KHIMJI BHAGWANDAS CHARITY TRUST, MUMBAI V. DIT (E), MUMBAI

ITA 5949/MUM/2009

• Counselvise Citation: 594919914 RSA 2009
• Duration Of Justice: 1 year(s) 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: misc
• Appeal Filed On: 09-11-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUM EET KUMAR
• Assessee Lawyers: K SHIVARAM
• Section: 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D, MUMBAI BEFORE SHRI P.M. JAGTAP, A.M. AND SHRI R.S. PADVEKA R, J.M. I.T.A. NO.: 5949/MUM/2009 ASSESSMENT YEAR: N.A. M/S. KHIMJI BHAGWANDAS CHARITY TRUST LOHANA BHAVAN, PALIRAM ROAD, BEHIND MUNCIPAL OFFICE, ANDHERI(W), MUMBAI-400 058 PAN NO: AAATK3037D VS. OFFICE OF THE DIRECTOR OF INCOME TAX (EXEMPTION), 6 TH FLOOR, PIRAMAL CHAMBERS, PAREL, MUMBAI-400 012 (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K. SHIVARAM RESPONDENT BY : SHRI SUMEET KUMAR ORDER PER R. S. PADVEKAR (J.M.) : THIS APPEAL IS FILED BY THE ASSESSEE CHALLENGING T HE IMPUGNED ORDER OF THE DIRECTOR OF INCOME TAX (EXEMPTION), MUMBAI (IN SHORT DIT), MUMBAI DATED 07.09.2009, IN WHICH REGISTRATION GRANTED TO THE ASSESSEE U/S.12A OF THE I.T. ACT HAS BEEN CANCELLED FROM 09.05.1975. TH E ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS IN THE APPEAL :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LEARNED DIRECTOR OF INCOME-TAX (EXEMPTION), MUMBAI (HEREINAFTER REFERRED TO AS LEARNED D.I.T. ( E)) GROSSLY ERRED IN CANCELING THE REGISTRATION OF THE APPELLANT UNDER SECTION 12AA (3) OF THE I.T.ACT, 19 61 WITH EFFECT FROM THE DATE ON WHICH REGISTRATION WAS GRANTED I.E.09.05.1975. 2. THE LEARNED D.I.T. (E) ERRED IN CANCELLING THE REGISTRATION OF THE APPELLANT ON THE GROUND THAT TH E ACTIVITIES OF THE TRUST PERTAINING TO MEDICAL RELIE F IS NOT BEING CARRIED ON IN ACCORDANCE WITH THE OBJECTS OF THE TRUST. 2 3. THE LEARNED D.I.T. (E) FAILED TO APPRECIATE THAT THE MONETARY HELP AND ASSISTANCE FOR MEDICAL TREATMENT GIVEN BY THE TRUST OVER THE YEARS IS A GENUINE CHAR ITABLE ACTIVITY THAT IS IN ACCORDANCE WITH THE OBJECTS OF THE TRUST THAT ARE CHARITABLE AND, THEREFORE, REGISTRATION OU GHT TO HAVE BEEN GRANTED. 2. BRIEFLY STATED FACTS OF THE CASE ARE AS UNDER :- THE ASSESSEE TRUST IS REGISTERED AS A PUBLIC CHARIT Y TRUST UNDER PROVISIONS OF THE BOMBAY PUBLIC TRUSTS ACT, 1950, H AVING REGISTRATION NO.A- 2113( BOM.) GRANTED BY THE CHARITY COMMISSIONER, MA HARASHTRA STATE, BOMBAY. AS PER THE FACTS NOTED BY THE LD.DIT, MUMBA I, THE CITY CIVIL COURT AT BOMBAY IN C.A. SUIT NO.100 OF 1957, APPROVED A S CHEME FRAMED FOR THE MANAGEMENT AND ADMINISTRATION OF THE ASSESSEE TRUST WHICH WAS THEN RE- NAMED AS KHIMJI BHAGWANDAS CHARITY TRUST. THE PRE SENT ASSESSEE WAS GRANTED REGISTRATION U/S.12A OF THE I.T. ACT, BEARI NG REGISTRATION NO.TR/5466 DATED 09.05.1975. AFTER EXAMINING THE OB JECT OF THE TRUST, IT WAS FOUND BY THE LD. D.I.T THAT SPECIFIC AMOUNTS HA VE BEEN FIXED FOR EACH OF THE OBJECTS OF THE ASSESSEES TRUST. IT WAS NOTICED BY THE LD. D.I.T THAT THE ASSESSEE TRUST HAS SPENT `. 2,42,300/- ON MEDICAL RELIEF, AND THE SAID EXPENDITURE WAS NOT COVERED AS PER THE OBJECTS OF T HE TRUST. IN THE OPINION OF THE LD. D.I.T, THE OBJECTS OF THE TRUST HAVING BEEN SPECIFIED BY THE LD. CITY CIVIL COURT, MUMBAI UNDER THE SCHEME FRAMED FOR THE MANAGEMENT AND ADMINISTRATION OF THE PUBLIC TRUST AND HENCE, ASSES SEE CANNOT USE ITS FUNDS CONTRARY TO THE SCHEME FRAMED BY THE CITY CIVIL COU RT, MUMBAI. THE LD. D.I.T. HAS DISCUSSED THE SCHEME FRAMED BY THE CITY CIVIL COURT, MUMBAI FOR THE MANAGEMENT AND ADMINISTRATION OF THE ASSESSEE T RUST, AND FINALLY CONCLUDED THAT THE ASSESSEE HAS CARRIED OUT THE ACT IVITY WHICH IS NOT AS PER THE OBJECT OF THE TRUST AND SAME IS IN VIOLATION OF THE ORDER OF THE CITY CIVIL COURT, MUMBAI ORDER DATED 18.12.1957. THE LD. D.I.T . CANCELLED THE REGISTRATION U/S.12A TO THE ASSESSEE. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTI ES AND PERUSED THE RECORDS. THE LD. COUNSEL SUBMITS THAT THE ASSESSEE HAS BEEN GRANTED THE REGISTRATION U/S.12A OF THE ACT, AND THERE IS NO DI SPUTE ABOUT THIS FACT. HE 3 FURTHER ARGUED THAT PRIOR TO 01.06.2010, THE LD. D. I.T HAD NO POWERS TO CANCEL THE REGISTRATION GRANTED U/S.12A OF THE ACT. THE LD. COUNSEL REFEREED TO THE SUB-SEC.(3) TO SEC. 12A. WE HAVE ALSO HEARD THE LD. DR. 4. SUB-SECTION 3 TO SECTION 12A HAS BEEN AMENDED BY THE FINANCE ACT, 2010 WITH EFFECT FROM 01.06.2010, AND IN CONSEQUENC ES OF THE SAID AMENDMENT, THE D.I.T OR THE LD. CIT (A) HAS BEEN VE STED WITH POWER TO CANCEL THE REGISTRATION GRANTED U/S.12A OF THE ACT. HENCE, ONLY FROM 01.06.10, THE LD. DIT HAS POWER TO CANCEL REGISTRAT ION GRANTED UNDER SEC. 12A OF THE ACT. WE, THEREFORE, HOLD THAT THE ORDER PASSED BY THE LD. D.I.T DATED 07.09.2009, IS BAD IN LAW AND WITHOUT DUE AUT HORITY OF LAW. WE ACCORDINGLY, CANCEL IMPUGNED ORDER AS THE LD. DIT H AS NO POWER ON THAT DAY TO CANCEL THE REGISTRATION GRANTED U/S. 12A OF THE ACT. 5. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED ON THIS 27 TH DAY OF APRIL, 2011. SD/- SD/- ( P.M. JAGTAP ) (R.S. PADVEKAR ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DT: 27 TH APRIL, 2011 COPY FORWARDED TO : 1. THE APPELLANT, 2. THE RESPONDENT, 3. THE C.I.T. 4. CIT (A) 5. THE DR, D - BENCH, ITAT, MUMBAI //TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI ROSHANI