RADHAKRISHNA SANWARMAL PANSARI CHARITABLE TRUST, MUMBAI V. D.I.T. (EXEMPTION), MUMBAI

ITA 6311/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. 631 1 /M/12 ASSESSMENT YEAR: 2012 - 13 M/S. SHRI RADHAKRISHNA SANWARMAL PANSARI CHARITABLE TRUST, 10 2, GAURESH APARTMENT , OLD POLICE LANE, AGARKAR CHOWK, ANDHERI E AST , MUMBAI 400 06 9 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) ASSESSEE 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 H AS BEEN PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE DIT (EXEMPTIONS) DATED 2 6 .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 H AS SUBMITTED THAT THE REGISTRATION HAS BEEN REFUSED 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 CHA RITABLE PURPOSES AS A RESULT GENUINENESS OF THE ACTIVITIES CANNOT BE VERIFIED. ITA NO .6 31 1 /M/12 M/S. SHRI RADHAKRISHNA SANWARMAL PANSARI CHARITABLE 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 APPE LLANT 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 OF 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 P URPOSES CAME INTO CONSIDERATION OF THE DELHI BENCH 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 TH E STAGE OF COMMENCEMENT IS NOT RELEVANT TO DECIDE 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 ACTIVITIES 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 GRA NT/NON - GRANT OF REGISTRATION WOULD BE FOR THE CIT 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 COURT IN DIT VS FOUNDATION OF OPHTHALMIC & OPTOMETRY RESEARCH EDUCATION CENTRE [2012] ITA NO .6 31 1 /M/12 M/S. SHRI RADHAKRISHNA SANWARMAL PANSARI CHARITABLE 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 FOLLO WING 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 AC T 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 I S HERE BY ALLOWED. ORDER PRONOUNCED IN THE OPEN 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.