Shri Divyasai Education & Chari. Trust, RAJKOT-GUJARAT V. The Commr. of Income Tax-1, RAJKOT-GUJARAT

ITA 614/RJT/2014

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9520 (ITAT-RAJKOT)
• Duration Of Justice: 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 30-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M L MEENA CIT DR
• Keywords: Gift; Charitable institution

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBULAL, RAJKOT BENCH: RAJKOT .., ! ' #, $ % BEFORE SHRI N.S.SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER &./ I.T.A. NO.614/RJT/2014 ( / ASSESSMENT YEAR : - ) SHRI DIVYASAI EDUCATION AND CHARITABLE TRUST AUM, 4 AFRIKA COLONY OPP. RAIYA TELEPHONE EXCHANGE 150 FT. RING ROAD RAJKOT / VS. THE COMMISSIONER OF INCOME TAX RAJKOT-1 RAJKOT ( & ./ ) & ./ PAN/GIR NO. : AAJTS 8642 K ( (* / APPELLANT ) .. ( +,(* / RESPONDENT ) (* - / APPELLANT BY : SHRI DARSHAK THAKKAR, C.A. +,(* . - / RESPONDENT BY : SHRI M.L. MEENA, CIT-D.R. ! / 0 . # / DATE OF HEARING 17/02/2015 12 . # / DATE OF PRONOUNCEMENT 18/02/2015 3 / O R D E R PER BENCH : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD.COMMISSIONER OF INCOME TAX, RAJKOT-I (CIT IN SHORT) DATED 26/09/2014. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX, RAJKOT-1, RAJKOT, HAS ERRED IN LAW AND ON FACTS IN REFUSING TO GRANT REGISTRATION U/S.12AA ITA NO.614/RJT/2014 SHRI DIVYASAI EDUCATION AND CHARITABLE TRUST VS. CIT - 2 - OF THE INCOME TAX ACT, 1961 READ WITH RULE 17A OF THE INCOME TAX RULES, 1962. 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX, RAJKOT-I, RAJKOT, OUGHT TO HAVE GRANTED REGISTRATION U/S.12AA OF THE INCOME TAX ACT, 1961 LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. WITHOUT PREJUDICE TO THE ABOVE, IT IS SUBMITTED THAT THERE IS NO REQUIREMENT IN THE INCOME TAX ACT, 1961 AND THE INCOME TAX RULES, 1962, TO HAVE STIPULATION OF RESTRICTION ON DONATION TO ANY OTHER INSTITUTION OR ORGANIZATION. 4. THE APPELLANT CRAVES LEAVE TO ADD AND/OR TO AMEND AND/OR TO DELETE THE GROUND OF APPEAL UPTO AND AT THE TIME OF HEARING OF APPEAL. 2. BRIEFLY STATED FACTS ARE THAT THE ASSESSE E IS AGGRIEVED BY THE ORDER OF THE LD.CIT DECLINING TO GRANT THE REGISTRATION U /S.12AA OF THE ACT. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD.C IT HAS DECLINED REGISTRATION ON THE GROUND THAT ONE OF THE OBJECTS OF THE ASSESSEE, NAMELY CLAUSE-5(19) OF THE TRUST-DEED ENVISAGES THAT THE T RUST SHALL PROVIDE DONATION, GIFT, GRANT, SUBSIDY OR ANY OTHER SUPPORT TO ANY ORGANIZATIONS, OR CHARITABLE TRUST. HE SUBMITTED THAT THE LD.CIT HAS NOT FOUND FAULT WITH OTHER CLAUSES IN THE TRUST-DEED. HE SUBMITTED THAT THIS CLAUSE, I.E. 5(19) RELATES TO APPLICATION OF THE FUND WHICH CAN BE SEE N AT THE TIME OF ASSESSMENT NOT AT THE TIME OF REGISTRATION. 3. ON THE CONTRARY, LD.CIT-DR SUPPORTED THE ORDER O F THE LD.CIT. HE SUBMITTED THAT AS PER THE PROVISIONS OF SECTION 12 AA OF THE I.T.ACT, 1961, THE CIT HAS TO MAKE ENQUIRY WITH REGARD TO TH E GENUINENESS OF THE ACTIVITIES. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDER OF T HE LD.CIT. THERE IS NO ITA NO.614/RJT/2014 SHRI DIVYASAI EDUCATION AND CHARITABLE TRUST VS. CIT - 3 - DISPUTE WITH REGARD TO THE FACT THAT BEFORE GRANTIN G REGISTRATION, THE CIT IS EMPOWERED TO CALL FOR SUCH DOCUMENTS OR INFORMATION FROM THE TRUST OR INSTITUTION AS HE THINKS NECESSARY IN ORDER TO SA TISFY HIMSELF ABOUT THE GENUINENESS OF THE ACTIVITIES OF THE TRUST OR INSTI TUTION AND MAY ALSO MAKE SUCH INQUIRIES AS HE MAY DEEM NECESSARY IN THIS BEH ALF. IN THE CASE IN HAND, THE LD.CIT HAS DECLINED ON THE GROUND THAT ON E OF THE OBJECTS AS PRESCRIBED IN CLAUSE-5(19) OF THE TRUST-DEED, THE T RUST SHALL PROVIDE DONATION, GIFT, GRANT, SUBSIDY OR ANY OTHER SUPPORT TO ANY ORGANIZATION OR CHARITABLE ORGANIZATION, TRUST, ASSOCIATION, SOCIAL ORGANIZATIONS, WHICH ARE ABSOLUTELY NON-POLITICAL AND HAVING CHARITABLE OBJE CTS ONLY OF WORKING FOR THE WELFARE OF THE SOCIETY AND WHICH ARE NON-PROFIT ABLE AND WHICH HAVE DECLARED THEMSELVES UNDER THE INCOME TAX LAWS. THE LD.CIT OBSERVED THAT AS PER THE SCHEME OF THE ACT, THE INCOME FROM TRUST PROPERTY MUST BE APPLIED FOR THE OBJECT FOR WHICH THE TRUST HAD BEEN CREATED. HE FURTHER OBSERVED THAT GIVING DONATION TO ANY OTHER ORGANIZA TION CANNOT BE TERMED AS CHARITABLE ACTIVITY. IN OUR CONSIDERED VIEW, TH E ABOVE FINDING OF THE LD.CIT IS NOT JUSTIFIED AS AT THE TIME OF THE REGIS TRATION THE COMMISSIONER HAS TO SATISFY ABOUT THE OBJECTS OF THE TRUST/INSTI TUTION AND GENUINENESS OF THE ACTIVITIES. AS PER TRUST-DEED, THE ASSESSEE HA S TWENTY-TWO (22) OBJECTS. OUT OF 22 OBJECTS, THE LD.CIT HAS DOUBTED IN RESPECT OF THE OBJECT MENTIONED IN CLAUSE-5(19) OF THE TRUST-DEED WHICH RELATES TO PROVIDING DONATION, GIFT, GRANT, SUBSIDY OR ANY OTH ER SUPPORT TO ANY ORGANIZATION OR CHARITABLE ORGANIZATION, TRUST, ASS OCIATION, SOCIAL ORGANIZATIONS, ETC. THAT FALLS UNDER THE APPLICATIO N OF THE FUNDS OF THE TRUST. APPLICATION OF THE FUNDS CAN BE EXAMINED AT THE TIME OF ASSESSMENT. THEREFORE, AFTER CONSIDERING THE TOTAL ITY OF THE FACTS OF THE ITA NO.614/RJT/2014 SHRI DIVYASAI EDUCATION AND CHARITABLE TRUST VS. CIT - 4 - CASE, WE HEREBY DIRECT THE LD.CIT TO GRANT REGISTRA TION AS REQUESTED BY THE ASSESSEE. THUS, GROUNDS RAISED IN THE ASSESSEES A PPEAL ARE ALLOWED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE COURT ON WEDNESDAY, THE 18 TH DAY OF FEBRUARY, 2015 AT RAJKOT. SD/- SD/- ( .. ) ( ! ' #) $ ( N.S. SAINI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER RAJKOT; DATED 18 / 02 /2015 .. , /.$../ T.C. NAIR, SR. PS / COPY OF THE ORDER FORWARDED TO : 1. (* / THE APPELLANT 2. +,(* / THE RESPONDENT. 3. &6& # ! 7# / CONCERNED CIT 4. ! 7# ( ) / THE CIT(A)-I, RAJKOT 5. 9/' : +$#$ , , /DR,ITAT, RAJKOT 6. : EF G 0 / GUARD FILE. / BY ORDER, , 9# +$# //TRUE COPY// !/ '# $% ( DY./ASSTT.REGISTRAR) # %&# ' , / ITAT, RAJKOT 1. DATE OF DICTATION .. 17.2.15 (DICTATION-PAD 6-P AGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 17.2.15 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BAC K TO THE SR.P.S./P.S.18.2.15 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 18.2.15 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK.. . 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER