2. ON THE OTHER HAND THE LD. ACCOUNTANT MEMBER FORM ULATED THE FOLLOWING QUESTIONS WHILE REFERRING THE MATTER TO THE HON'BLE PRESIDENT. 'WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE , LEARNED JUDICIAL MEMBER WAS JUSTIFIED IN DISMISSING THE APPEAL OF THE ASSES SEE AGAINST REFUSAL FOR REGISTRATION U/S 12A OF THE ACT SPECIFICALLY IN VIEW OF THE FACT THAT HE HIMSELF HAS HELD THAT OBJECTS OF THE ASSESSEE ARE IN PARLANCE WITH THE MA NDATE OF DEFINITION U/S 2(15) OF THE ACT. 3. FROM THE AFORESAID QUESTIONS REFERRED BY BOTH TH E LD. MEMBERS IT IS CLEAR THAT CONTROVERSY TO RESOLVE, RELATES TO THE REGISTR ATION UNDER SECTION 12A OF THE ACT DENIED BY THE LD. CIT(E), CHANDIGARH. 4. FACTS RELATED TO THIS ISSUE HAS BEEN DISCUSSED B Y BOTH THE LD. MEMBERS IN THEIR RESPECTIVE ORDERS, HOWEVER FOR THE CLARITY IT IS NECESSARY TO DISCUSS THE FACTS IN BRIEF AS MENTIONED BY THE LD. CIT(E) IN HIS ORDE R DT. 28/12/2016. 3 5. FACTS IN BRIEF ARE THAT THE ASSESSEE FILED AN AP PLICATION IN FORM NO. 10A SEEKING REGISTRATION UNDER SECTION 12A OF THE ACT W HICH REVEALED THAT THE ASSESSEE SOCIETY WAS AN ONGOING ENTITY AND HAD BEEN IN OPERATION SINCE 20/10/1970. THE AIMS AND OBJECTS OF THE SOCIETY ARE INTER ALIA TO DEVELOP THE PLACE OF DEVI JI TO REMOVE CURSE PRESENT AT THE ABO DE OF GOD; RENOVATION OF HOUSES FOR THE BENEFIT OF TRAVELERS AND TO MAKE EFF ORTS TO AVOID THE SUFFERING OF TRAVELERS TO MAKE PLACE OF SHREE DHAR BABA JI MEMOR ABLE TO ESTABLISH THE STATUTE OF SHREE DHAR BABA JI AT DEVI JI TO MAKE AN OFFICE OF SHREE DHAR SABHA AT KATRA AND TO ESTABLISH FREE HOSPITAL AND DHARAMS HALA AT KATRA. 6. THE LD. CIT(E) ISSUED A SHOW CAUSE LETTER DT. 15 /11/2016 AND ASKED THE ASSESSEE TO PROVIDE THE FOLLOWING DOCUMENTS / CLARI FICATIONS : (I) DETAILS OF PROPERTY VESTED IN THE SOCIETY, AS E NVISAGED U/S 11 OF THE L.T. ACT, INCOME FROM WHICH IS SOUGHT TO HE EXEMPTED. (II) DETAILS OF VOLUNTARY CONTRIBUTIONS RECEIVED BY THE SOCIETY, AS ENVISAGED U/S 12 OF THE L.T. ACT AND WHETHER ANY SPECIFIC DIRECTI ONS HAVE BEEN RECEIVED BY THE PERSONS MAKING VOLUNTARY CONTRIBUTIONS. (III) ORIGINALS OF MOA/BYE-LAWS OF THE SOCIETY A LONG WITH THE REGISTRATION CERTIFICATE. (IV) COPIES OF BANK STATEMENTS THROUGH WHICH ACTIVI TIES ARE BEING PROPAGATED HIGHLIGHTING THE RECEIPTS AND THE DIFFERENT ITEMS O F EXPENDITURE THAT ARE BEING CLAIMED. (V) DETAILS OF GRANTS RECEIVED FROM THE GOVERNMENT AND WHETHER THE SAME ARE BEING UTILIZED AS PER GOVERNMENT GUIDELINES. (VI) COMPLETE DETAILS OF DONATIONS RECEIVED OR INTE NDED LO BE RECEIVED AND DOCUMENTARY EVIDENCE AS REGARDS TO GRANTS RECEIVED. (VII) COPIES OF THE L.T RETURNS FILED (IF ANY) ALON G WITH A NOTE REGARDING ANY KIND OF EXEMPTIONS UNDER I.T. ACT HAVING CLAIMED EARLIER. (VIII) WHETHER THE APPLICATIONS FOR REGISTRATION HA S BEEN FILED FOR THE FIRST TIME. THE FATE OF THE EARLIER APPLICATION ALONG WITH COPY OF THE ORDER. (IX) DONATION RECEIVED UNDER FCRA ALONG WITH RELEVA NT DETAILS SUCH AS COPY OF THE RETURN FOR FCRA AND THE COPY OF SPECIFIED BANK ACCOUNT (IF ANY). (X) THE DETAILS OF CORPUS FUND AND WHETHER THE SAME ARE WITH ANY WRITTEN SPECIFIC DIRECTIONS. 4 (XI) DETAILS REGARDING CHARITABLE ACTIVITIES BEING CONDUCTED BY THE SOCIETY CLARIFYING AS TO WHICH SPECIFIC LIMB UNDER SECTION U/S 2(15) OF THE L.T.ACT IS BEING PURSUED. (XII) FINANCIAL STATEMENTS OF THE SOCIETY SINCE INC EPTION OR FOR LAST THREE YEARS WHICHEVER IS LATER. 6.1 THE LD. CIT(E) ALSO ASKED THE ASSESSEE TO PROVI DE THE RATIONALE AS TO WHY REGISTRATION SHOULD BE GRANTED IN THE ABSENCE OF AN Y APPARENT CHARITABLE ACTIVITY BEING PURSUED. HE ALSO ASKED TO PROVIDE CO PY OF INCOME TAX RETURN FOR THE A.Y. 2015-16 AND COPY OF BANK STATEMENT FOR THE SAID YEAR THROUGH WHICH ACTIVITIES WERE BEING PROPAGATED. 6.2 THE LD. CIT(E) AGAIN ON THE BASIS OF DOCUMENTS AVAILABLE ON RECORD ISSUED A FINAL SHOW CAUSE AND RAISED THE FOLLOWING QUERIES : (I) PROOF OF OWNERSHIP OF LAND, VESTING WITH THE SO CIETY, ON WHICH BUILDING HAS BEEN CONSTRUCTED. (II) COPIES OF ALL THE THREE BANK ACCOUNTS FOR F. Y. 2015-16 AND TILL DATE AS THE STATEMENT OF AFFAIRS SHOW BALANCE IN THREE BANK ACC OUNTS.. (III) EVIDENCE OF EXPENSES ON ESTABLISHMENT, POWERS /FUEL AND REPAIR & MAINTENANCE FOR THE F.Y. ENDING 31.03.2016. (IV) EVIDENCE FOR THE PAYMENT OF TAXES U/S 115B BC OF THE ACT ON ANONYMOUS DONATIONS. (V) IN RESPONSE TO SHOW CAUSE ABOUT INCORPORATION O F NEW TRUSTEE/ MANAGER OF THE SOCIETY, VIDE RESPONSE DATED 08.12.2016, COP Y OF A RESOLUTION DATED 06.02.2011 HAS BEEN FURNISHED. IT HAS BEEN CLAIMED THAT THE SAME WAS SENT TO REGISTRAR OF SOCIETIES. IT IS PRESUMED THAT SINCE A SUBSTANTIAL LIME HAS ELAPSED AFTER 2011, THE CHANGE IN COMPOSITION MUST HAVE BEE N ACCEPTED AND INCORPORATED AS SUCH BY THE REGISTRAR OF SOCIETIES. EVIDENCE OF THE SAME MAY BE PROVIDED. 6.3 IN RESPONSE TO THE ABOVE, THE ASSESSEE FURNISHE D THE PROOF OF OWNERSHIP, COPY OF BANK ACCOUNT ETC VIDE LETTER DT. 19/12/2016 . 6.4 THE LD. CIT(E) AFTER CONSIDERING THE DETAILS FU RNISHED BY THE ASSESSEE SOCIETY OBSERVED THAT THE BANK ACCOUNTS WERE IN THE NAME OF SECRETARY AND NOT 5 THE SOCIETY PER SE WHICH WAS INDICATOR OF THE SOCIE TY CLAIMED FINANCES NOT BEING IN ITS CONTROL AND SUSCEPTIBLE TO MISUSE. 6.5 THE CLAIM OF THE ASSESSEE WAS THAT A SIZEABLE C OMPONENT OF THE RECEIPTS WAS IN THE SHAPE OF THE ANONYMOUS DONATIONS, THE LD . CIT(E), THEREFORE ASKED THE ASSESSEE AS TO WHETHER TAXES WERE PAID ON THE S AME UNDER SECTION 115BBC OF THE ACT. IN RESPONSE THE ASSESSEE CLAIMED TO BE A RELIGIOUS TRUST / SOCIETY. HOWEVER THE LD. CIT(E) CONSIDERED THE SAID CLAIM TO BE AN AFTERTHOUGHT BY OBSERVING THAT NOWHERE IN THE APPLICATION NOR DURIN G THE COURSE OF PROCEEDINGS, THE ISSUE OF ASSESSE BEING A RELIGIOUS SOCIETY HAD BEEN FLAGGED AND THAT THE ASSESSEE SOCIETY HAD NOT BEEN PAYING TAXES IN THE P AST ON THE LARGE AMOUNTS OF ANONYMOUS DONATIONS. 6.6 THE LD. CIT(E) OBSERVED THAT FINANCIAL STATEMEN TS OF THE ASSESSEE SOCIETY REVEALED THAT THE RECEIPTS WERE MAINLY BEING USED F OR MAKING THE FDRS OR KEPT AS BANK BALANCES AND THAT THE CLAIM OF THE ASSESSEE HAVING ITS OBJECT OF RUNNING A FREE HOSPITAL HAD NOT BEEN PURSUED. THE LD. CIT(E ) GAVE THE DETAILS RECEIPTS AND BANK BALANCES ETC. AS UNDER: F.Y. GROSS RECEIPT NET SURPLUS FDRS BANK BALANCE 2013-14 50,15,145/- 4,93,524/- 16,19,304/- 44,25,69 8/- 2014-15 58,01,024/- 15,53,898/- 17,56,050/- 59,15,8 44/- 2015-16 53,21,433/- 10,51,522/- 19,04,284/- 70,75,6 64/- 6.7 THE LD. CIT(E) ALSO OBSERVED THAT THE ASSESSEE HAD INCURRED TOTAL EXPENDITURE AMOUNTING TO RS. 36,95,971/- IN THE FOR M OF ESTABLISHMENT EXPENDITURE, POWER/FUEL EXPENDITURE, REPAIR & MAINT ENANCE, DEPRECIATION, WATER TAX AND VEHICLE MAINTENANCE WHICH WAS 69.45% OF THE GROSS RECEIPT FOR THE F.Y. 2015-16 WHICH SHOWS THAT THE EXPENDITURE D ID NOT GET COVERED UNDER THE ACTIVITIES CHARITABLE PURPOSE AS CLAIMED BY T HE ASSESSEE. HE ALSO OBSERVED 6 THAT IT HAD BEEN PROJECTED THAT THE CHANGE IN COMPO SITION ETC HAD BEEN EFFECTUATED IN 2011 BUT NO EVIDENCE HAD BEEN FILED REGARDING ACCEPTANCE OF THE CHANGE IN COMPOSITION OF THE SOCIETY BY REGISTR AR OF SOCIETY. THE EXPLANATION OF THE ASSESSEE IN THAT REGARD WAS THAT THE OFFICE OF SUB REGISTRAR MOVED TO SRI NAGAR, SO IT WAS NOT POSSIBLE TO GET T HE RECORD. 6.8 LD. CIT(E) OBSERVED THAT THE REGULATION OF THE ASSESSEE SOCIETY DID NOT INCLUDE THE DISSOLUTION CLAUSE IN THE ABSENCE OF WH ICH THERE IS ALWAYS A SCOPE OF VIOLATION OF SECTION 13(1) OF THE ACT. HE ALSO OBSE RVED THAT THE REGULATIONS OF THE SOCIETY AT PAGE NO. 3 MENTIONED THAT THE HEAD OF TH E SOCIETY IS RESTRICTED TO BE FROM SHRI DHAR VANSH AND NO OTHER MEMBER OF THE SABHA WILL HAVE ANY RIGHT TO RAISE ANY OBJECTION WHICH MAKES THE CLAUSE OF SE LECTING THE HEAD RESTRICTIVE IN NATURE AND WAS SEEMINGLY AN ARRANGEMENTS THAT RE TAIN CONTROL OF THE SABHA WITHIN CLOSED GROUP. THEREFORE HE WAS OF THE VIEW T HAT THE ASSESSEE SOCIETY DID NOT ENSURE TO THE BENEFIT OF GENERAL PUBLIC. HE ALS O MENTIONED THAT NO EVIDENCE OF ANY EFFORT BEING MADE TOWARDS THE OPENING OF THE FREE DISPENSARY, HAD BEEN ADDUCED BY THE ASSESSEE AND THAT NOTHING WAS ON REC ORD WHICH COULD CORROBORATE THE EXPENDITURE WERE INCURRED FOR EXTEN DING FREE MEDICAL FACILITIES. THE LD. CIT(E) DENIED THE REGISTRATION TO THE ASSES SEE UNDER SECTION 12AA OF THE ACT. 7. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE ITAT WHEREIN DIVERSANT VIEW HAD BEEN TAKEN BY BOTH THE LD. MEMBE RS. 8. THE LD. JUDICIAL MEMBER CONFIRMED THE ACTION OF THE LD. CIT(E) IN REFUSING THE REGISTRATION UNDER SECTION 12AA OF THE ACT TO T HE ASSESSEE BY OBSERVING THAT THE ACCOUNT IN THE NAME OF THE SECRETARY WAS NOT IN CONSONANCE WITH LAW AND SPRIT OF OBJECTS OF THE SOCIETY AND CREATED THE DOU BT IN THE GENUINENESS OF ITS ACTIVITIES AND THAT ANY OTHER MEMBER OF SABHA HAVIN G NO RIGHT TO RAISE ANY OBJECTION AMOUNTS TO RESTRICTION IN THE FAIR PLAY O F SOCIETY. HE ALSO OBSERVED THAT 7 THE REASONS GIVEN BY THE LD. CIT(E) CREATED DOUBT A BOUT THE GENUINENESS OF THE ACTIVITY AND THAT THE ASSESSEE SOCIETY FAILED TO PR ODUCE CHANGE IN COMPOSITION AS WELL AS THE DISSOLUTION CLAUSE. ACCORDINGLY, THE VIEW TAKEN BY THE LD. CIT(E) WAS CONFIRMED. 9. ON THE CONTRARY THE LD. ACCOUNTANT MEMBER IN HIS DISSENTING ORDER DIRECTED THE LD. CIT(A) TO GRANT THE REGISTRATION U NDER SECTION 12AA OF THE ACT BY OBSERVING THAT ALTHOUGH THE LD. JUDICIAL MEMBER HELD THAT OBJECTION OF THE ASSESSEE WERE IN PARLANCE WITH THE AMENDED DEFINITI ON OF CHARITABLE OBJECTS AS CONTAINED IN SECTION 2(15) OF THE ACT BUT HE HAD UP HELD THE ORDER OF THE LD. CIT(E). HE OBSERVED THAT THE ASSESSEE HAD DECLARED THREE BANK ACCOUNTS IN ITS BALANCE SHEET AS ON 31/03/2016 WHICH WERE DULY AUDI TED BY THE CHARTERED ACCOUNTANT AND IT WAS NOT POSSIBLE THAT AUDITOR WOU LD HAVE IGNORED THIS ASPECT. THEREFORE, IT CANNOT BE SAID THAT THE BANK ACCOUNTS WERE IN THE NAME OF SECRETARY. HE ALSO MENTIONED THAT THE COPY OF BANK ACCOUNT OF ORIENTAL BANK OF COMMERCE PLACED AT PAGE NO. 15 OF THE PAPER BOOK IN DICATED THAT THE BANK ACCOUNT WAS IN THE NAME OF THE ASSESSEE SOCIETY. HE ACCORDINGLY HELD THAT THESE OBSERVATIONS / OBJECTIONS REGARDING THE BANK ACCOUNT IN THE NAME OF SECRETARY WERE NOT BASED UPON THE FACTS OF THIS CAS E. 10. AS REGARDS TO THE OBJECTIONS OF THE LD. CIT(E) THAT THE ASSESSEE HAD NOT FILED EVIDENCE FOR CHANGE IN COMPOSITION AND INCLUS ION OF DISSOLUTION CLAUSE BEFORE REGISTRAR OF SOCIETY. THE LD. ACCOUNTANT MEM BER OBSERVED THAT THE ASSESSEE VIDE RESOLUTION PASSED ON 16/09/2016 INCOR PORATED THE DISSOLUTION CLAUSE WHEREBY IT HAD BEEN RESOLVED THAT IN THE CAS E OF DISSOLUTION OF THE SOCIETY, THE ASSETS OF THE ASSESSEE SOCIETY WOULD B E TRANSFERRED TO SOCIETY ENGAGED IN SIMILAR SERVICES, THE REFERENCE WAS MADE TO PAGE NO. 95 OF THE PAPER BOOK WHICH IS THE COPY OF THE AFORESAID RESOL UTION. 8 11. THE LD. ACCOUNTANT MEMBER WAS OF THE VIEW THAT THERE WAS NO REQUIREMENT FOR FILING THE AFORESAID RESOLUTION WIT H THE REGISTRAR OF SOCIETY FOR GETTING REGISTRATION UNDER SECTION 12AA OF THE ACT. THE RELIANCE WAS PLACED ON THE JUDGMENT OF THE HON'BLE PUNJAB & HARYANA HIGH C OURT IN THE CASE OF CIT(E) VS. SHRI MAHAVIR JAIN SOCIETY, WHEREIN BY FOLLOWING THE JUDGMENT OF HON'BLE MADRAS HIGH COURT IN THE CASE OF CIT VS. R.M. S TRU ST IT HAD HAD BEEN HELD THAT FOR CONSIDERING THE APPLICATION FOR REGISTRATION UN DER SECTION 12A OF THE ACT ONLY INQUIRY WHICH WOULD POSSIBLY BE MADE WOULD BE WHETH ER THE ASSESSEE TRUST HAD MADE APPLICATION AND WHETHER THE ACCOUNTS WERE MAIN TAINED IN THE MANNER AS SUGGESTED IN THE SAID SECTION AND THAT THE LD. C IT(E) WAS NOT JUSTIFIED IN REJECTING THE APPLICATION FOR REGISTRATION FOR WANT OF AMENDED TRUST DEED SINCE IT WAS NOT A PREREQUISITE CONDITION FOR REGISTERING TH E APPLICANT AS A TRUST. 12. AS REGARDS TO THE THIRD OBJECTION THAT THE HEAD OF THE SOCIETY COULD NOT BE FROM OTHER THAN SHRI DHAR VANSH, THE LD. ACCOUNTANT MEMBER OBSERVED THAT IT WAS NOT A HURDLE. ACCORDING TO HIM, THE LD. CIT(E) WHILE GRANTING THE REGISTRATION WAS REQUIRED TO EXAMINE THE NATURE OF OBJECTS AND G ENUINENESS OF THE ACTIVITIES IN RESPECT OF THE OBJECT AND THAT THE LD. JUDICIAL MEMBER HAD ALREADY HELD THAT ACTIVITY OF THE ASSESSEE WERE CHARITABLE IN NATURE AS PER THE PROVISIONS OF SECTION 2(15) OF THE ACT. ACCORDINGLY THE DIRECTION WAS GIV EN TO THE LD. CIT(E) TO GRANT THE REGISTRATION UNDER SECTION 12AA OF THE ACT. 13. AS THERE WAS DIFFERENCE IN THE VIEWS TAKEN BY B OTH THE LD. MEMBERS THE HON'BLE PRESIDENT NOMINATED ME AS THIRD MEMBER UNDE R SECTION 255(4) OF THE ACT TO RESOLVE THE CONTROVERSY. 14. LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUB MISSIONS MADE BEFORE THE LD. CIT(E) AND FURTHER SUBMITTED THAT THE ACCOUNTS OF THE ASSESSEE WERE DULY AUDITED AND ALL THE THREE BANK ACCOUNTS WERE APPEAR ING IN THE BOOKS OF ACCOUNTS AND REFLECTED IN THE BALANCE SHEET. IT WAS STATED THAT COPY OF BANK 9 ACCOUNT OF THE OBC PLACED AT PAGE NO. 15 OF THE ASS ESSEES PAPER BOOK CLEARLY REVEALED THAT THE BANK ACCOUNT WAS OPENED IN THE NA ME OF THE SOCIETY AND NOT IN THE NAME OF THE SECRETARY, THE SAME WAS THE POSITION OF THE BANK ACCOUNT MAINTAINED WITH UCO BANK, JAMMU COPY OF WHI CH IS PLACED AT PAGE NO. 192 OF THE ASSESSEES PAPER BOOK. 15. AS REGARDS TO THE THIRD BANK ACCOUNT MAINTAINED WITH JAMMU & KASHMIR BANK, COPY OF WHICH IS PLACED AT PAGE NO. 194 TO 19 6 OF THE ASSESSEES PAPER BOOK, IT WAS STATED THAT THE ACCOUNT WAS IN THE NAM E OF THE SOCIETY AND NOT THE SECRETARY. IT WAS STATED THAT ALL THE ACCOUNTS WERE IN THE NAME OF THE ASSESSEE SOCIETY, THEREFORE THE OBJECTION WAS BASELESS. 16. AS REGARDS TO THE OBJECTION RELATING TO THE DIS SOLUTION CLAUSE, IT WAS STATED THAT THE RESOLUTION WAS PASSED FOR INCORPORATING TH E DISSOLUTION CLAUSE (REFERENCE WAS MADE TO PAGE NO. 95 OF THE ASSESSEES PAPER BOO K) WHICH WAS DULY SIGNED BY THE SECRETARY AND PRESIDENT ALONGWITH OTHER MEMB ERS. IT WAS ALSO STATED THAT THERE WAS NO NEED TO BRING THE AFORESAID CHANGE TO THE NOTICE OF REGISTRAR OF SOCIETY. 17. AS REGARDS TO THE OBJECTION THAT NO OTHER MEMBE R OF THE SABHA WILL HAVE RIGHT TO RAISE ANY OBJECTION AMOUNTS TO RESTRICTION IN THE FAIR PLAY OF THE SOCIETY. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE APP OINTMENT OF THE HEAD OF THE OFFICE FROM SHRI DHAR VANSH DID NOT HAVE ANY CONNEC TION WITH THE OBJECTS OF THE ASSESSEE SOCIETY WHICH DEFINITELY REMAINS CHARITABL E. THE RELIANCE WAS PLACED ON THE JUDGMENT OF THE HON'BLE PUNJAB & HARYANA HIG H COURT IN THE CASE OF CIT VS. SHIRDI SAI DARBAR CHARITABLE TRUST (DHARAMSHALA ) COPY OF WHICH IS PLACED AT PAGE NO. 197 TO 202 OF THE ASSESSEES PAPER BOOK. IT WAS SUBMITTED THAT THE OBJECTS OF THE ASSESSEE SOCIETY WERE CHARITABLE IN NATURE. THEREFORE THE LD. CIT(E) WAS REQUIRED TO GRANT THE REGISTRATION UNDER SECTION 12AA OF THE ACT. THE RELIANCE WAS ALSO PLACED ON THE FOLLOWING CASE LAWS : 10 * CIT(E) CHANDIGARH VS. SHRI MAHAVIR JAIN SOCIETY, LUDHIANA IN ITA NO. 231 OF 2016 DT. 11/09/2017(P&H) * CIT VS. R.M.S TRUST REPORTED AT [2010] 326 ITR 31 0 (MAD) * TARA EDUCATIONAL AND CHARITABLE TRUST VS. DIT(E) IN ITA NO. 1247/MUM/2013 DT. 18/07/2014 (MUM TRIB) * CIT VS. PARAMHANS ASHRAM TRUST REPORTED AT [2009] 315 ITR 220 * SMT. GANESH DEVI RAMI DEVI CHARITY TRUST VS. CIT REPORTED AT 71 ITR 696 * 18. IN HIS RIVAL SUBMISSIONS THE LD. DR REITERATED THE OBSERVATIONS MADE BY THE LD. CIT(E) AND THE LD. JUDICIAL MEMBER IN THEIR RES PECTIVE ORDERS AND STRONGLY SUPPORTED THE SAID ORDERS. RELIANCE WAS PLACED ON T HE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. JAGANNATH GUPT A FAMILY TRUST IN CIVIL APPEAL NO. 1381 OF 2019 ORDER DT. 01/02/2019 COPY O F WHICH WAS FURNISHED DURING THE COURSE OF HEARING WHICH IS PLACED ON REC ORD. 19. I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND PERUSED THE ORDERS PASSED BY BOTH THE LD. MEMBERS ALONGWITH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE IT IS NOTICED THAT THE LD. CIT(E) HIMSELF ADMITTED IN HIS ORDER THAT THE AIMS AND OBJECTIVES OF THE ASSESSEE WERE TO DEVELOP THE PLACE OF DEVIJI RENOVATION OF HOUSE FOR THE BENEFIT OF TRAV ELER TO MAKE EFFORTS TO AVOID THE SUFFERING OF TRAVELERS. HE WAS OF THE VIEW THAT THE OBJECTS OF THE ASSESSEE SOCIETY TO ESTABLISH FREE HOSPITAL AND DHARAMSHALA AT KATRA QUALIFIED FOR THE LEVEL OF CHARITABLE PURPOSES. HOWEVER THE REGISTRATION UNDER SECTION 12A OF THE ACT WAS NOT GRANTED TO THE ASSESSEE BY STATING THAT THE BAN K ACCOUNT WERE IN THE NAME OF SECRETARY OF THE SABHA AND NOT THE SOCIETY. ON T HE CONTRARY THE ASSESSEE FURNISHED THE COPY OF BANK ACCOUNTS WHICH REVEAL T HAT THE BANK ACCOUNTS WERE IN THE NAME OF THE ASSESSEE SOCIETY. COPY OF T HE BANK ACCOUNT MAINTAINED WITH OBC, KATRA IS PLACED AT PAGE NO. 15 OF THE ASSESSEES PAPER BOOK WHICH SHOWS THAT THE ACCOUNT NO. 0193201000036 0 WAS IN THE NAME OF THE 11 ASSESSEE. THE ANOTHER BANK ACCOUNT WAS MAINTAINED W ITH UCO BANK, KATRA COPY OF WHICH IS PLACED AT PAGE NO. 192 OF THE ASSE SSEES PAPER BOOK WHICH ALSO MENTIONED THAT THE PRIMARY HOLDER OF THE BANK ACCOUNT WAS SHREE DHAR SABHA. ANOTHER BANK ACCOUNT WAS MAINTAINED WITH J&K BANK COPY OF WHICH IS PLACED AT PAGE NO. 195 OF THE ASSESSEES PAPER BOOK , THE SAID ACCOUNT MAINTAINED WAS IN THE NAME OF SECRETARY SHREE DHAR SABHA SO IT CANNOT BE SAID THAT THE SAID ACCOUNT WAS IN THE NAME OF INDIVIDUAL PERSON RATHER IT WAS IN THE NAME OF THE OFFICE BEARER OF THE ASSESSEE SOCIETY. THEREFORE, THE OBJECTION OF THE LD. CIT(E) WHILE REJECTING THE APPLICATION MOVE D BY THE ASSESSEE ON THIS BASIS THAT BANK ACCOUNTS WERE IN THE NAME OF SECRETARY AN D NOT IN THE NAME OF SOCIETY, WAS AGAINST THE FACTS ON RECORD. 20. IN THE PRESENT CASE, THE ANOTHER OBJECTION OF T HE LD. CIT(E) WAS THAT THE DISSOLUTION CLAUSE WAS NOT THERE AND NO EVIDENCE HA D BEEN FILED REGARDING THE ACCEPTANCE OF CHANGE IN COMPOSITION OF THE SOCIETY BY THE REGISTRAR OF THE SOCIETY. IN THIS REGARD THE ASSESSEE HAD FURNISHED THE COPY OF THE RESOLUTION IN CORROBORATING THE DISSOLUTION CLAUSE, WHICH IS PLAC ED AT PAGE NO. 25 OF THE ASSESSEES PAPER BOOK. THEREFORE THE OBJECTION RAIS ED BY THE LD. CIT(E) IS NOT MAINTAINABLE. IN THE INSTANT CASE, THE LD. CIT(E) W HILE REFUSING THE REGISTRATION UNDER SECTION 12A OF THE ACT TO THE ASSESSEE, OBSER VED THAT NO EVIDENCE HAD BEEN FILED REGARDING ACCEPTANCE OF CHANGE OF COMPOS ITION OF THE SOCIETY BY REGISTRAR OF THE SOCIETY. IN MY OPINION IT CANNOT B E A GROUND TO DENY THE REGISTRATION UNDER SECTION 12A OF THE ACT. ON A SIM ILAR ISSUE THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT(E) CHA NDIGARH VS. SHRI MAHAVIR JAIN SOCIETY, LUDHIANA IN ITA NO. 231 OF 2016 ORDER DT. 11/09/2017 BY FOLLOWING THE JUDGMENT OF THE HON'BLE MADRAS HIGH COURT IN THE CA SE OF CIT VS. R.M.S TRUST REPORTED AT [2010] 326 ITR 310 UPHELD THE VIEW OF T HE ITAT WHEREIN IT WAS HELD THAT THE CIT WAS NOT RIGHT IN REFUSING THE REGISTRA TION TO THE ASSESSEE SOCIETY FOR NON FURNISHING OF EXPLANATION REGARDING REGISTRATIO N OF THE ASSESSEE SOCIETY TWICE 12 WITH THE REGISTRAR OF THE FIRM AND SOCIETY CHANDIGA RH. IN OTHER WORDS, THE REGISTRATION WITH THE REGISTRAR OF THE SOCIETY IS N OT A PRECONDITION FOR GRANTING THE REGISTRATION UNDER SECTION 12A OF THE ACT. THE ONLY REQUIREMENT FOR GRANTING THE REGISTRATION IS THAT THE OBJECT OF THE SOCIETY SHOU LD BE CHARITABLE IN NATURE AND ITS ACTIVITIES ARE GENUINE. THEREFORE MERELY ON THIS BA SIS THAT THE REGISTRAR OF THE SOCIETY HAD NOT INFORMED ABOUT THE CHANGE IN THE CO MPOSITION, CANNOT BE A GROUND TO REFUSE THE REGISTRATION UNDER SECTION 12A OF THE ACT. 21. IN THE PRESENT CASE, THE ANOTHER REASON GIVEN B Y THE LD. CIT(E) WHILE REFUSING THE REGISTRATION UNDER SECTION 12A OF THE ACT, WAS THAT THE ASSESSEE SOCIETY HAD NOT INCLUDED THE RESOLUTION CLAUSE. ON A SIMILAR ISSUE THE COORDINATE BENCH AT MUMBAI I.E; ITAT E BENCH MUMBAI IN THE C ASE OF TARA EDUCATIONAL AND CHARITABLE TRUST VS. DIT(E), PIRAMAL CHAMBERS, MUMBAI IN ITA NO. 1247/MUM/2013 FOR THE A.Y. 2012-13 VIDE ORDER DT. 1 8/07/2014 HELD AS UNDER: A PERUSAL OF THE IMPUGNED ORDER OF THE LD. DIT (EX EMPTIONS), HOWEVER, SHOWS THAT HE HAS NOT RECORDED ANY ADVERSE COMMENT OR DIS-SATI SFACTION ABOUT THE OBJECT OF THE TRUST OR GENUINENESS OF THE TRUST ACTIVITIES . HE HAS 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 LD. DIT ( EXEMPTIONS) THUS HAS CLEARLY 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 A CTIVITIES. WE THEREFORE SET ASIDE THE IMPUGNED ORDER OF THE LD. DIT (EXEMPTIONS) AND DIRECT THAT THE REGISTRATION U/S 12A OF THE ACT AS APPLIED BY THE ASSESSEE TRUST BE GRANTED. 22. IN THE PRESENT CASE ALSO THE LD. CIT(E) HAS NOT DOUBTED THE ACTIVITIES OF THE ASSESSEE FOR MAINTENANCE OF DHARAMSHALA AND FREE HO SPITAL, THESE ACTIVITIES ARE CHARITABLE IN NATURE AS HAS BEEN HELD BY HON'BLE RA JASTHAN HIGH COURT IN THE CASE OF CIT VS. PARAMHANS ASHRAM TRUST REPORTED AT [2009] 315 ITR 220 BY FOLLOWING THE EARLIER ORDER IN THE CASE OF SAME ASS ESSEE AS REPORTED AT 203 ITR 711, THAT: 13 CHARITABLE PURPOSE HAS BEEN DEFINED TO INCLUDE R ELIEF OF THE POOR, EDUCATION, MEDICAL RELIEF AND ADVANCEMENT OF ANY OTHER OBJECT OF GENERAL PUBLIC UTILITY NOT INVOLVING THE CARRYING ON OF ANY ACTIVITY FOR PROFI T. NORMALLY, IN A PRIVATE TRUST, THE BENEFICIAL INTEREST IS VESTED IN ONE OR MORE INDIVI DUALS WHEREAS A PUBLIC OR CHARITABLE TRUST, ON THE OTHER HAND, HAS OBJECTS BY WHICH THE PUBLIC AT LARGE IS BENEFITED. THE BENEFICIARIES ARE CAPABLE OF BEING A SCERTAINED IN A PRIVATE TRUST. IT HAS FURTHER BEEN HELD THAT THE OBJECTS OF THE ASSESSEE TRUST WERE MAINTENANC E OF THE EXISTING DHARAMSHALAS, HELP OF AGARWALS AND OTHER WIDOWS AND CHILDREN, FEEDING OF MENDICANTS, CONSTRUCTION OF NEW DHARMSHALAS AND SCH OOLS AND HELP OF DESTITUTES. THESE WERE CHARITABLE PURPOSES AND THE ASSESSEE WAS A PUBLIC CHARITABLE AND RELIGIOUS TRUST ENTITLED TO EXEMPTION UNDER SECTION 11. 23. IN THE INSTANT CASE, THE LD. CIT(E) DENIED THE REGISTRATION BY OBSERVING THAT THE HEAD OF THE SOCIETY IS RESTRICTED TO BE FROM SH REE DHAR VANSH AND NO OTHER MEMBER OF THE SABHA WILL HAVE ANY RIGHT TO RAISE AN Y OBJECTION. IN MY OPINION THAT CANNOT ALSO BE A GROUND TO REFUSE THE REGISTRA TION WHEN THE OBJECT OF THE ASSESSEE SOCIETY ARE CHARITABLE IN NATURE. ON A SIM ILAR ISSUE THE HON'BLE KOLKATA HIGH COURT IN THE CASE OF SMT. GANESH DEVI RAMI DEV I CHARITY TRUST VS. CIT REPORTED AT 71 ITR 696 HELD AS UNDER: (I) A TRUST MAY BE OF A PUBLIC CHARITABLE NATURE EVEN IF THE CONTROL OF THE TRUST PROPERTY WAS NOT VESTED IN THE PUBLIC BUT WAS RETAI NED BY THE SETTLERS; IT HAS FURTHER BEEN HELD THAT (V) A DHARAMSHALA IS ALWAYS MEANT FOR THE PUBLIC AND THE SANSKRIT PATHSALA WAS ALSO OPEN TO THE PUBLIC; AND, EVEN THOUGH ONLY BRAH MIN BOYS READ THERE, STILL IT WAS FOR THE PUBLIC ALSO; 24. IN THE PRESENT CASE ALSO THE LD. CIT(E) HIMSELF ADMITTED IN THE BODY OF THE IMPUGNED ORDER THAT THE ESTABLISHMENT OF FREE HOSPI TAL AND DHARAMSHALA WERE OBJECTS SEEMINGLY QUALIFIED FOR THE LABEL OF CHARIT ABLE PURPOSES. I THEREFORE BY KEEPING IN VIEW THE PECULIAR FACTS OF THIS CASE AS DISCUSSED HEREINABOVE CONCUR WITH THE VIEW OF THE LD. ACCOUNTANT MEMBER WHO HAS DIRECTED THE LD. CIT(E) TO GRANT THE REGISTRATION UNDER SECTION 12AA OF THE AC T TO THE ASSESSEE SOCIETY. 14 25. NOW THIS MATTER WILL GO TO THE REGULAR BENCH FO R GIVING EFFECT IN ACCORDANCE WITH THE MAJORITY VIEW. SD/- . .. . . .. . , ,, , ( N.K. SAIN I) / // / VICE PRESIDENT AG DATE: 08/01/2020 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. #/ CIT 4. # ()/ THE CIT(A) 5. , , ,/ DR, ITAT, AMRITSAR 6. , / GUARD FILE