Shri Jamnagar Gurjar Chhatriya Kadiya Gnati, JAMNAGAR V. The Commr. Of Income Tax, JAMNAGAR

ITA 641/RJT/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8583 (ITAT-RAJKOT)
• Duration Of Justice: 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 07-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M L MEENA
• Assessee Lawyers: J C RANPURA
• Keywords: Charitable institution; Opportunity of being heard; Bonafide belief
• Section: 12AA

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBULAL, RAJKOT BENCH: RAJKOT , !' # $ , # % BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER &./ I.T.A. NO.641/RJT/2014 ( FINANCIAL YEAR : 2013-14) SHRI JAMNAGAR GURJAR CHHATRIYA KADIYA GNATI VISHWAKARMA CHOWK, KADIAWAD, JAMNAGAR / VS. THE COMMISSIONER OF INCOME TAX JAMNAGAR #) !' & ./ * & ./ PAN/GIR NO. : AAATS 9852 J ( )+ / APPELLANT ) .. ( ,-)+ / RESPONDENT ) )+ . ! / APPELLANT BY : SHRI J.C. RANPURA, C.A. ,-)+ / . ! / RESPONDENT BY : SHRI M.L. MEENA, CIT-DR 0 / ' / DATE OF HEARING 03/12/2014 12 / ' / DATE OF PRONOUNCEMENT 05/12/2014 !3 / O R D E R PER SHRI KUL BHARAT, JUDICIAL MEMBER : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD.COMMISSIONER OF INCOME TAX-JAMNAGAR (CIT IN SHORT) DATED 31/10/2014. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1.0 THE GROUNDS OF APPEAL MENTIONED HEREUNDER ARE WITHOUT PREJUDICE TO ONE ANOTHER. 2.0 THE LEARNED COMMISSIONER OF INCOME TAX, JAMNAGAR [HEREINAFTER REFERRED TO AS THE CIT] ERRED ON FACTS AS ALSO IN LAW IN REJECT ING THE APPLICATION FOR REGISTRATION U/S.12AA OF THE ACT ON THE ALLEGED GROUND THAT THE TRUST DEED DOES NOT CONTAIN ANY CLAUSE REGARDING PROVISIONS IN THE EVENT OF ITS DISSOLUTION TO THE EFFECT THAT UPON THE DISSOLUTION, IF ANY PROPERTY/ASSETS REMAINS AFTER SATISFACTION OF I TS ITA NO.641/RJT/2014 SHRI JAMNAGAR GURJAR CHHATRIYA KADIYA GNATI VS. CIT-JAMNAGAR - 2 - DEBTS AND LIABILITIES, THE SAME SHALL BE TRANSFERRED TO THE TRUST HAVING SIMILAR OBJECTS. 2.1. THAT ON FACTS AS ALSO IN LAW THE LD.CIT OUGHT TO HAVE APPRECIATED THAT EVEN OTHERWISE A TRUST WHEN REGISTERED UNDER THE BOMBAY PUBLIC TRUST ACT, 1950, THE PROVISIONS OF THE SAID ACT ARE APPLICABLE TO THE TRUST IN THE EVENT OF DISSOLUTION. THE LD.CIT BE DIRECTED TO GRANT REGISTRATION. 3.0 THE LD.CIT HAS REJECTED THE APPELLANTS APPLICATION FOR REGISTRATION IS IN TOTAL DISREGARDS OF APPELLANTS SUBMISSION AND APPELLANTS RELIANCE ON JUDICIAL PRONOUNCEMENTS OF HONBLE ITAT, RAJKOT, AHMEDABAD AND DELHI WHEREIN IT HAS BEEN HELD THAT WHEN TRUST IS REGISTERED UNDER BOMBAY PUBLIC TRUST AS A CHARITABLE TRUST, IN THE EVENT OF FAILURE OF THE TRUST THE NET ASSETS/INCOME WOULD OBVIOUS LY BE TAKEN OVER BY THE CHARITY COMMISSIONER AND THE REGISTRATION WAS DIRECTED TO BE GRANTED. 4.0 THE LD.CIT HAS ALSO ERRED ON FACTS AS ALSO IN LAW IN DINING THE CLAIM OF EXEMPTION U/S.11 OF THE ACT ON THE ALLEGED GROUND THAT WITHOUT BEING APPELLANT TRUST REGISTERED U/S.12A(A) OF THE ACT EXEMPTION U/S.12A(A) NOT AVAILABLE TO APPELLANT TRUST. THE DENIAL OF CLAIM OF EXEMPTION U/S.11 IS TOTALLY UNJUSTIFIED ON FACTS AS ALSO IN LAW AND MAY KINDLY BE ALLOWED. 5.0 HOUR HONOURS APPELLANT CRAVES LEAVE TO ADD, TO AMEND, ALTER, OR WITHDRAW ANY OR MORE GROUNDS OF APPEAL ON OR BEFORE THE HEARING OF APPEAL. 2. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE-TRUS T MADE AN APPLICATION FOR REGISTRATION U/S.12A(A) OF THE ACT ON 25/03/201 3, WHICH WAS REJECTED BY THE LD.CIT VIDE HIS ORDER DATED 31/10/2014 AND T HE MATTER TRAVELLED UPTO THE HONBLE ITAT AND THE TRIBUNAL VIDE ORDER D ATED 29/05/2014 HAD RESTORED THE MATTER TO THE FILE OF LD.CIT. THE LD. CIT ONCE AGAINST REJECTED THE APPLICATION OF THE ASSESSEE. ITA NO.641/RJT/2014 SHRI JAMNAGAR GURJAR CHHATRIYA KADIYA GNATI VS. CIT-JAMNAGAR - 3 - 3. DURING THE COURSE OF HEARING, THE LD.COUNSEL F OR THE ASSESSEE SUBMITTED THAT THE LD.CIT FAILED TO TAKE NOTE OF TH E DECISION OF THE COORDINATE BENCH (ITAT RAJKOT BENCH) IN ITA NO.443/ RJT/2013 RENDERED IN THE CASE OF SHRI JAMNAGAR GURJAR CHHATR IYA KADIA GNATI VS. CIT, DATED 29/05/2014. 4. ON THE CONTRARY, LD.CIT-DR SUPPORTED THE ORDER O F THE LD.CIT AND SUBMITTED THAT THE ORDER OF THE LD.CIT IS JUSTIFIED . 5. WE HAVE HEARD THE PARTIES AND PERUSED THE MATERI AL AVAILABLE ON RECORD AND GONE THROUGH DECISION OF COORDINATE BENC H RENDERED IN THE CASE OF SHRI JAMNAGAR GURJAR CHHATRIYA KADIA GNATI VS. CIT, DATED 29/05/2014. WE FIND THAT THE LD.CIT VIDE PARAS-4, 5 & 6 OF HIS ORDER, HAS OBSERVED AS UNDER:- 4. ANOTHER SHOW CAUSE NOTICE DATED 07.10.2014 WAS ISSUED TO THE ASSESSEE-TRUST TO EXPLAIN THE DISCREPANCIES. THE A SSESSEE VIDE LETTER DATED 21.10.2014 REPLIED TO THE NOTICE SUBMI TTING THAT EXEMPTION U/S.11 WAS CLAIMED ON THE BONAFIDE BELIEF THAT THE TRUST IS REGISTERED U/S.12AA FROM ITS INCEPTION. FURTHER , THE TRUST HAS SUBMITTED THAT DISSOLUTION CLAUSE AS PER SECTION 12 AA IS NOT APPLICABLE SINCE THE TRUST WAS REGISTERED UNDER THE BOMBAY PUBLIC TRUST ACT, 1950 ON 25.09.1964 AND SECTION 12AA WAS INSERTED IN THE FINANCE ACT, 1996 W.E.F. 01.04.1997. HOWEVER, IT IS SEEN THAT THE ASSESSEE IS CLAIMING BENEFITS U/S.11 ON THE BAS IS OF BONAFIDE BELIEF RATHER THAN ANY DOCUMENTARY EVIDENCE. FURTH ER, THE MATTER REGARDING THE DISSOLUTION CLAUSE IN THE TRUST DEED IS STILL PENDING IN THE HIGH COURT. THE STAND TAKEN BY THE DEPARTMENT IS TO REJECT THE APPLICATION U/S.12AA IN CASES WHERE THE DISSOLUTION CLAUSE IS NOT AS PER THE CONDITIONS LAID DOWN IN THE ACT. 5.THUS, THE TRUST IS NOT FOUND TO BE FULFILLING THE CONDITIONS LAID DOWN UNDER THE ACT. ITA NO.641/RJT/2014 SHRI JAMNAGAR GURJAR CHHATRIYA KADIYA GNATI VS. CIT-JAMNAGAR - 4 - 6. IN VIEW OF THE ABOVE FACTS, SINCE THE TRUST HAS FAILED TO PROVE ITS ELIGIBILITY FOR REGISTRATION U/S.12A(A) OF THE ACT, REGISTRATION SOUGHT U/S.12AA OF THE ACT CANNOT BE GRANTED. 5.1. THE TRIBUNAL IN ITA NO.443/RJT/2013 IN THE CAS E OF SHRI JAMNAGAR GURJAR CHHATRIYA KADIA GNATI VS. CIT, DATED 29/05/2 014, VIDE PARA-5, HAS OBSERVED AS UNDER:- 5. RIVAL SUBMISSIONS WERE CONSIDERED. IT IS PERT INENT TO NOTE THAT THE TRUST IN QUESTION WAS CREATED ON 25.09.1964 AND WAS REGISTERED UNDER BPT ACT WITH THE ASSTT.CHARITY COMMISSIONER, RAJKOT VIDE REGISTRATION NO.A/356/JAMNAGAR DATED 25.09.1964. I T IS ALSO PERTINENT TO NOTE THAT THE ASSESSEE-TRUST IS REGULA RLY FILING RETURN OF INCOME SINCE ITS INCEPTION. THIS PRIMA-FACIE INDIC ATES THAT FILE OF THE ASSESSEE-TRUST IS AVAILABLE WITH THE LD.CIT, JA MNAGAR. IN THIS VIEW OF THE MATTER, THE IMPUGNED ORDER OF LD.CIT, J AMNAGAR REJECTING THE APPLICATION OF THE ASSESSEE-TRUST FOR REGISTRATION U/S.12AA OF THE INCOME-TAX ACT, 1961 IS HEREBY CANC ELLED WITH THE DIRECTION THAT LD.CIT, JAMNAGAR WILL LOCATE THE REG ISTRATION CERTIFICATE U/S.12AA, IF ANY, ISSUED TO THE ASSESS EE-TRUST EARLIER BY LD.CIT. IN CASE THE LD.CIT, JAMNAGAR COULD NOT LOC ATE THE EARLIER REGISTRATION CERTIFICATE ISSUED U/S.12AA OF THE INC OME-TAX ACT, IN THAT EVENT HE SHALL PASS A FRESH ORDER ON ASSESSEE S APPLICATION U/S.12AA AFTER GIVING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE- TRUST. FOR THE PURPOSE OF ISSUING FRESH REGISTRATIO N CERTIFICATE, THE ASSESSEE-TRUST SHALL FURNISH THE ORIGINAL TRUST DEE D AND PROOF OF ACTIVITIES CARRIED OUT, AS REQUIRED BY THE LD.CIT. 5.2. WE FIND THAT THE ABOVE DECISION OF THE TRIBUNA L WAS NOT CONSIDERED BY THE LD.CIT WHILE DISPOSING OF THE APPLICATION OF THE ASSESSEE. THEREFORE, THE ORDER OF THE LD.CIT IS HEREBY SET AS IDE AND THE APPLICATION OF THE ASSESSEE SEEKING FOR REGISTRATION IS RESTORE D BACK TO HIS FILE FOR DECISION AFRESH IN THE LIGHT OF THE TRIBUNALS DECI SION RENDERED IN THE CASE ITA NO.641/RJT/2014 SHRI JAMNAGAR GURJAR CHHATRIYA KADIYA GNATI VS. CIT-JAMNAGAR - 5 - OF SHRI JAMNAGAR GURJAR CHHATRIYA KADIA GNATI VS. C IT, DATED 29/05/2014. THUS, ALL THE GROUNDS RAISED IN ASSESS EES APPEAL ARE ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 05 TH DAY OF DECEMBER, 2014 AT RAJKOT. SD/- SD/- ( ) ( $ ) !' # # ( ANIL CHATURVEDI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER RAJKOT; DATED 05 / 12 /2014 .. , .../ T.C. NAIR, SR. PS / COPY OF THE ORDER FORWARDED TO : 1. )+ / THE APPELLANT 2. ,-)+ / THE RESPONDENT. 3. &6& 7 / CIT-JAMNAGAR 4. 7 ( ) / THE CIT(A)CONCERNED 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 .. 03.12.2014(DICTATION-PAD 3 -PAGES IS ATTACHED WITH THIS FILE). 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 4.12.14 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.5.12.14 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 5.12.14 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