LAXMI VIJAY EDUCATION FOUNDATION, MUMBAI V. DIT (E), MUMBAI

ITA 606/MUM/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 5106 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 13-11-2013
• Assessment Year: 2012-2013
• Appeal Filed On: 22-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A C TEJPAL
• Section: 12A; 12AA

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL H B ENCH, MUMBAI , , !' #$% , !& ! ' BEFORE SHRI VIJAY PAL RAO, JM AND SHRI N.K. BILLAIYA, AM ./ I.T.A. NO. 606/MUM/2013 ( ( ( ( ( / ASSESSMENT YEAR : 2012-13 LAXMI EDUCATION FOUNDATION, 31-A, NOBLE CHAMBERS, JAMMA BHUM MARG, FORT, MUMBAI-400 001 THE DIRECTOR OF INCOME TAX (EMEMPTION), 6 TH FLOOR, PIRAMAL CHAMBERS, PAREL, MUMBAI-400 012 ) !& ./ * ./PAN/GIR NO. : AAATL 9352Q ( )+ /APPELLANT ) .. ( ,-)+ / RESPONDENT ) )+ . ! / APPELLANT BY : ` SHRI JAYESH DADIA ,-)+ / . ! /RESPONDENT BY : SHRI A.C. TEJPAL / 01& / DATE OF HEARING :13.11.2013 23( / 01& / DATE OF PRONOUNCEMENT :20.11.2013 !4 / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE DIT(EXEMPTION) MUMBAI DT.19.12.2012. 2. THE SOLE GRIEVANCE OF THE ASSESSEE IS THAT THE D IT(EXEMPTION) HAS ERRED IN LAW AND ON THE FACTS IN NOT GRANTING THE R EGISTRATION U/S. 12A OF THE I.T. ACT. ITA NO.606/M/2013 2 3. A PERUSAL OF THE ORDER U/S. 12AA(1)(B)(II) R.W.S EC. 12A OF THE ACT OF THE DIT(EXEMPTION) SHOWS THAT THE ASSESSEE TRU ST FILED AN APPLICATION FOR REGISTRATION U/S. 12A OF THE ACT ON 1.6.2012. THE TRUST WAS CONSTITUTED BY A TRUST DEED DT. 21.7.2011, WHICH WAS REGISTERED WITH THE CHARITY COMMISSIONER, MUMBAI ON 8.12.2011. THE DIT(EXEMPTI ON) CALLED FOR VARIOUS DETAILS FROM THE ASSESSEE TRUST TO SUBSTANT IATE ITS CLAIM FOR REGISTRATION U/S. 12A OF THE ACT. THE DIT(EXEMPTIO N) HAS DISCUSSED AT LENGTH ON VARIOUS OBJECTS OF THE ASSESSEE TRUST AT PARA-3 OF HIS ORDER AND ON PARA-4 THE DIT(EXEMPTION) OBSERVED THAT THE ASS ESSEE TRUST HAS NOT CARRIED OUT ANY ACTIVITY SO FAR. THE DIT(EXEMPTION ) WAS OF THE OPINION THAT MERE CREATION OF TRUST IS NOT SUFFICIENT TO EN TITLE IT TO REGISTRATION. THE DIT(EXEMPTION) WAS ALSO OF THE FIRM BELIEF THAT I T IS NOT POSSIBLE TO VERIFY THE GENUINENESS OF THE ACTIVITIES UNDERTAKEN BY THE TRUST IN PURSUANCE OF ITS OBJECTS. SINCE NO CONCRETE ACTIVI TIES ARE ACTUALLY BEEN UNDERTAKEN BY THE ASSESSEE TRUST AS THE ASSESSEE TR UST HAS NOT CARRIED OUT ANY ACTIVITIES, THE DIT(EXEMPTION) WAS OF THE OPIN ION THAT THERE WAS NO MATERIAL ON RECORD TO ENABLE HIM TO SATISFY HIMSEL F ABOUT THE GENUINENESS OF THE TRUST. THE DIT(EXEMPTION) FINALLY CONCLUDE D THAT THE ASSESSEE TRUST HAS FAILED TO COMPLY WITH THE MANDATORY REQUI REMENTS PRESCRIBED U/S. 12AA READ WITH RULE 17A AND REJECTED THE APPLI CATION FOR GRANT OF REGISTRATION. 4. AGGRIEVED BY THIS, THE ASSESSEE IS BEFORE US. TH E LD. COUNSEL FOR THE ASSESSEE EMPHASIZED ON THE FACT THAT THE TRUST WAS CONSTITUTED ON 21.7.2011 WHICH WAS REGISTERED WITH THE CHARITY COM MISSIONER ON 8.12.2011 AND THE APPLICATION FOR GRANT OF REGISTRA TION WAS MADE ON 1.6.2012. IT IS THE SAY OF THE LD. COUNSEL THAT SI NCE THE ASSESSEE TRUST IS AT ITS NASCENT STAGE THEREFORE, IT IS INCORRECT TO SAY THAT THE TRUST HAS NOT CARRIED OUT ANY ACTIVITY. THE LD. COUNSEL FURTHER C ONTENDED THAT THE ITA NO.606/M/2013 3 DIT(EXEMPTION) HAS NOT TAKEN ANY ADVERSE VIEW ON T HE OBJECTS OF THE TRUST BUT HAS REJECTED THE CLAIM MERELY BECAUSE THE RE WAS NO ACTIVITY CARRIED OUT BY THE TRUST. THE REASONS FOR REJECTING THE APPLICATION ARE AGAINST THE FACTS OF THE CASE THEREFORE THE REGISTR ATION SHOULD BE GRANTED. 5. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SUPPORTED THE FINDINGS OF THE DIT(EXEMPTION) . 6. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE DIT( EXEMPTION) VIS- -VIS MATERIAL FACTS RELATING TO THE CREATION OF TR UST, THE DEED OF ITS REGISTRATION AND THE DATE OF APPLICATION. ADMITTED LY, THE TRUST WAS CREATED ON 21.7.2011 REGISTERED WITH THE CHARITY COMMISSION ER ON 8.12.2011 AND THE APPLICATION WAS MADE ON 1.6.2012 I.E. WITHIN 5 MONTHS FROM THE DATE OF REGISTRATION WITH THE CHARITY COMMISSIONER. IN OUR CONSIDERED VIEW, THE DECISION OF THE DIT(EXEMPTION) IS PRE-MATURE INASMUCH AS IT WOULD BE HARSH AGAINST A NEWLY REGISTERED TRUST TO DENY R EGISTRATION U/S. 12A BY JUST GLANCING THROUGH THE ACTIVITIES OF THE TRUST O F A VERY SHORT PERIOD. SINCE THE TRUST WAS FORMED IN JULY, 2011 ONE CANNOT EXPECT TO CARRY OUT CHARITABLE ACTIVITY IMMEDIATELY AND THE DIT(EXEMPTI ON) HAS NOT GIVEN ANY CATEGORICAL FINDING THAT THE TRUST WAS NOT INTE NDING TO DO ANY CHARITABLE ACTIVITY. IN SUCH A SITUATION, IN OUR H UMBLE OPINION THE OBJECTS OF THE TRUST HAVE TO BE TAKEN INTO CONSIDERATION BY THE AUTHORITY. ACTIVITIES OF THE TRUST CAN BE CONSIDERED IF THE RE GISTRATION IS SOUGHT AFTER A LONG GAP FROM THE FORMATION OF THE TRUST. CONSIDER ING THE FACTS IN TOTALITY, IN OUR CONSIDERED VIEW, THE TRUST DESERVES REGISTRA TION. WE, ACCORDINGLY DIRECT THE DIT(EXEMPTION) TO ALLOW REGISTRATION T O THE ASSESSEE TRUST U/S. 12A OF THE ACT ON PECULIAR FACTS OF THE CASE. ITA NO.606/M/2013 4 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 20.11.2013 . !4 / 3( &! 5 6 7 20.11.20133 / = SD/- SD/- ( VIJAY PAL RAO ) ( N.K. BILLAIYA ) /JUDICIAL MEMBER !& / ACCOUNTANT MEMBER MUMBAI; 6 DATED 20/11/2013 . . ./ RJ , SR. PS !4 / ,0 >!(0 !4 / ,0 >!(0 !4 / ,0 >!(0 !4 / ,0 >!(0 / COPY OF THE ORDER FORWARDED TO : 1. )+ / THE APPELLANT 2. ,-)+ / THE RESPONDENT. 3. ? ( ) / THE CIT(A)- 4. ? / CIT 5. @= ,0 , , / DR, ITAT, MUMBAI 6. =A B / GUARD FILE. !4 !4 !4 !4 / BY ORDER, -0 ,0 //TRUE COPY// C CC C / D D D D (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI