Shree Vanchhara Tirthadhipati Chintamani Parswaprabhu Trust, Ahmedabad V. The ADIT(Exemp), Ahmedabad

ITA 610/AHD/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 67769 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-10-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 26-09-2013
• Assessment Year: misc
• Appeal Filed On: 06-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution
• Section: 12A; 12AA

Judgement Text

ITA NO 610/ AHD/2013 . A.Y. N.A. 1 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD (BEFORE SHRI G.C.GUPTA VICE PRESIDENT & SHRI ANIL C HATURVEDI, A.M.) I.T. A. NO. 610/AHD/2013 (ASSESSMENT YEAR: N.A. SHREE VANCHHARA TIRTHADHIPATI- CHINTAMANI PARSWAPRWABHU TRUST, C/O, LAMBDA THERAPEUTIC RESEARCH LTD., PLOT NO. 138, LAMDA HOUSE, NR.SILVER OAK CLUB, GOTA, AHMEDABAD -380063 (APPELLANT) VS. THE ADIT(EXEMPTION), BHAVNAGAR. (RESPONDENT) PAN: AAKTS 1397 L APPELLANT BY : SHRI TUSHAR P. HEMANI A.R. RESPONDENT BY : SHRI SUBHASH BAINS.CIT D.R. ( )/ ORDER DATE OF HEARING : 26-09-201 3 DATE OF PRONOUNCEMENT : 11-10-2013 PER SHRI ANIL CHATURVEDI,A.M. 1. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF D.I.T(E), AHMEDABAD DATED 29.01.2013. 2. THE FACTS AS CULLED OUT FROM THE ORDERS OF LOWER AU THORITIES ARE AS UNDER. 3. ASSESSEE MADE AN APPLICATION FOR REGISTRATION OF TR UST UNDER SECTION 12A OF THE ACT BEFORE DIRECTOR OF INCOME-TAX(E). DIT(E) ON PERUSING THE TRUST ITA NO 610/ AHD/2013 . A.Y. N.A. 2 DEED OF THE ASSESSEE DIT(E) WAS OF THE VIEW THAT TH E DISSOLUTION CLAUSE WAS NOT PROPER. HE ALSO NOTICED THAT THE TRUSTEES HAD TAKEN UPON THEMSELVES ABSOLUTE DISCRETION TO AMALGAMATE THE TR UST WITH ANY OTHER TRUST. HE WAS OF THE VIEW THAT AS PER PROVISIONS O F SECTION 15A OF BOMBAY PUBLIC TRUST ACT, NO AMALGAMATION IS ALLOWED EXCEPT AS PER THE DISCRETION OF CHARITY COMMISSIONER. HE WAS FURTHER OF THE VIEW THAT AS PER THE PROCEDURE OF BOMBAY PUBLIC TRUST ACT, IN CA SE THE ACTIVITIES OF THE TRUST CANNOT BE CARRIED OUT, THE ASSETS HAVE TO BE TRANSFERRED TO ANOTHER TRUST CARRYING ON SIMILAR ACTIVITIES. IN THE CASE OF ASSESSEE, SINCE THERE WAS NO SUCH CLAUSE IN THE DEED, DIT(E) DENIED THE R EGISTRATION UNDER SECTION 12AA OF THE ACT. AGGRIEVED BY THE ORDER OF DIT(E), THE ASSESSEE IS NOW IN APPEAL BEFORE US. 4. BEFORE US, AT THE OUTSET, THE LD. A.R. SUBMITTED TH AT THE TRUST DEED INDEED CONTAINED A CLAUSE WHEREIN IT WAS STATED THAT ON CL OSURE OF THE TRUST, THE PROPERTY OF THE TRUST BE HANDED OVER TO OTHER INSTI TUTION HAVING SIMILAR OBJECTS BY PASSING NECESSARY RESOLUTION. HE POINTED OUT TO PARA 3 OF THE DIT(E) ORDER, WHERE THE RELEVANT CLAUSE OF ASSESSEE WAS REPRODUCED. HE FURTHER SUBMITTED AND PLACED RELIANCE ON THE DECISI ON IN THE CASE OF SHRI CHARGAM DASHA PORWAD MAHAMANDAL ITA NO. 337 & 338/A HD/2013. HE FURTHER SUBMITTED THAT SINCE THE FACTS OF THE CASE OF THE ASSESSEE ARE IDENTICAL TO THAT OF CASE OF SHRI CHARAGAM DASHA PO RWAD MAHAMANDAL (SUPRA), THE MATTER BE DECIDED IN FAVOUR OF THE ASS ESSEE. THE LD. D.R. ON THE OTHER HAND SUPPORTED THE ORDER OF DIT(E). 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT DIT(E) REFUSED THE REGISTRATION TO THE TRUST FOR THE REASON ITA NO 610/ AHD/2013 . A.Y. N.A. 3 THAT THERE WAS NO CLAUSE WITH RESPECT TO TRANSFERRI NG THE ASSETS. WE FIND THAT ON IDENTICAL ISSUE IN THE CASE OF SHRI CHARGAM DASHA PORWAD MAHAMANDAL ITA NO. 337 & 338/AHD/2013 ORDER DATED 0 3.05.2013 ON IDENTICAL FACTS, THE ISSUE HAS BEEN DECIDED IN FAVO UR OF THE ASSESSEE BY THE CO-ORDINATE BENCH BY HOLDING AS UNDER:- 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFULLY AND PERUSED THE ORDERS OF THE DIT(EXEMPTIONS) AS WELL AS THE DECISION OF THE IT A T DELHI IN THE CASE OF SHRI SAI SAMARPAN TRUST CO.(SUPRA). WE FIND THAT THE ONLY RE ASON ADVANCED FOR REFUSING THE REGISTRATION U/S.12AA AND 80G(5) OF THE ACT BY THE DIT(EXEMPTIONS) IS THAT THERE IS NO DISSOLUTION CLAUSE IN THE TRUST-DEED AN D TRUST DOES NOT HAVE ANY CLAUSE THAT THE TRUST WILL NOT BE DISSOLVED AND IT IS A PE RPETUAL TRUST. THIS ISSUE OF REFUSING REGISTRATION IN THE ABSENCE OF DISSOLUTION CLAUSE I N THE TRUST-DEED IS COVERED IN FAVOUR OF THE ASSESSEE WITH THE DECISION OF CO-ORDI NATE BENCH OF DELHI TRIBUNAL IN THE CASE OF SHRI SAI SAMARPAN TRUST CO.(SUPRA), WHE REIN IN PARAGRAPH NO.8 HELD THAT WHEN THE ASSESSEE- TRUST IS REGISTERED WITH TH E SUB-REGISTRAR AS A CHARITABLE TRUST, IN THE EVENT OF FAILURE OF THE TRUST THE NET ASSETS/INCOME WOULD OBVIOUSLY BE TAKEN OVER BY THE CHARITY COMMISSIONER AND THE REJE CTION OF REGISTRATION ON THIS GROUND WAS HELD NOT ON A SOUND FOOTING AND THE ORDE RS OF THE DIT(EXEMPTIONS) WERE REVERSED. WE FIND THAT THE CASE OF THE ASSESSE E IS ON MORE SOUND FOOTING SINCE IT HAS ALREADY APPLIED TO THE CHARITY COMMISS IONER FOR AMENDMENT OF THE TRUST-DEED VIDE APPLICATION SUBMITTED ON 26/02/2013 , WHEREBY INSERTING THE DISSOLUTION CLAUSE PROVIDING THAT THE TRUST SHALL B E IRREVOCABLE AND IN THE MOST UNLIKELY SITUATION, IF TRUST PRACTICALLY STOPS FUNC TIONING, IT CAN ONLY BE MERGED/AMALGAMATED WITH OTHER ONE OR MORE PUBLIC CH ARITABLE TRUSTS OR BODIES HAVING SIMILAR OBJECTS SUBJECT TO THE APPROVAL OF T HE OFFICE OF THE PUBLIC CHARITY COMMISSIONER, ETC. NO OTHER MATERIAL HAS BEEN PRODU CED ON BEHALF OF THE REVENUE BEFORE US TO SUGGEST THAT THE AIMS AND OBJE CTS OF THE TRUST ARE NOT CHARITABLE IN NATURE. IN THESE FACTS OF THE CASE, WE HOLD THAT THERE IS NO JUSTIFICATION FOR REFUSING THE REGISTRATION U/S.12A A AND 80G(5) OF THE ACT TO THE ASSESSEE, WHICH IS ACCORDINGLY ALLOWED TO THE ASSES SEE AND THE ORDERS OF THE DIT(EXEMPTIONS) IN BOTH THE CASES ARE REVERSED AND WE DIRECT THE DIT(EXEMPTIONS) TO GRANT THE REGISTRATION U/S.12AA & 80G(5) OF THE ACT TO THE ASSESSEE IN BOTH THE CASES AND THE GROUND(S) RAISED IN BOTH THE APPEALS ARE HEREBY ALLOWED. 6. SINCE THE FACTS OF THE CASE OF THE ASSESSEE ARE IDE NTICAL TO THAT OF SHRI CHARGAM DASHA PORWAD MAHAMANDAL (SUPRA), WE FOR SIM ILAR REASONS GIVEN IN ITA NOS. 337 & 338/AHD/2013, DIRECT DIT(E) TO GRANT ITA NO 610/ AHD/2013 . A.Y. N.A. 4 REGISTRATION U/S. 12AA TO THE ASSESSEE. THUS THIS G ROUND OF ASSESSEE IS ALLOWED. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN OPEN COURT ON 11 -10 - 2013. SD/- SD/- (G.C.GUPTA) (ANIL CHATURVEDI) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT, AHMEDABAD