KRISHNAMURTI EDUCATION TRUST, MUMBAI V. DIT (E), MUMBAI

ITA 6377/MUM/2012

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0204 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 04-07-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 18-10-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B SRINIWAS
• Keywords: Charitable institution
• Section: 12A; 12AA

Judgement Text

IN THE INC OME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI BEFORE SHRI R. C. SHARMA , AM & SHRI SANDEEP GOSAIN, JM ./ I.T.A. NO . 6377 /MUM/201 2 , ( / ASSESSMENT YEAR: 2012 - 13 ) K RISHNAMURTI EDUCATION TRUST D - 1/64/602 MIG COLONY, BANDRA (E), MUMBAI - 400051 . / VS. DIT (E) 6 TH FLOOR, PIRAMAL CHAMBERS, PAREL, LALBAUG, MUMBAI - 400012 ./ ./ PAN/GIR NO. A A BTK8854F ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : NONE / RESPONDENTBY : SH. B. SRINIWAS / DATE OF HEARING : 07 /0 2 /201 8 / DATE OF PRONOUNCEMENT : 21/02/2018 / O R D E R PER SANDEEP GOSAIN, J UDICIAL MEMBER : THE P RESENT APPE AL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF DIRECTOR OF INCOME TAX (EXEMPTION) MUMBAI DATED 28.09.12 O N THE GROUNDS MENTIONED HEREIN BELOW: - 2 I.T.A. NO. 6377 /MUM/201 2 KRISHNAMURTI EDUCATION TRUST I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED D.L.T.(E)ERRED IN NOT GRANTING REGISTRATION U/S. 12AA R.W.RULE 17A OF THE INCOME TAX ACT 1961 & RULES 1962 RESPECTIVELY. II) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED D.L.T.(E) ERRED IN HOLDING THAT THE OBJECTS OF THE TRUST LACK BINDING LEGAL OBLIGATION ON TRUSTEES IN REGARDS T O THE APPLICATION OF INCOME. III) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED D.L.T.(E) ERRED IN HOLDING THAT THE TRUST IS NOT A GENUINE CHARITABLE TRUST. IV) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE L EARNED D.L.T.(E) ERRED IN HOLDING THAT THE OBJECTS OF THE TRUST ARE OF COMMERCIAL NATURE AND THEREBY THE APPELLANT TRUST IS NOT ENTITLED TO REGISTRATION. V) THE APPELLANT CRAVES, LEAVE TO ADD, ALTER, AMEND OR DELETE ANY GROUND(S) OF APPEAL EITHER BEFORE OR DURING THE COURSE OF HEARING OF THE APPEAL. 3 I.T.A. NO. 6377 /MUM/201 2 KRISHNAMURTI EDUCATION TRUST 2 . AT THE VERY OUTSET, IT IS NOTICED THAT NONE HAS APPEARED ON BEHALF OF ASSESSEE IN SPITE OF SEVERAL CALLS AND EVEN NO APPLICATION FOR ADJOURNMENT WAS MOVED . ON THE OTHER HAND L D. DR IS PRESENT IN THE COURT AND IS READY WITH ARGUMENTS. THEREFORE WE HAVE DECIDED TO PROCEED WITH THE HEARING OF THE CASE EX - PA RTE WITH THE ASSISTANCE OF THE L D. DR AND THE MATERIAL PLACED ON RECORD. 3. AS PER THE FACTS OF THE PRESENT CASE, THE ASSESSEE TRUST HAS BEEN CONSTITUTED BY A MEMORANDUM OF ASSOCIATION DATED 01.03.2011 AND THE SAME HAS BEEN REGISTERED WITH THE CHARITY COMMISSIONER, MUMBAI ON 12.03.2012. THE ASSESSEE FILED AN APPLICATION FOR REGISTRATION U/S 12A OF THE I.T. ACT 1961 AND THE LD. DIT(E) SOUGHT DETAILS /DOCUMEN TS FOR VERIFICATION VIDE NOTICE DATED 11.06.12 AND PASSED IMPUGNED ORDER THEREBY REJECTING THE APPLICATION FILED BY THE APPELLANT FOR GRANT OF REGISTRATION. 4 I.T.A. NO. 6377 /MUM/201 2 KRISHNAMURTI EDUCATION TRUST AGGRIEVED BY THE ORDER OF AO, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) AND LD. CIT(A) AFTER CONSIDERING THE CASE OF BOTH THE PARTIES DISMISSED THE APPEAL OF THE ASSESSEE. NOW BEFORE US, THE ASSESSEE HAS PREFERRED THE APPEAL BY RAISING THE ABOVE GROUNDS. GROUND NO. (I) TO (IV) 4 . THESE GROUND RAISED BY THE ASSESSEE ARE INTER CONNECTED AND INTER RELATED AND RELATES TO CHALLENGING THE ORDER OF LD. DIT(E ) IN NOT GRANTING REGISTRATION U/S. 12AA R.W.RULE 17A OF THE INCOME TAX ACT 1961 & RULES 1962 RESPECTIVELY , THEREFORE WE THOUGHT IS FIT TO DISPOSE OF BY THIS COMMON ORD ER. 5. WE HAVE HEARD LD. DR AND WE HAVE ALSO PERUSED THE MATERIAL PLACED ON RECORD AS WELL AS THE ORDERS PASSED BY REVENUE AUTHORITIES. BEFORE WE DECIDE THE MERITS OF THE CASE, IT IS NECESSARY TO EVALU ATE THE ORDERS PASSED BY LD. DIT(E). THE LD. DIT(E ) HAS DEALT WITH THE ABOVE GROU NDS RAISE D BY THE ASSESSEE IN ITS DETAILED ORDER. THE OPERATIV E PORTION OF THE ORDER OF LD. DIT(E ) IS 5 I.T.A. NO. 6377 /MUM/201 2 KRISHNAMURTI EDUCATION TRUST CON T AINE D IN PARA NO. 3 OF ITS ORDER AND THE SAME IS REPRODUCED BELOW: - 3.. AS PER THE PROVISIONS OF SECTION 12AA(1)(B), A TRUST IS TO BE GRANTED REGISTRATION IF THE COMMI SSIONER IS SATISFIED ABOUT THE OBJECTS OF THE TRUST AND THE GENUNIENESS OF ITS ACTIVITIES. BOTH THESE REQUIREMENTS ARE CUMULATIVE AND NOT ALTERNATIVE. ALTHOUGH THE APPLICANT TRUST HAS FILED ACOPY OF CERTIFICA TE OF REGISTRATION ISSUED BY THE CHARITY COMMISSIONER, THE SAME, THOUGH RELEVANT, CANNOT BE TREATED AS CONCLUSIVE PROOF OF THE FACT THAT THE TRUST HAS BEEN CREATED FOR 'CHARITABLEPURPOSE' AS DEFINED UNDER SECTION 2(15) OF THE ACT. A PERUSAL OF THE TRUST DE ED REVEALS THAT THEAPPLICANT TRUST HAS CHARITABLE AS WELL AS NON - CHARITABLE/ BUSINESS OBJECTS SUCH AS TO PROVISION OFCONSULTATION SERVICES TO OUTSIDE AGENCIES FOR EDUCATIONAL MATTERS. IT IS ALSO OBSERVED THAT SOMEOF ITS OBJECTS ARE VAGUE AND HIGHLY PHILOSO PHICAL SUCH AS CARRYING OUT STUDY AND RESEARCH IN HUMAN BEING'S RELATIONSHIP TO NATURE, COSMOS AND TO SELF WITH A VIEW TO UNDERSTANDING AND REALIZATION OF HUMAN POTENTIAL IN SPIRITUAL AND RATIONAL LIVING, PROMOTING UNIVERSAL FEES THROUGH THE UNDERSTANDING AND TRANSFORMATION OF HUMAN RELATIONSHIP AND PROVISION OF FACILITIES FOR RELIGIOUS AND CREATIVE LIVING. IT IS FURTHER OBSERVED THAT 6 I.T.A. NO. 6377 /MUM/201 2 KRISHNAMURTI EDUCATION TRUST UNDER CLAUSE 22 OF THE RULES AND REGULGTION, THE FUNDS OF THE AL - .R. - 0.ICANT A - E TO HE !ISED FOR THE FULFILLMENT OF THE OBJE CT!, AS SPECIFIED IN THE MOA. THUS, THERE IS NO BINDING LEGAL OBLIGATION ON THE TRUSTEES TO UTILIZE THE TRUST FUND AND INCOME SOLELY FOR CHARITABLE PURPOSES. IN THIS CONNECTION, VIDE ORDER SHEET NOTING DATED 21.09.2012, THE AR WAS REQUESTED TO SHOW - CAUSE A S TO HOW THESE OBJECTS ARE CHARITABLE U/S.2(15). IN RESPONSE, THE APPLICANT FURNISHED ITS EXPLANATION VIDE LETTER DATED 25.09.2012 STATING THAT ITS OBJECTS ARE NOT COMMERCIAL AND ARE COVERED WITHIN THE MEANING OF SECTION 2(15) OF THE ACT. THE SUBMISSIONS O F THE APPLICANT HAVE BEEN CONSIDERED CAREFULLY, BUT THE SAME ARE CRITERIA FOR A VALID TRUST. FOR THE TRUST TO BE ACCEPTED AS CHARITABLE TRUST FOR PURPOSES OF EXEMPTION, IT IS ALL THE MORE NECESSARY THAT THE OBJECTS SHOULD BE SPECIFIC AND NOT VAGUE SO AS TO CONFORM TO THE REQUIREMENT OF INCOME TAX LAW IN THIS REGARD. AFTER HAVING GONE THROUGH THE FACTS OF THE PRESENT CASE AS WELL AS CONSIDERING THE ORDERS PASSED BY REVENUE AUTHORITIES AND SUBMISSIONS MADE BY LD. DR, WE FIND THAT LD . CIT(A) HAS CORRECTLY DE CIDED THIS GROUND OF APPEAL RAISED BY THE ASSESSEE ON MERITS. MOREOVER, N O NEW FACTS OR CONTRARY JUDGMENTS HAVE BEEN 7 I.T.A. NO. 6377 /MUM/201 2 KRISHNAMURTI EDUCATION TRUST BROUGHT ON RECORD BEFORE US I N ORDER TO CONTROVERT OR REBUT THE FINDINGS SO RECORDED BY LD DIT(E) . THEREFORE, THERE ARE NO REASON S FOR US TO INTERFERE INTO OR DEVIATE FROM THE FINDINGS RECORDED BY THE LD. DIT(E). HENCE , WE ARE OF THE CONSIDERED VIEW THAT THE FINDINGS SO RECORDED BY THE LD. CIT (A) ARE JUDICIOUS AND ARE WE LL REASONED. RESULTANTLY, THESE GROUND RAISED BY THE ASSESSEE STANDS DISMI SSED . GROUND NO. (V) 6 . THIS GROUND IS GENERAL IN NATURE, THUS REQUIRES NO SPECIFIC ADJUDICATION. 7 . IN THE NET RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21ST FEB 2018. SD/ - SD/ - (R.C. SHARMA ) (SANDEEP GOSAIN) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 21 . 02 .201 8 SR.PS . DHANANJAY 8 I.T.A. NO. 6377 /MUM/201 2 KRISHNAMURTI EDUCATION TRUST / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F I LE / BY ORDER, . / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI