M/s.Merciful Jesus Church, Kannur V. The CIT (Exemptions), Cochin

ITA 535/COCH/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 8381 (ITAT-COCHIN)
• Duration Of Justice: 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 18-07-2016
• Assessment Year: misc
• Appeal Filed On: 30-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHANTOM BOSE
• Keywords: Charitable institution
• Section: 12A

Judgement Text

ITA NO . 535/C/2015 1 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH KOCHI BEFORE S/ SHRI B P JAIN , AM & GEORGE GEORGE K, JM ITA NO 535/COCH/2015 MERCIFUL JESUS CHURCH ANAPANTHI ANGADIKADAVU PO KANNUR 670 706 VS THE COMMR OF INCOME AX (EXEMPTION) KOCHI ( APPELLANT) (RE SPONDENT) PAN NO. AADAM9167E ASSESSEE BY SH GEORGE THOMAS REVENUE BY SH SHANTOM BOSE, CIT - DR DATE OF HEARING 18 TH JU LY 2016 DATE OF PRONOUNCEMENT 27 TH JU LY 2016 ORDER PER GEORGE GEORGE K, JM; THIS APPEAL, AT THE INSTANCE OF THE ASSES SEE, IS D IRECTED AGAINST THE CIT (EXEMPTION )S ORDER DATED 29.9.2015. 2 THE GROUNDS RAISED READ AS FOLLOWS: I) THE ORDER OF THE CIT(E) IS AGAINST THE FACTS AND CIRCUMSTANCES OF THE ASSESSEES CASE AND HENCE OPPOSED TO THE PROVISIONS OF THE I T ACT. II) THE CIT(E) OUGHT TO HAVE CONSIDERED THE FACT THAT A CHARITABLE OR RELIGIOUS INSTITUTION NEED NOT BE A TRUST/SOCIETY IN ALL CASES. III) THE CIT(E) HAS ERRED IN STATING THAT THE ASSESSEE DID NOT FILE THE DOCUMENT EVIDENCING CREATION OF THE TRUST. THE ASSESSEE HAD FILED CERTIFIED COPY OF THE DECREE OF BISHOP BY WHICH THE INSTITUTION CAME INTO EXISTENCE. THE ASSESSEE WAS SEEKING REGISTRATION NOT AS A TRUST, BUT ONLY AS A RELIGIOUS INSTITUTION. ITA NO . 535/C/2015 2 IV) ANY OTHER GROUNDS THAT MAY BE ADDUCED AT THE TIME OF HEARING. 3 THE BRIEF FACTS OF THE CASE ARE AS FOLLOWS: THE ASSESSEE IS A ROMAN CATHOLIC PARISH, COMING UNDER THE DIOCESE OF TELLICHERR Y . THE ASSESSEE HAD FILED AN APPLICATION ON 31.3.2015 REQUESTING FOR REGISTRATION U/S 12A OF THE INCOME TAX ACT IN THE PRESCRIBED FORM NO.10A AS A RELIGIOUS INSTITUTION. THE CIT(E) REJECTED THE ASSESSEES APPLICATION STATING THAT SINCE THE APPLICANT HAS NOT PRODUCED ORIGINAL/COPY OF THE INSTRUMENT IN SUPPORT OF CREATION OF THE TRUST, THE OBJECTS AND ITS ACTIVITIES AS WELL AS THE EXISTENCE OF THE TRUST COULD NOT BE ASCERTAINED. I THEREFORE, REFUSE TO REGISTER THE TRUST AND THE APPLICATION FOR REGISTRATION U/S 12A FILED ON 31.3.2015 IS REJECTED. 4 AGGRIEVED BY THE ABOVE SAID ORDER, THE ASSESSEE IS IN APPEAL BEFORE US. THE LD AR, REFERRING TO RULE 17A OF THE INCOME TAX RULES 1962, CONTENDED THAT IT IS NOT NECESSARY THAT THE INSTITUTION/TRUST SHOULD BE ESTABLISHED UNDER AN INSTRUMENT. IT WAS CONTENDED THAT WHAT IS REQUIRED IS THE DOCUMENT EVIDENCING THE CREATION OF THE TRUST OR THE ESTABLISHMENT OF THE INSTITUTION TOGETHER WITH THE COPIES THERE OF . IT WAS STATED THAT THE ASSESSEE, IN THE INSTANCE CASE, WAS ESTABLISHED BY AN ORDER OF THE BISHIOP CALLED DECREE AND THE COPY OF THE SAME WAS FILED ALONG WITH THE APPLICATION IN FORM 10A AND THE ORI GINAL OF THE DECREE WAS PRODUCED FOR VERIFICATION AT THE TIME OF HEARING BEFORE THE CIT(E). THEREFORE, IT WAS SUBMITTED THAT IT WAS NOT PROPER ON THE PART OF THE CIT(E) TO ITA NO . 535/C/2015 3 DENY THE BENEFIT OF REGISTRATION FOR THE REASONS THAT ORIGINAL/COPY OF THE INSTRUMEN T IS NOT FILED IN SUPPORT OF CREATION OF THE TRUST . 5 ON THE OTHER HAND, THE LD DR SUPPORTED THE ORDER OF THE CIT(E). 6 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE FOR OUR CONSIDERATION IS WHETHER EXECUTION OF A FOR MAL DEED OF TRUST IS NECESSARY FOR GRANTING REGISTRATION U/S 12A OF THE I T ACT. RULE 17A OF THE INCOME TAX RULES 1962 , DEALS WITH THE PROCEDURE FOR APPLICATION FOR REGISTRATION OF CHARITABLE/RELIGIOUS TRUST OR INSTITUTION U/S 12A OF THE ACT. RULE 17A OF THE I T RULES, 1962 READS AS FOLLOWS: 17A - AN APPLICATION UNDER { CLAUSE (AA) OF SUB.SEC (1) } OF SECTION 12A FOR REGISTRATION OF A CHARITABLE OR RELIGIOUS TRUST OR INSTITUTION SHALL BE MADE IN DUPLICATE IN FORM NO.10A AND SHALL BE ACCOMPANIED THE FOLLOWI NG DOCUMENTS NAMELY; A ) WHERE THE TRUST IS CREATED, OR THE INSTITUTION IS ESTABLISHED, UNDER AN INSTRUMENT, THE INSTRUMENT IN ORIGINAL, TOGETHER WITH ONE COPY THEREOF, AND WHERE THE TRUST IS CREATED, OR THE INSTITUTION IS ESTABLISHED, OTHERWISE THEN UNDER AN INSTRUMENT, THE DOCUMENT EVIDENCING THE CREATION OF THE TRUST OR THE ESTABLISHMENT OF THE INSTITUTION, TOGETHER WITH ONE COPY THEREOF; PROVIDED THAT IF THE INSTRUMENT OR DOCUMENT IN ORIGINAL CANNOT CONVENIENTLY BE PRODUCED, IT SHALL BE OPEN TO THE COMMISS IONER TO ACCEPT A CERTIFIED COPY IN LIEU OR THE ORIGINAL; B ) WHERE THE TRUST OR INSTITUTION HAS BEEN IN EXISTENCE DURING ANY YEAR OR YEARS, PRIOR TO THE FINANCIAL YEAR IN WHICH THE APPLICATION FOR REGISTRATION IS MADE, TWO COPIES OF THE ACCOUNTS OF THE TRUS T OR INSTITUTION RELATING TO SUCH PRIOR YEAR OR YEARS (NOT BEING MORE THAN THREE YEARS IMMEDIATELY PRECEDING THE YEAR IN WHICH THE SAID APPLICATION IS MADE) FOR WHICH SUCH ACCOUNTS HAVE BEEN MADE UP.) ITA NO . 535/C/2015 4 7. A PLAIN READING OF RULE 17A MAKE IT CLEAR THAT A R ELIGIOUS OR CHARITABLE ORGANIZATION CAN BE AN INSTITUTION OTHER THAN A TRUST. THE USAGE OF THE WORDS CHARITABLE OR RELIGIOUS TRUST OR INSTITUTION IN THE FIRST AND SECOND LIMB OF THE RULE 17A CONNOTES THAT; WHERE THE TRUST IS CREATED OR INSTITUTION IS E STABLISHED, UNDER AN INSTRUMENT, THE INSTRUMENT IN ORIGINAL TOGETHER WITH A COPY THEREOF, HAS TO BE FILED ALONG WITH THE PRESCRIBED FORM NO.10A FOR REGISTRATION. HOWEVER, THE SECOND LIMB OF RULE 17A PROVIDES THAT WHERE THE TRUST IS CREATED OR THE INST ITUTION IS ESTABLISHED, OTHERWISE THAN BY AN INSTRUMENT, THE DOCUMENT EVIDENCING THE CREATION OF THE TRUST OR THE ESTABLISHMENT OF THE INSTITUTION, TOGETHER WITH ONE COPY OF THEREOF, HAS TO BE FILED ALONG WITH THE APPLICATION IN FORM 10A FOR REGISTRATION O F THE INSTITUTION/TRUST U/S12A. THUS, THE APPLICABLE RULE 17A ITSELF PROVIDES THAT IT IS NOT EVEN NECESSARY THAT THE INSTITUTION/TRUST SHOULD BE ESTABLISHED UNDER AN INSTRUMENT. WHAT IS REQUIRED IS ONLY A DOCUMENT EVIDENCING THE CREATION OF THE TRUST OR TH E ESTABLISHMENT OF THE INSTITUTION TOGETHER WITH A COPY THEREOF. IN THE INSTANT CASE, ASSESSEE IS A RELIGIOUS INSTITUTION (PARISH) CREATED UNDER THE CONVENTIONAL WAY BY ISSUING A DECREE UNDER CANNON LAW BY THE CONCERNED BISHOP. THE CREATION OF RELIGIOUS INSTITUTION IS EVIDENCED BY THE DECREE ISSUED BY THE BISHOP. THE TR UE COPY OF THE DECREE HAS BEEN PLACED IN THE PAPER BOOK FILED BY THE ASSESSEE (PAGES 43 OF THE PAPER BOOK) ITA NO . 535/C/2015 5 8 THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF TSURPHY LABRANT VS DIT(EXEM PTION) IN ITA NOS. 4941/DEL/2011 , VIDE ORDER DATED 8.9.2015, HAD ELABORATELY CONSIDERED THE ISSUE WHETHER FOR REGISTRATION U/S 12AA/12A OF THE I T ACT 1961, AN EXECUTION OF A FORMAL DEED OF TRUST IS NECESSARY . THE C OORDINATE BENCH OF THE TRIBUNAL HELD THA T THERE IS NO SUCH REQUIREMENT AND EVIDENCE FOR CREATION OF THE TRUST OR THE ESTABLISHMENT OF INSTITUTION WOULD BE SUFFICIENT FOR SEEKING REGISTRATION U/S 12A OF THE I T ACT. THE TRIBUNAL, AFTER CONSIDERING RULE 17A OF THE I T RULES 1962, HELD AT PARAS 13 TO 17 OF ITS ORDER , AS FOLLOWS: 13. A PLAIN READING OF RULE 17A(A) MAKES IT CLEAR THAT WHERE THE TRUST IS CREATED, OR THE INSTITUTION IS ESTABLISHED, UNDER AN INSTRUMENT, THE INSTRUMENT IN ORIGINAL, TOGETHER WITH ONE COPY THEREOF, HAS TO BE FILED ALONG WITH PRESCRIBED FORM NO.10A FOR REGISTRATION OF THE INSTITUTION/TRUST U/S 12A OF THE ACT. HOWEVER, THE SECOND LIMB OF RULE 17A(A) PROVIDES THAT WHERE THE TRUST IS CREATED, OR THE INSTITUTION IS ESTABLISHED, OTHERWISE THAN UNDER AN INSTRUMENT, THE DOCUMENT EVIDENCING THE CREATION OF THE TRUST OR THE ESTABLISHMENT OF THE INSTITUTION, TOGETHER WITH ONE COPY THEREOF, HAS TO BE FILED ALONG WITH THE STATUTORY FORM NO.10A FOR REGISTRATION OF THE INSTITUTION/TRUST U/S 12AA/12A OF THE ACT. THUS, THE APPLICABLE RULE 17A ITSELF PROVIDES THAT IT IS NOT NECESSARY THAT THE INSTITUTION/TRUST SHOULD BE ESTABLISHED UNDER AN INSTRUMENT. THE RULE 17A DOES NOT PRESCRIBE THAT IN CASE THE INSTITUTION/TRUST IS ESTABLISHED OTHERWISE THAN UNDER AN INSTRUMENT, WHAT TYPE OF DOCUMENT EVIDENCING THE CREATION OF THE TRUST OR THE ESTABLISHMENT OF THE INSTITUTION, HAS TO BE FILED, MEANING THEREBY THAT THE DOCUMENT EVIDENCING THE CREATION OF TRUST OR THE ESTABLISHMENT OF INSTITUTION COULD BE OF ANY TYPE. AS PER THE PROVISIONS OF THE INDIAN TRUST ACT, THE TRUST CAN BE CREATED EVEN ORALLY AND IF THE ASSESSEE IS ABLE TO GIVE SOME EVIDENCE OF CREATION OF SUCH TRUST BY A WORD OF MOUTH, THE SAME SHALL BE ELIGIBLE FOR REGISTRATION U/S 12AA/12A OF THE ACT, PROVIDED SUCH EVIDENCE IS FILED AND THE OTH ER CONDITIONS UNDER THE STATUTE ARE SATISFIED. 14. WE FIND THAT THE ARGUMENT OF THE LEARNED CIT - DR, THAT PROCEDURALLY IN ORDER TO HAVE A VALID TRUST UNDER INDIAN TRUST ACT, 1882 AN INSTRUMENT DECLARING TRUST SHOULD BE MADE ON NON - JUDICIAL STAMP PAPER WI TH PRESCRIBED FEE SIGNED BY THE SETTLERS AND ALL THE TRUSTEES AND SHOULD BE REGISTERED WITH THE REGISTRAR OF PROPERTIES ETC., IS DEVOID OF ANY MERIT AS RULE 17A OF THE INCOME - TAX RULES, 1962 ITSELF PROVIDES THAT WHERE THE INSTITUTION OR THE TRUST IS ESTABL ISHED OTHERWISE THAN ITA NO . 535/C/2015 6 UNDER AN INSTRUMENT, THE DOCUMENT EVIDENCING THE CREATION OF THE TRUST OR THE ESTABLISHMENT OF THE INSTITUTION, TOGETHER WITH ONE COPY THEREOF CAN BE FILED ALONG WITH THE PRESCRIBED FORM NO.10A FOR REGISTRATION U/S 12AA/12A OF THE ACT. WHAT WOULD BE THE DOCUMENT EVIDENCING CREATION OF THE TRUST OR THE ESTABLISHMENT OF THE INSTITUTION, HAS NOT BEEN DEFINED IN THE RULES. ACCORDINGLY, ANY EVIDENCE TO ESTABLISH THE CREATION OF THE TRUST OR THE ESTABLISHMENT OF THE INSTITUTION COULD BE FILED BY THE ASSESSEE IN SUPPORT OF ITS CASE. THE ARGUMENT OF THE LEARNED CIT - DR THAT THE ASSESSEE HAS NOT FILED THE NAMES AND ADDRESSES OF THE DONORS, WE FIND THAT THE DONATION CAN BE ANONYMOUS ALSO AND THE TAXABILITY THEREOF CAN BE DECIDED AT THE TIME OF ASSE SSMENT TO BE FRAMED BY THE DEPARTMENT. THE PLEA OF THE LEARNED CIT - DR, THAT THE TRUSTEES TOOK REFUGE IN SIKKIM WHICH IS PART OF INDIA SINCE 1975 FOR 35 YEARS, NO RETURN OF INCOME WAS FILED BY THE ASSESSEE NOR ANY APPLICATION FOR REGISTRATION U/S 12A WAS SU BMITTED AND THAT THE RETURNS FOR THE ASSESSMENT YEAR 2005 - 06 TO 2010 - 11 DO NOT CONTAIN THE STAMP AFFIXED BY THE DEPARTMENT SHOWING THE DATE OF RECEIPT THEREOF, HAS NO RELEVANCE AS THE ASSESSEE HAS SOUGHT THE BENEFIT OF REGISTRATION U/S 12AA/12A FROM ASSESS MENT YEAR 2011 - 12 ONWARDS ONLY AND NOT THE EARLIER YEARS. THE PLEA OF THE LEARNED CIT - DR REGARDING THE INVOLVEMENT OF THE NAME OF THE 17TH KARMAPA IN A CASE U/S 120B (CRIMINAL CONSPIRACY) OF INDIAN PENAL CODE, WHICH WAS LATER ON QUASHED BY THE LOWER COURT AGAINST THE KARMAPA AND THE ORDER OF THE LOWER COURT HAS BEEN REVERSED BY THE HONBLE HIGH COURT OF HIMACHAL PRADESH AND AS A RESULT, THE KARMAPA WILL REMAIN AN ACCUSED AND TRIAL WOULD CONTINUE AGAINST HIM IN THIS CASE, IS OF NO CONSEQUENCE AS THE SAME PER TAINS TO THE VIOLATION OF LAW OF THE LAND FOR WHICH SEPARATE PROCEEDINGS ARE PENDING BEFORE THE HONBLE COURT AND SHALL NOT AFFECT THE ISSUE THAT WHETHER THE ASSESSEE TRUST WAS HAVING AIMS AND OBJECTS AND PURPOSES OF CHARITABLE IN NATURE ENTITLED TO REGIST RATION U/S 12AA/12A OF THE ACT. 15. IN LAXMINARAYAN MAHARAJ AND ANOTHER VS. CIT [1984] 150 ITR 465 (MP), THE TRUST WAS CREATED 100 YEARS AGO WITHOUT ANY INSTRUMENT OF DOCUMENT. HOWEVER, THE REVENUE RECORDS RELATING TO LAND HELD BY THE TRUST, ORDERS RE LATING TO PROPERTY TAX AND AFFIDAVITS AND DECLARATION OF CITIZENS WERE IN SUPPORT OF EXISTENCE OF TRUST AND WERE FILED ALONG WITH APPLICATION FOR REGISTRATION U/S 12A OF THE ACT. THE COMMISSIONER OF INCOME TAX REJECTED THE APPLICATION ON THE GROUND THAT TH OUGH DOCUMENTS EVIDENCED EXISTENCE OF TRUST BUT DID NOT EVIDENCE THE CREATION OF THE TRUST. HONBLE MADHYA PRADESH HIGH COURT HELD THAT THE DOCUMENT ACCORDED A LOGICAL BASIS FOR INFERRING CREATION OF THE TRUST AND MATTER WAS REMANDED BACK TO THE COMMISSION ER TO RECONSIDER THE APPLICATION OF THE TRUST IN THE LIGHT OF THE OBSERVATIONS MADE BY THE HONBLE HIGH COURT. THE HONBLE HIGH COURT HELD : - WHEN THE TRUST IS A TRUST CREATED UNDER AN INSTRUMENT, RULE 17 REQUIRES FILING OF 'THE INSTRUMENT IN ORIGINAL' AND WHEN THE TRUST IS CREATED OTHERWISE THAN UNDER AN INSTRUMENT 'THE DOCUMENT EVIDENCING THE CREATION OF THE TRUST HAS TO BE FILED. AN ANALYSIS OF SECTION 12A(A) AND RULE 17A(A) WILL SHOW THAT THE FACT TO BE ESTABLISHED IS THE CREATION OF TRUST AND THIS FACT IS ITA NO . 535/C/2015 7 REQUIRED TO BE ESTABLISHED BY PRODUCING CONSTITUTIVE AND EVIDENTIAL DOCUMENTS. WHEN THE TRUST IS CREATED UNDER AN INSTRUMENT, THE RULE REQUIRES THE PRODUCTION OF THE CONSTITUTIVE DOCUMENT ITSELF, I.E., THE INSTRUMENT WHICH CREATES THE TRUST. WHEN T HE TRUST IS NOT CREATED UNDER AN INSTRUMENT, IT IS IMPOSSIBLE TO PRODUCE ANY CONSTITUTIVE DOCUMENT AND, HENCE, THE RULE REQUIRES PRODUCTION OF EVIDENTIAL DOCUMENTS, I.E., THE DOCUMENTS EVIDENCING THE CREATION OF THE TRUST. THE EVIDENTIAL DOCUMENTS CANNOT B E LIMITED TO DOCUMENTS WHICH DIRECTLY PROVE THE CREATION OF THE TRUST; THEY WILL EMBRACE ALL DOCUMENTS WHICH AFFORD A LOGICAL BASIS OF INFERRING CREATION OF THE TRUST AND ALL SUCH DOCUMENTS CAN BE DESCRIBED TO BE 'DOCUMENT EVIDENCING THE CREATION OF THE TR UST' WITHIN THE MEANING OF RULE 17A( A). A DOCUMENT DIRECTLY EVIDENCING THE CREATION OF THE TRUST IS NORMALLY THE CONSTITUTIVE DOCUMENT WHICH CANNOT BE PRODUCED WHEN THE TRUST IS NOT CREATED BY AN INSTRUMENT AND IF THE WORDS 'DOCUMENT EVIDENCING THE CREATI ON OF THE TRUST' ARE CONSTRUED AS LIMITED TO DOCUMENTS DIRECTLY EVIDENCING THE CREATION OF THE TRUST, IT WILL BE NEARLY IMPOSSIBLE TO HAVE A TRUST REGISTERED WHICH WAS NOT CREATED UNDER AN INSTRUMENT. THIS COULD NEVER HAVE BEEN THE INTENTION OF THE FRAMERS OF THE RULE. IN OUR OPINION, THESE WORDS EMBRACE ALL EVIDENTIAL DOCUMENTS, I.E., ALL DOCUMENTS WHICH AFFORD A LOGICAL BASIS OF INFERRING CREATION OF THE TRUST. THE REVENUE PAPERS PRODUCED BY THE PETITIONERS CONSISTED OF JAMABANDIS OF 1910 - 11, 1929 - 30, PAT TA ISSUED IN 1931 AND JAMABANDI OF 1954 - 55. IN ALL THESE DOCUMENTS, THE PETITIONER - TRUST IS ENTERED AS TENANT OR BHUMISWAMI AND THE NAME OF THE SARBARAHKAR IS ALSO MENTIONED. THE ASSESSMENT ORDERS RELATING TO THE PROPERTY TAX FOR 1967 - 68 TO 1974 - 75 WERE FI LED. ALL THESE DOCUMENTS, THOUGH NOT DIRECTLY EVIDENCING THE CREATION OF THE TRUST, AFFORD A LOGICAL BASIS FOR INFERRING CREATION OF THE TRUST PRIOR TO 1910 - 11 AND CAN BE DESCRIBED AS DOCUMENTS EVIDENCING CREATION OF THE TRUST FOR PURPOSES OF RULE 17A. IN OUR OPINION, THE COMMISSIONER WAS NOT RIGHT IN TAKING A VERY NARROW VIEW OF RULE 17A AND IN HOLDING THAT THE PETITIONER - TRUST HAS NOT COMPLIED WITH THAT RULE. 16. THE SLP AGAINST THIS DECISION OF HONBLE MADHYA PRADESH HIGH COURT IN CIT VS. LAXMINARAYA N MAHARAJ AND ANOTHER WAS DISMISSED BY THE HONBLE APEX COURT IN 186 ITR 32 (ST.)(SC). 17. IN THE CASE OF THE ASSESSEE BEFORE US, THE ASSESSEE HAS CLAIMED THAT THE INSTITUTION/TRUST WAS CREATED CENTURIES AGO IN THE YEAR 1159 AD AND THAT NO FORMAL DEED F OR THE TRUST WAS EXECUTED AT THAT TIME. WE FIND THAT THE INDIAN TRUST ACT HAS NOT COME INTO EXISTENCE IN THE YEAR 1159 AD AND IT WAS NOT POSSIBLE TO EXECUTE A DEED OF TRUST ON STAMP PAPER OR IN WRITING CENTURIES AGO. HOWEVER, THE SUPREME HEAD OF THE TRUST, I.E., 17TH KARMAPA, WHO IS THE SUPREME SPIRITUAL HEAD OF KARMA KAGYU LINEAGE, HAS MADE A DECLARATION OF TRUST ON STAMP PAPER ON 29TH DAY OF MARCH, 2011 AT DELHI, WHEREIN THE ENTIRE HISTORY OF THE TRUST ALONG WITH THEIR AIMS, OBJECTS AND PURPOSES OF THE TR UST, VARIOUS PROVISIONS WITH REGARD TO THE MANAGEMENT OF THE TRUST AND ITS PROPERTIES AND MAINTENANCE OF ACCOUNTS ITA NO . 535/C/2015 8 ETC. HAVE BEEN DETAILED ON SOLEMN AFFIRMATION. IT HAS BEEN DECLARED ON OATH BY THE PRESENT SPIRITUAL HEAD OF ASSESSEE TRUST THAT HIS HOLINESS THE 1ST KARMAPA, AS HEAD OF THE KARMA KAGYU LINEAGE, HAS FOUNDED AND ESTABLISHED THE TSURPHU MONASTERY IN TOLUNG VALLEY IN CENTRAL TIBET IN 1159 AD TO BE THE MAIN SEAT OF THE KARMA KAGYU LINEAGE, A SECT OF BUDDHISM PRACTICED ALL OVER THE WORLD. IT DECLARED THAT THE PRESENT 17TH KARMAPA IS THE SUPREME SPIRITUAL HEAD OF KARMA KAGYU LINEAGE AND THAT HE IS RECOGNIZED ALL OVER WORLD AND THE VOLUNTARILY CUSTOMARY OFFERINGS FROM DEVOTEES ALL OVER THE WORLD REMAIN UNTOUCHED BY KARMAPAS, AS THEY DO NOT ACCEPT OR OWN ANY KIND OF PROPERTIES PERSONALLY BY CONTINUING TRADITION OF DIVERTING ALL THESE OFFERINGS AT SOURCE TO CHARITABLE PURPOSES OF GENERAL PUBLIC UTILITY AND FOR PRESERVATION AND PROPAGATION OF DHARMA AND GYAN. HE DECLARED THAT IN THE YEAR 1974, HIS HOLINESS THE 16TH KARMAPA FOLLOWED BY LAMAS, SANGHA AND LAY COMMUNITIES CARRYING WITH THEM RELIGIOUS RITUAL ARTICLES, MURALS AND LAMA DANCE COSTUMES FLED TIBET AND CAME INTO EXILE IN THE ERSTWHILE HIMALAYAN KINGDOM OF SIKKIM, NOW A PART OF INDIA. LATER ON THE SEAT OF HIS HOLINESS THE 17TH KARMAPA MOVED TO DHARAMSHALA IN HIMACHAL PRADESH IN JANUARY, 2000 AND THE NATIONAL HEADQUARTERS OF TSURPHU LABRANG WERE LOCATED IN DELHI. IT WAS DECLARED IN THE DECLARATION OF THE TRUST THAT THE TRUSTEES STAND POSSESSED OF THE TRU ST FUND COMPRISED OF THE MONEYS AND OTHER PROPERTIES, BOTH MOVABLE AND IMMOVABLE, WHICH ARE DULY ACCOUNTED FOR IN THE BOOKS OF ACCOUNTS OF TSURPHU LABRANG AND IS CARRIED FORWARD EVERY YEAR ON ITS BALANCE SHEET AND THE INCOME ARISING THERE FROM IS APPLIED TO THE ADMINISTRATION OR EXECUTION OF THE AIMS AND OBJECTS OF THE TRUST. WE HOLD THAT IN ACCORDANCE WITH THE PROVISIONS OF THE INCOME - TAX ACT, 1961 AND RULES MADE THERE UNDER, THE EXECUTION OF A FORMAL DEED OF TRUST WAS NOT NECESSARY FOR GRANT OF REGISTRAT ION U/S 12AA/12A OF THE ACT. 9 IN THE INSTANT CASE , AS MENTIONED EARLIER, THE RELIGIOUS INSTITUTION WAS ESTABLISHED BY AN ORDER OF A BISHOP, CALLED DECREE . ON PERUSAL OF THE DECREE, IT IS CLEAR THAT A RELIGIOUS INSTITUTION IS ESTABLISHED. THEREFORE, WE ARE OF THE VIEW THAT IT IS NOT CORRECT ON THE PART OF THE CIT(E) TO DENY REGISTRATION TO THE APPELLANT U/S 12A OF THE A CT , FOR THE REASON THAT COPY OF THE INSTRUMENT IN SUPPORT OF CREATION OF TRUST IS NOT FILED ALONG WITH FORM 10A. IT IS ORDERED ACCOR DINGLY. ITA NO . 535/C/2015 9 10 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 27 TH DAY OF JULY 2016 . SD/ SD/ - B P JAIN GEORGE GEORGE K (ACCOUNTANT MEMBER ) (JUDICIAL MEMBER ) COCHIN: DATED 27 TH JULY 2016 RAJ* COPY T O: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT, 5 . DR 6 . GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT, COCHIN