RAMGARH HOSPITAL TRUST, MUMBAI V. D.I.T. (EXEMPTION), MUMBAI

ITA 6310/MUM/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 71930 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 15-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: LALCHAND CHOUDHARY
• Keywords: Charitable institution
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH D , MUMBAI BEFORE SHRI D. KARUNAKARA RAO , ACCOUNTANT MEMBER AND SHRI SANJAY GARG , JUDICIAL MEMBER ITA NO. 6310/M/12 ASSESSMENT YEAR: 2012 - 13 M/S. RAMGARH HOSPITAL TRUST, 102, DHANTHAK PLAZA, MAKWANA MAR OL ROAD, ANDHERI EAST, MUMBAI 400 059 PAN: AABTR6237P VS. THE DIRECTORATE OF INCOME TAX (EXEMPTION), ROOM NO.616, 6 TH FLOOR, PIRAMAL CHAMBERS, PAREL, MUMBAI 400 0 1 2 (APPELLANT) (RESPONDENT) ASSE SSEE BY : SHRI LALCHAND CHOUDHARY, A.R. REVENUE BY : SHRI SANTOSH KUMAR, D.R. DATE OF HEARING : 16.12.13 DATE OF PRONOUNCEMENT : 16.12.13 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAINST THE O RDER OF THE DIT (EXEMPTIONS) DATED 27.09.2012 REFUSING THE REGISTRATION U/S.12AA OF THE INCOME TAX ACT, 1961 READ WITH RULE 17 A OF INCOME TAX RULES TO THE ASSESSEE - TRUST. 2. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE REGISTRATION HAS BEEN REF USED U/S.12AA OF THE ACT BY THE DIT(EXEMPTIONS) ON THE GROUND T HAT THE TRUST HAS NOT BEEN ABLE TO BRING ANY EVIDENCE ON RECORD TO ESTABLISH THAT ANY ACTIVITY OF THE TRUST/ASSOCIATION HAS BEEN TAKEN FOR THE CHARITABLE PURPOSES AS A RESULT GENUINENESS OF THE ACTIVITIES CANNOT BE VERIFIED. ITA NO .6310/M/12 M/ S. RAMGARH HOSPITAL TRUST 2 3 . THE LD. AR OF THE ASSESSEE HAS CONTENDED THAT OBJECTIVES OF THE APPELLANT - TRUST ARE CHARITABLE IN NATURE AND FURTHER THAT FOR A NEWLY CREATED/ESTABLISHED TRUST LIKE THE APPELLANT ONE SHOULD NOT EXPECT THAT THE ACTIVITIES WILL BEGIN IMMEDIATELY. BY AND LARGE THE ACTIVITIES SHALL COMMENCE AFTER THE GRANT OF REGISTRATION UNDER SECTION 12AA AND EXEMPTION UNDER SECTION 80G(5)(VI). HE HAS FURTHER SUBMITTED THAT THE APPELLANT TRUST IS A NEWLY FORMED TRUST AND THE CARRYING OUT O F CHARITABLE ACTIVITIES AT COMMENCEMENT STAGE ARE NOT RELEVANT FOR GRANT OF REGISTRATION. THE LD. DR HAS OPPOSED THE SUBMISSION OF THE LD. AR FOR THE ASSESSEE AND HAS RELIED ON THE ORDERS OF THE DIT(EXEMPTIONS). 4 . WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE LD. REPRESENTATIVES OF THE PARTIES. THE ISSUE THAT THE TRUST HAS NOT BEEN ABLE TO BRING ANY EVIDENCE ON RECORD TO ESTABLISH THAT ANY ACTIVITY OF THE TRUST/ASSOCIATION HAS BEEN TAKEN FOR THE CHARITABLE PURPOSES CAME INTO CONSIDERATION OF THE DELHI BE NCH OF THE TRIBUNAL , IN THE CASE OF DHARMA SANSTHAPAK SANGH (NIYAS) VS. CIT (2008) 118 TTJ (DEL) 823 : (2008) 13 DTR (DEL) (TRIB) 589; WHEREIN IT HAS BEEN HELD THAT CARRYING ON OF CHARITABLE ACTIVITY, AT THE STAGE OF COMMENCEMENT IS NOT RELEVANT TO DECI DE WHETHER SUCH TRUST/INSTITUTION IS ENTITLED FOR REGISTRATION. AGAIN IN THE CASE OF SARDARI LAL OBERAI MEMORIAL CHARITABLE TRUST VS. ITO (2005) 3 SOT 229 (DEL), THE DELHI BENCH OF THE TRIBUNAL HAS HELD THAT SECTION 12AA TAKES CARE OF A SITUATION WHERE A CTIVITIES HAVE BEEN CARRIED OUT BY A TRUST WHEREAS IT DOES NOT LAY DOWN ANYTHING NEGATIVE IN CASES WHERE NO ACTIVITIES HAVE BEEN CARRIED OUT, LIKE IN THE INSTANT CASE. IN SUCH A CASE, THE SOLE CRITERION OF GRANT/NON - GRANT OF REGISTRATION WOULD BE FOR THE C IT TO SEE THE OBJECTS OF THE TRUST. IF THE OBJECTS OF THE TRUST ARE CHARITABLE, THE FACT THAT NO ACTIVITY HAS BEEN CARRIED OUT BY THE TRUST, DOES NOT ENTITLE THE CIT TO HOLD THAT THE TRUST IS NOT ENTITLED TO REGISTRATION . EVEN THE HONBLE DELHI HIGH COUR T IN DIT VS FOUNDATION OF OPHTHALMIC & OPTOMETRY RESEARCH EDUCATION CENTRE [2012] ITA NO .6310/M/12 M/ S. RAMGARH HOSPITAL TRUST 3 25 TAXMANN.COM 376 (DELHI) , HAS HELD THAT THE PROVISIONS OF SECTI O N 12AA REVEAL THAT THE STATUTE DOES NOT PROHIBIT OR ENJOIN THE COMMISSIONER FROM REGISTERING TRUST SOLELY BASED ON ITS OBJECTS, WITHOUT ANY ACTIVITY, IN THE CASE OF A NEWLY REGISTERED TRUST. THE STATUTE DOES NOT PRESCRIBE A WAITING PERIOD, FOR A TRUST TO QUALIFY ITSELF FOR REGISTRATION. 5 . SO RESPECTFULLY FOLLOWING THE DECISION OF THE CO - ORDINATE BENCH ES OF THE TRIBUNAL AS WELL AS OF HONBLE DELHI HIGH COURT AND ALSO IN VIEW OF OUR ABOVE OBSERVATIONS , W E HOLD THAT THERE WAS NO JUSTIFICATION FOR THE DIT(EXEMPTIONS) FOR REFUSING THE REGISTRATION U/S.12AA OF THE ACT TO THE ASSESSEE, WHICH IS ACCORDINGLY ALLOWED TO THE ASSESSEE AND THE ORDERS OF THE DIT(EXEMPTIONS) ARE REVERSED . T HE DIT(EXEMPTIONS) HERE BY DIRECTED TO GRANT THE REGISTRATION U/S.12AA OF THE ACT TO THE ASSESSEE. 6 . IN THE RESULT APPEAL OF THE ASSESSEE IS HERE BY ALLOWED. ORDER PRONOUNCED IN THE OPE N COURT ON 16.12. 2013. SD/ - SD/ - ( D. KARUNAKARA RAO) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 16.12.13 * KISHORE COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT ( A) CONCERNED, MUMBAI THE DR C BENCH //TRUE COPY// [ BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.