M/s Broadway Chritable Trust, Nadia V. C.I.T - XXI,kolkata, Kolkata

ITA 647/KOL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4989 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 1 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 25-04-2016
• Assessment Year: 2012-2013
• Appeal Filed On: 25-03-2013
• Court: TRIBUNAL
• Department Lawyers: NIRAJ KUMAR
• Assessee Lawyers: S HALDER
• Keywords: Charitable institution; Opportunity of being heard; Retrospective amendment; Condonation of delay; Cancellation of registration
• Section: 80G; 12A; 12AA; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH B , KOLKATA [BEFORE SHRI MAHAVIR SINGH, JM & SHRI M.BALAGANES H, AM] ITA NO.647/KOL/2013 M/S. BROADWAY CHARITABLE TRUST -VERSUS- C.I.T.- XX I, KOLKATA KOLKATA KOLKATA (PAN:AABTB4313L) ( APPELLANT ) (RESPONDENT) FOR THE APPELLANT : SHRI S.HALDER, AR FOR THE RESPONDENT : SHRI NIRAJ KUMAR, CIT(DR) DATE OF HEARING : 25.04.2016. DATE OF PRONOUNCEMENT : 29.04.2016. ORDER PER SHRI M.BALAGANESH, AM 1. THIS APPEAL OF THE ASSESSEE ARISES OUT OF THE O RDER OF THE LEARNED CIT, KOL- XXI, KOLKATA IN PROCEEDINGS M.NO.CIT-KOL-XXI/12A&80 G/2012-13/4297-99 DATED 30.1.2013 REFUSING TO GRANT REGISTRATION U/S 12AA O F THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 2. THE BASIC FACTS OF THIS ISSUE ARE THAT THE ASS ESSEE WAS ESTABLISHED ON 26.7.2006 AND REGISTERED ON 2.8.2006 BY ADDL.REGISTRAR OF ASS URANCE, GOVT. OF WEST BENGAL. THE ASSESSEE SOCIETY PREFERRED AN APPLICATION IN FO RM 10A SEEKING REGISTRATION U/S 12AA OF THE ACT ON 31.1.2012. THE LEARNED CIT MADE THE FOLLOWING OBSERVATIONS IN HIS ORDER :- (I) APPLICATION IN FORM 10A SIGNED BY SECRETARY WIT HOUT MENTIONING ANY DATE. (II) THE APPLICANT SOCIETY HAS NOT FURNISHED THE OR IGINAL TRUST DEED ALONG WITH FORM 10A. THUS THE APPLICATION FOR REGISTRATION U/S 12A WAS N EITHER FILLED IN PROPERLY NOR ACCOMPANIED BY THE DOCUMENTS AS REQUIRED BY RULE 17 A OF THE RULES. (III) BESIDES THE SOCIETY HAS NOT FILED THE APPLICA TION WITHIN THE STIPULATED TIME PERIOD OF ONE YEAR FROM THE CREATION OF THE TRUST A S PER PROVISIONS OF SECTION 12A(1)(A) OF THE IT ACT. FOR THIS REASON PETITION FOR REGISTRATION U/S 12A CANNOT BE ACTED UPON. THE REJECTION OF THE ASSESSE ES REQUEST FOR REGISTRATION U/S 12AA WAS COMMUNICATED THROUGH THIS OFFICE LETTE R DATED 30.8.2012 . THE ITA NO.647/KOL/2013 M/S. BROADWAY CHARITABLE TRUST. 2 ASSESSEE TRUST FILED A PETITION ON 25.9.2012 REQUES TING TO REVIEW THE ORDER AND GRANT REGISTRATION U/S 12AA OF THE IT ACT. IN ORDER TO FINALISE THE CASE ON MERIT, THE APPLICANT WAS GIVEN AMPLE OPPORTUNITY OF HEARIN G TO SUBSTANTIATE GENUINENESS OF ITS CREATION AND ACTIVITIES. DURING THE COURSE OF PROCEEDINGS, FOR CONSIDERATION OF ITS CLAIM OF REVIEW PETITION IN CO URSE OF HEARING ON 8.11.2012 & 7.12.2012 THE APPLICANT TRUST FILED VARIOUS SUPP ORTING DOCUMENTARY EVIDENCES INCLUDING EVIDENCING CREATION OF TRUST I. E PHOTO COPY OF TRUST DEED DATED 267.2006 AND REGISTERED ON 2.8.2006, CERTIFIE D COPY OF MINUTE BOOK (DATED 19.2.2006), CERTIFIED COPY OF CASH BOOK PAGE 1 TO 6 (F.Y. 05-06), CONFIRMATION OF SETTLORS TOWARDS CONTRIBUTION TO CO RPUS FUND WERE FURNISHED. ON PERUSAL OF THE SAID DOCUMENTS, IT WAS OBSERVED T HAT AS PER DEED OF TRUST DATED 26.7.2006 VIDE PAGE NO. 5 & 6 IT HAS BEEN TES TIFIED BY THE SETTLORS, NAMELY (1) MR MALAY KUMAR RAY, (2) MR SUBHAS CHANDRA DEBNA TH, (3) MR MANAS BHATTACHARYA (4) MR SANTANU DAS (5) MR TAPASH CHAKI (6) MR PRANES CHAKRABOTY & (7) MR PRAHLAD PAUL THAT THE SETTLORS BEING INTER-ALIA , ABSOLUTELY SEIZED AND POSSESSED OF THE SUM OF RS. 9 ,00,000/- (RUPEES NINE LACS ONLY) UPON AS NUCLEUS OF A STARTING FUND FOR THE SA ID TRUST. THUS, AS PER THE DEPOSITION OF THE SETTLORS THE MOV ABLE PROPERTY OR SUM AMOUNTING TO RS. 9,00,000/- (NINE LACS ONLY) HAS BE EN SETTLED UPON THE TRSUT. THUS, IT IS INFERRED THAT PRIOR TO EXECUTION OF THE TRUST DEED, THE SETTLORS HAVING CONTRIBUTED EQUALLY HAVE HANDED OVER THE SUM OF RS. 9,00,000/- (RUPEES NINE LACS ONLY) IN CASH AS INITIAL TRUST FUND TO THE T RUSTEES. IN ORDER TO EXAMINE THE AUTHENTICITY OF THE COMING INTO EXISTENCE OF TH E SAID TRUST, RELEVANT SUPPORTING DOCUMENTARY EVIDENCES EVIDENCING CREATIO N OF THE TRUST WAS CALLED FOR FROM THE AUTHORISED REPRESENTATIVE, DURING HEAR ING. THE SAID DOCUMENTS WERE PRODUCED DURING COURSE OF PROCEEDINGS ON 7.12. 2012, NAMELY TRUST DEED, MINUTE BOOK, CASH BOOK, ETC CERTIFIED COPIES THEREO F WERE ALSO PRODUCED AND KEPT ON RECORD. FROM PERUSAL OF ORIGINAL CASH BOOK , IT IS FOUND THAT AS AGAINST THE CLAIM OF INVOLVING AMOUNT OF RS. 9,00,000/- BY THE SETTLORS/TRUSTEES THE ACTUAL AMOUNT AVAILABLE WITH THE SETTLORS WAS ONLY RS. 62,898/- AS ON 26.7.2006, AS PER ENTRIES IN THE CASH BOOK. HENCE, CONTRARY TO THE DEPOSITION BY THE SETTLORS IN THE TRUST DEED, THE TRUST FUND I .E NUCLEUS OF A STARTING FUND IS, SUM OF RS. 9,00,000/- WAS NOT AVAILABLE WITH TH E SETTLORS FOR DEPOSITION OF THE TRUSTEES. FURTHER, AS PER LETTER DATED 7.12.2012, THE TRUST WAS NOT MAINTAINING ANY BANK ACCOUNT, WHICH WAS ONLY OPENED ON 16.3.201 1. AS PER THE INDIAN TRUSTS ACT, 1882, A TRUST MAY BE CREATED FOR ANY LAWFUL PURPOSE. THE PURPOSE OF TRUST IS LAWFUL UNLESS IT IS (A) FORBIDDEN BY LAW, OR (B) IS OF SUCH A NATURE THAT, IF PERMITTED, IT COULD DE FEAT THE PROVISIONS OF ANY LAW, OR (C) IS FRAUDULENT. EVERY TRUST OF WHICH PURPOSE IS UNLAWFUL IS VOID. AS PER SECTION 5 OF INDIAN TRUSTS ACT, 1882, NO TRU ST IN RELATION TO MOVABLE PROPERTY IS VALID UNLESS DECLARED BY A NON-TESTAMEN TARY INSTRUMENT IN WRITING SIGNED BY THE AUTHOR OF THE TRUST OR THE TRUSTEE AN D REGISTERED OR UNLESS THE OWNERSHIP OF THE PROPERTY IS TRANSFERRED TO THE TRU STEE. IN CASE OF MOVABLE PROPERTY THE TRUST MAY BE DECLARED EITHER (I) BY A NON-TESTAMENTARY DOCUMENT ITA NO.647/KOL/2013 M/S. BROADWAY CHARITABLE TRUST. 3 OR BY WILL IN THE CASE OF IMMOVABLE PROPERTY , (II) BY MERE TRANSFER OF OWNERSHIP OF THE PROPERTY WITHOUT MAKING ANY DECLAR ATION, OR EXECUTING ANY DOCUMENT OR WILL. HENCE, IN THE CASE OF THE APPLIC ANT TRUST , THE SUM OF RS. 9 LAKHS COMPRISING THE MOVABLE PROPERTY TO BE SETTLED UPON CREATION OF THE TRUST WAS NOT AVAILABLE WITH THE SETTLORS ON THE DATE OF REGISTRATION OF THE TRUST DEED I.E ON 26.7.2006, AS DISCUSSED IN ABOVE PARAGRAPH. HERE THE ESSENTIAL PRECONDITION OF CREATION OF TRUS T IS NOT SATISFIED. TRUST WAS CREATED ON FALSE STATEMENT. THERE WAS NO VALID TRU ST ON THE DATE OF APPLICATION FOR REGISTRATION U/S 12AA. A SHOW CAUSE NOTICE WAS ISSUED ON 13.12.12 , ASKING THE APPLICANT TO SHOW CAUSE AS TO WHY APPLICATION FOR REGISTRATION U/S 12 AA SHOULD NOT BE REJECTED IN VIEW OF THAT NO VALID TRUST WAS COME INTO EXISTENCE . 2.1. THE ASSESSEE EXPLAINED THAT THE SEVEN SETTLORS WERE SEIZED AND POSSESSED OF RS. 4,33,000/- ON THE DATE OF EXECUTION OF THE DEED OF TRUST FOR SETTLEMENT AS TRUST FUND AND UNDERTOOK TO CONTRIBUTE FURTHER RS. 4,67,000/- IN FUTURE FROM TIME TO TIME TO MAKE FINAL CONTRIBUTION OF RS. 9,00,000/- IN TOTAL BY TH EM AS CORPUS OF THE TRUST. THE LEARNED CIT HOWEVER FINALLY OBSERVED AS UNDER:- ON CAREFUL CONSIDERATION OF APPLICANTS SUBMISSION IT IS OBSERVED THAT APPLICANT HAS ADMITTED THAT THE SETTLORS WERE NOT IN POSSESSI ON OF THE TRUST PROPERTY. I.E SUM AMOUNTING TO RS 9 LACS AND THUS THE SAID PROPER TY WAS NOT AVAILABLE WITH THE SETTLORS FOR DEVOLVING UPON THE TRUST ON THE DA TE OF ITS CREATION / REGISTRATION. THEREFORE NO VALID TRUST HAD COME IN TO EXISTENCE ON THE DATE OF REGISTRATION OF THE TRUST. I AM, THEREFORE, OF THE CONSIDERED OPINION THAT REGISTRATION U/S 12AA CANNOT BE GRANTED IN THIS CAS E, AS A VALID TRUST DID NOT COME INTO EXISTENCE. IN VIEW OF THE ABOVE DISCUSSI ON, THE APPLICATION FOR REVIEW OF REGISTRATION U/S 12AA IS ACCORDINGLY REJECTED . 3. HENCE ASSESSEE IS IN APPEAL BEFORE US AGAINST TH IS REJECTION ORDER ON THE FOLLOWING GROUNDS :- 1. THAT IN THE FACTS, CIRCUMSTANCES AS WELL AS UND ER THE LAW, LD. C.L.T.-XXI, KOLKATA, WAS NOT JUSTIFIED IN TREATING THE 'APPLICATION FOR REGISTRATION' OF THE TRUST U/S 12A(1)(A) WHEN IT WAS MADE U/S 12A(L)(AA) WITHIN THE TIME SPE CIFIED. 2. THAT IN THE FACTS, CIRCUMSTANCES AS WELL AS UNDE R THE LAW, THE LD. C.I.T.-XXI, KOLKATA, WAS NOT JUSTIFIED IN REFUSING REGISTRATION MERELY POINTING OUT CERTAIN RECTIFIABLE MISTAKE IN THE INSTRUMENT EVIDENCING OB JECTS AND GENUINENESS OF ITS ACTIVITIES. ITA NO.647/KOL/2013 M/S. BROADWAY CHARITABLE TRUST. 4 3. THAT IN THE FACTS, CIRCUMSTANCES AS WELL AS UNDE R THE LAW, THE LD. C.L.T.-XXI, KOLKATA, ERRED IN REFERRING TO SECTION (5) AND (6) OF THE INDIAN TRUSTS ACT, 1882, WHEN THERE HAS BEEN NO VIOLATION AS SUCH OF THE PROVISIO NS OF SECTION (5) AND (6) OF THE INDIAN TRUSTS ACT, 1882. 4. THAT IN THE FACTS, CIRCUMSTANCES AS WELL AS UNDE R THE LAW, LD. C.I.T.-XXI, KOLKATA. SHOULD HAVE GRANTED 'REGISTRATION' U/S 12AA IN VIEW OF THE 'RECTIFICATION DEED' EXECUTED TO THE ORIGINAL DEED OF TRUST REMOVING THE APPARENT MISTAKE THEREIN. 5. THAT THE APPELLANT CRAVES LEAVE TO ADDUCE, MODIF Y, ADD, RESCIND, REVISE ANY OF THE GROUND(S) IN COURSE OF PROCEEDINGS BEFORE THE HONOU RABLE I.T.A.T., KOLKATA. THE ASSESSEE HAD ALSO RAISED THE FOLLOWING ADDITION AL GROUND :- (1A) THAT IN THE FACTS, CIRCUMSTANCES AS WELL AS U NDER THE LAW, THE ORDER PASSED BY LD. CIT - XXI ON 30.08.2012, REFUSING GRANT OF REGI STRATION U/S 12AA IN VIOLATION OF STATUTORY PERIOD OF SIX MONTHS AS REQUIRED U/S 12AA (2), GOT BARRED BY LIMITATION AND THE APPELLANT, IN CONSEQUENCE, SHOULD BE PRESUMED TO BE GRANTED REGISTRATION . [2004]91 ITDI (BANG). 4. THE LEARNED AR ARGUED THAT THE ORDER GRANTING O R REFUSING REGISTRATION SHOULD HAVE BEEN PASSED IN TERMS OF SECTION 12AA(2) OF THE ACT WITHIN 6 MONTHS FROM THE END OF THE MONTH IN WHICH APPLICATION IN FORM 10A WAS FIL ED. IN THE INSTANT CASE, THE ORDER WAS PASSED BEYOND SIX MONTHS REFUSING THE REGISTRAT ION. HENCE HE PLACED RELIANCE ON THE DECISION OF THE CO-ORDINATE BENCH OF BANGALORE TRIBUNAL IN THE CASE OF KARNATAKA GOLF ASSOCIATION VS DIRECTOR OF INCOME TAX REPORTED IN (2004) 91 ITD 1 (BANG. ITAT) IN SUPPORT OF HIS CONTENTIONS WHEREIN IT WAS HELD T HAT WHERE THE TRUST FILES AN APPLICATION FOR REGISTRATION, BUT NO ORDER IS PASS ED WITHIN STATUTORY PERIOD, AUTHORITY CANNOT DEPRIVE ASSESSEE BENEFIT OF REGISTRATION. HE ARGUED THAT THE REGISTRATION HAS BEEN REFUSED ONLY ON THE GROUND THAT THE TRUST HAD COME INTO EXISTENCE IN VIEW OF THE FACT THAT THE INITIAL CORPUS FUND OF RS 9 LACS WAS NOT BROUGHT IN BY THE SETTLORS AS MENTIONED IN THE TRUST DEED. HE FURTHER ARGUED THA T THE OBJECTS STATED IN THE TRUST DEED WERE EXAMINED BY THE LEARNED CIT AND REMAND REPORT ALSO SOUGHT FROM THE LEARNED AO AND NO ADVERSE REMARKS WERE MADE IN THE ORDER WI TH REGARD TO THE SAME. HENCE THE OBJECTS ARE CHARITABLE IN NATURE ARE PROVED BEY OND DOUBT. HE FURTHER POINTED OUT THAT THE SETTLORS / TRUSTEES HAVE SUBSEQUENTLY BROU GHT IN MORE MONIES INTO THE TRUST WHICH IS MUCH MORE BEYOND RS 9 LAKHS FOR IMPLEMENTI NG THE CHARITABLE OBJECTS OF THE TRUST. ACCORDINGLY HE PRAYED FOR GRANTING OF REGIS TRATION U/S 12AA OF THE ACT TO THE ITA NO.647/KOL/2013 M/S. BROADWAY CHARITABLE TRUST. 5 ASSESSEE TRUST. IN RESPONSE TO THIS, THE LEARNED DR ARGUED THAT THE TRUST DEED ITSELF IS INCORRECT AND MISPLACED IN AS MUCH AS THE SETTLORS HAD NOT BROUGHT THEIR INITIAL CORPUS FUND OF RS 9 LAKHS AS HAS BEEN OBSERVED BY THE LEAR NED CIT IN HIS ORDER REFUSING REGISTRATION U/S 12AA OF THE ACT AND HENCE HE ARGUE D THAT THE TRUST HAD COME INTO EXISTENCE AT ALL. HE SUBMITTED THAT THE DOCUMENTS MENTIONED IN RULE 17A SUCH AS ORIGINAL TRUST DEED AND ACCOUNTS FOR EARLIER YEARS WERE NOT SUBMITTED BY THE ASSESSEE BEFORE THE LEARNED CIT. WITH REGARD TO THE ADDITI ONAL GROUND , HE PLACED RELIANCE ON PROVISO TO RULE 11AA(6) OF THE IT RULES. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT THE LEARNED AR HAD POINTED OUT THAT TH E TRUST IS RUNNING AN EDUCATIONAL INSTITUTION IN THE NAME OF BROADWAY ACCENT JUNIOR H IGH SCHOOL, DULY RECOGNIZED AND APPROVED BY GOVT. OF WEST BENGAL SECONDARY EDUCATIO N BOARD, VIDE THEIR REFERENCE NO. S/RCC09/2011/83. THE RUNNING OF SCHOOL IN THE NAME OF THE ASSESSEE TRUST IS NOT DISPUTED BY THE REVENUE. WE FIND THAT THE LEARNED CIT HAD NOT DISPUTED THE OBJECTS OF THE TRUST AS CHARITABLE IN NATURE. WE FIND THAT HE HAD ONLY POINTED OUT CERTAIN DEFECTS IN THE TRUST DEED WHICH ARE CURABLE IN NATURE AND W HICH WOULD NOT DISTURB THE ROOT OF THE EXISTENCE OF THE TRUST PER SE. WE FIND THAT T HE ASSESSEE HAD REPLIED BEFORE THE LEARNED CIT THAT A SUM OF RS. 4,33,000/- WERE SEIZE D AND POSSESSED WITH THE SETTLORS BEING THE INITIAL CORPUS FUND OF THE TRUST AND HAD UNDERTOOK TO INVEST THE BALANCE PROMISED AMOUNT OF RS. 4,67,000/- IN FUTURE TO THE TRUST. WE FIND THAT THE LEARNED CIT HAD CALLED FOR A REPORT FROM THE LEARNED AO TO SATISFY HIMSELF AS TO THE GENUINENESS OF THE ACTIVITIES OF THE TRUST AS WELL AS ITS OBJECTS IN TERMS OF SECTION 12AA(1)(A) OF THE ACT. IT WAS ARGUED THAT ADMITTED LY NO ADVERSE REMARKS WERE SENT BY THE LEARNED AO IN THIS REGARD. HOWEVER, THE LEARNED CIT HAD PROCEEDED INITIALLY TO REJECT THE APPLICATION ON THE GROUND THAT THE SAME WAS NOT MADE WITHIN ONE YEAR FROM THE DATE OF CREATION OF THE TRUST AND THERE IS NO P OWER TO CONDONE THE DELAY PROVIDED IN THE STATUTE. IN THIS REGARD, WE FIND THAT IN CASE THE APPLICANT HAD PREFERRED AN APPLICATION ON OR AFTER 1.6.2007, THE LEARNED CIT, IF SATISFIED WITH THE CHARITABLE OBJECTS OF THE TRUST AND GENUINENESS OF THE ACTIVIT IES OF THE TRUST, IS DUTY BOUND TO GRANT REGISTRATION FROM THE DATE OF APPLICATION OF THE TRUST. HE CANNOT SIMPLY REJECT THE ITA NO.647/KOL/2013 M/S. BROADWAY CHARITABLE TRUST. 6 APPLICATION JUST BECAUSE IT IS FILED BEYOND ONE YEA R PERIOD. WE ALSO FIND THAT THIS ORDER REFUSING REGISTRATION ON FLIMSY GROUND WAS PA SSED BEYOND THE PERIOD OF SIX MONTHS FROM THE END OF THE MONTH IN WHICH APPLICATI ON WAS FILED BY THE ASSESSEE WHICH IS IN GROSS VIOLATION OF SECTION 12AA(2) OF T HE ACT. 5.1. WE FIND THAT IN THE SECOND ROUND OF RECTIFICAT ION PROCEEDINGS, THE LEARNED CIT ULTIMATELY HAD AGAIN REJECTED THE REGISTRATION U/S 12AA OF THE ACT TO THE ASSESSEE ON THE GROUND THAT THE INITIAL CORPUS FUND HAS NOT BEE N BROUGHT IN BY THE SETTLORS / TRUSTEES AS STATED IN THE TRUST DEED AND ACCORDINGLY HELD TH AT THE TRUST HAD NOT COME INTO EXISTENCE. WE FIND THAT THE SETTLORS HAD PUMPED I N RS. 4,33,000/- AS INITIAL CORPUS FUND WHICH IS NOT IN DISPUTE AND HAD ALSO UNDERTOOK TO BRING IN THE BALANCE SUM OF RS. 4,67,000/- AS PER THE TRUST DEED IN FUTURE. IN OU R OPINION, JUST BECAUSE THE PART OF THE INITIAL CORPUS FUND HAS NOT BEEN BROUGHT IN BY THE SETTLORS, IT CANNOT BE SAID THAT THE TRUST HAS NOT COME INTO EXISTENCE. MORE SO, THE S AME NEED NOT BE EXAMINED AT THE TIME OF GRANTING REGISTRATION U/S 12AA OF THE ACT. IN THIS REGARD, WE DRAW SUPPORT FROM THE DECISION OF THE CO-ORDINATE BENCH OF DELHI TRIBUNAL IN THE CASE OF ACHARYA SEWA NIVAS UTTARANCHAL VS CIT REPORTED IN (2007) 13 SOT 54 (DELHI) (URO) , WHEREIN IT WAS HELD THAT :- UNDER SECTION 12AA THE JURISDICTION OF THE COMMISS IONER IS CONFINED TO SATISFYING HIMSELF ABOUT THE OBJECTS OF THE TRUST AND THE GENU INENESS OF THE ACTIVITIES AND FOR THIS PURPOSE, HE IS AUTHORIZED TO MAKE SUCH ENQUIRIES AS HE MAY DEEM FIT. THE COMMISSIONER, IN THE INSTANT CASE, HAD NOT TAKEN AN Y OBJECTION TO THE CHARITABLE NATURE OF THE TRUST. IN FACT, THE OBJECTS OF THE TRUST AS DECLARED IN THE TRUST DEED, WERE ALL CHARITABLE OBJECTS AND THERE WAS NO FINDING RECORDE D BY THE COMMISSIONER TO THE CONTRARY. THE REAL OBJECTION OF THE COMMISSIONER AP PEARED TO BE THAT THE INITIAL CONTRIBUTION OF RS. 500 MADE BY THE FOUNDER OF THE TRUST AND DEDICATED TO THE OBJECTS OF THE TRUST WAS HARDLY SUFFICIENT TO CARRY OUT THE CH ARITABLE ACTIVITIES OF THE TRUST. THE SUFFICIENCY OR OTHERWISE OF THE INITIAL CONTRIBUTIO N MADE BY THE FOUNDER TO THE TRUST FUND IS NOT A RELEVANT FACTOR WHILE DEALING WITH AN APPL ICATION FOR REGISTRATION UNDER SECTION 12AA. THE SECTION IN TERMS DID NOT MAKE IT A CONSID ERATION FOR THE GRANT OF REGISTRATION. FURTHER, THERE WAS A BOARD OF TRUSTEES CONSTITUTED BY THE TRUST DEED AND THE BOARD HAD BEEN AUTHORIZED TO COLLECT CONTRIBUTIONS FROM SCHOO LS AND SOCIETY TO MEET THE OBJECTS OF THE TRUST AND HAD BEEN DIRECTED TO DEPOSIT THE CONT RIBUTIONS INTO THE CORPUS FUND. THE CORPUS FUND WAS TO BE INVESTED IN THE PRESCRIBED MO DES AND THE TRUST DEED AUTHORISED THE TRUSTEES TO UTILIZE THE EARNINGS FROM THE CORPU S FUND TOWARDS MEETING THE OBJECTS OF THE TRUST. IN SPECIAL CASES, THE TRUSTEES HAD BEEN AUTHORIZED 10 UTILIZE THE CORPUS FUND ALSO FOR SUCH PURPOSES. THE TRUSTEES HAD COLLECTED A SUM OF RS. 5,71,927 TOWARDS CONTRIBUTION TO THE TRUST WHICH HAD BEEN DEPOSITED WITH THE BANK. THE STATEMENT OF ACCOUNT ISSUED BY THE BANK, WHICH WAS PLACED BEFORE THE COMMISSIONER SHOWED THIS ITA NO.647/KOL/2013 M/S. BROADWAY CHARITABLE TRUST. 7 FIGURE. THEREFORE, THERE WERE SUFFICIENT FUNDS AVAI LABLE WITH THE TRUST, FROM WHICH THE CHARITABLE ACTIVITIES COULD BE CARRIED OUT. THE COM MISSIONER WAS NOT JUSTIFIED IN REFUSING 10 GRANT REGISTRATION TO THE ASSESSEE- TRU ST. THE REASONS GIVEN BY HIM FOR SUCH REFUSAL WERE EXTRANEOUS TO SECTION 12AA. THE COMMIS SIONER HAD NOT DOUBTED THE GENUINENESS OF THE ACTIVITIES OF THE TRUST. FOR THE ABOVE REASONS, THE REGISTRATION WAS TO BE A LLOWED TO THE ASSESSEE AND THE ORDER PASSED BY THE COMMISSIONER UNDER SECTION 12AA WAS T O BE SET ASIDE. 5.2. WE FIND THAT THE LEARNED CIT HAD ALSO OBSERVE D THAT THE ASSESSEE HAD VIOLATED THE PROVISIONS OF SECTION 5 AND 6 OF INDIAN TRUSTS ACT, 1882. FOR THE SAKE OF CONVENIENCE, THE RELEVANT PROVISION IS REPRODUCED H EREINBELOW:- SECTION 5 OF INDIAN TRUSTS ACT, 1882 TRUST OF IMMOVABLE PROPERTY NO TRUST IN RELATION TO IMMOVABLE PROPERTY IS VALID UNLESS DECLARED BY A NON-TESTAMENTARY INSTRUM ENT IN WRITING SIGNED BY THE AUTHOR OF THE TRUST OR THE TRUSTEE AND REGISTERED, OR BY THE WILL OF THE AUTHOR OF THE TRUST OR OF THE TRUSTEE. TRUST OF MOVABLE PROPERTY NO TRUST RELATING TO MOVABLE PROPERTY IS VALID UNLESS DECLARED AS AFORESAID, OR UNLESS THE OWNERSH IP OF THE PROPERTY IS TRANSFERRED TO THE TRUSTEE. THESE RULES DO NOT APPL Y WHERE THEY WOULD OPERATE SO AS TO EFFECTUATE A FRAUD. SECTION 6 OF INDIAN TRUSTS ACT, 1882 CREATION OF TRUST. 6. SUBJECT TO THE PROVISIONS OF SECTION 5, A TRUST IS CREATED WHEN THE AUTHOR OF THE TRUST INDICATES WITH REASONABLE CERTAINTY BY ANY WORDS OR ACTS (A) AN INTENTION ON HIS PART TO CREATE THEREBY A TRUST, (B) THE PURPOSE OF THE T RUST, (C) THE BENEFICIARY, AND (D) THE TRUST-PROPERTY, AND (UNLESS THE TRUST IS DECLARED B Y WILL OR THE AUTHOR OF THE TRUST IS HIMSELF TO BE THE TRUSTEE) TRANSFERS THE TRUST PROP ERTY TO THE TRUSTEE. WE FIND THAT THE PROVISIONS OF SECTION 5 AND 6 OF I NDIAN TRUSTS ACT, 1882 HAVE NOT BEEN VIOLATED BY THE ASSESSEE IN THE INSTANT CASE I N ANY MANNER. WHAT IS CONTEMPLATED FOR CREATION OF TRUST IS BY WAY OF MAKING INITIAL I NVESTMENT OF RS 9 LAKHS BY THE SETTLORS OUT OF WHICH A SUM OF RS. 4,33,000/- HAS B EEN IN THE POSSESSION OF THE SETTLORS ON THE DATE OF EXECUTION OF THE TRUST DEED. IN RE SPECT OF BALANCE SUM OF RS. 4,67,000/- , THE SETTLORS HAD UNDERTOOK TO INVEST THE SAME INT O THE TRUST IN FUTURE FROM TIME TO TIME. THIS ACTION OF THE SETTLORS ACCORDING TO US WOULD NOT TAMPER THE EXISTENCE OF THE TRUST. IT IS NOT IN DISPUTE THAT THE SETTLORS HAD BROUGHT IN RS 4,33,000/- AS THE INITIAL CORPUS FUND OF THE TRUST. THAT ITSELF BRINGS THE T RUST INTO EXISTENCE WITH CHARITABLE ITA NO.647/KOL/2013 M/S. BROADWAY CHARITABLE TRUST. 8 OBJECTS. MOREOVER, THERE IS NO ALLEGATION THAT THE MONIES SO BROUGHT IN HAVE BEEN DIVERTED TO THE PERSONAL BENEFIT OF THE SETTLORS. THE MONIES SO BROUGHT IN REMAINED IN THE COFFERS OF THE TRUST TO BE DEPLOYED FOR THE CHA RITABLE OBJECTS OF THE TRUST. 5.3. IT IS TRUE THAT RULE 17A PROVIDES THAT ASSESS EE HAS TO FURNISH THE PREVIOUS YEARS ACCOUNTS WHEN APPLICATION IN FORM 10A IS FILED. I N OUR OPINION, THIS REQUIREMENT IN RULE 17A ASKING FOR PREVIOUS YEAR ACCOUNTS WAS RELE VANT WHEN THE LEGISLATURE HAD PROVIDED FOR CONDONATION OF DELAY IN FILING THE APP LICATION IN FORM 10A AND GRANTING REGISTRATION WITH RETROSPECTIVE EFFECT. NOW THE R EQUIREMENT OF ACCOUNTS HAD PRACTICALLY BECOME REDUNDANT AS THE REGISTRATION IS GRANTED ONLY WITH EFFECT FROM THE DATE ON WHICH APPLICATION IS MADE AFTER 1.6.2007. HENCE VIEWING FROM THIS PERSPECTIVE, THE ASSESSEE TRUST NOT BRINGING IN THE PART OF THE PROMISED INITIAL CORPUS FUND WOULD NOT VITIATE THE STATUS OF THE TRUST COMI NG INTO EXISTENCE MUCH LESS SEEKING REGISTRATION UNDER THE INCOME TAX ACT. WE HOLD THAT WHAT IS RELEVANT AT THE TIME OF GRANTING REGISTRATION U/S 12AA OF THE ACT IS THAT T HE LEARNED CIT SHOULD EXAMINE WHETHER THE OBJECTS OF THE TRUST AS ENUMERATED IN T HE TRUST DEED ARE CHARITABLE IN NATURE AND ACTIVITIES OF THE TRUST ARE GENUINE. IT IS WELL SETTLED THAT THE ASSESSEE TRUST CANNOT BE FORCED TO HAVE CARRIED OUT THE OBJECTS AS PER THE T RUST DEED BEFORE SEEKING REGISTRATION U/S 12AA OF THE ACT. WHILE THIS IS SO, BOTH THE RE CEIPTS OF THE TRUST AS WELL AS THE APPLICATION OF THE FUNDS OF THE TRUST WOULD BECOME IRRELEVANT FOR EXAMINATION AT THE TIME OF GRANTING REGISTRATION. HOWEVER, THE SAME W OULD BE VERY MUCH RELEVANT AT THE TIME OF ASSESSMENT PROCEEDINGS WHEREIN THE ELIGIBIL ITY OF CLAIM OF EXEMPTION U/S 11 OF THE ACT COULD BE EXAMINED IN DETAIL. WE FIND THAT THE HONBLE KERALA HIGH COURT IN ITS RECENT DECISION HAD AN OCCASION TO CONSIDER THE POWERS OF THE LEARNED CIT VIS A VIS THE BEHAVIOUR OF THE TRUSTEES AT THE STAGE OF GRANT ING REGISTRATION U/S 12AA OF THE ACT, IN THE CASE OF SREE ANJANEYA MEDICAL TRUST VS CIT REPORTED IN (201 6) 382 ITR 399 (KER) DATED 11.2.2016, WHEREIN IT WAS HELD THAT : IT IS CLEAR FROM A PLAIN READING OF SECTIONS 12A A ND 12AA OF THE ACT THAT WHAT IS INTENDED THEREBY IS ONLY A REGISTRATION SIMPLIC ITOR OF THE ENTITY OF A TRUST. THIS HAS BEEN MADE A CONDITION PRECEDENT FOR CLAIMI NG THE BENEFITS OF EXEMPTION. NO EXAMINATION OF THE MODUS OF THE APPLI CATION OF THE FUNDS OF THE ITA NO.647/KOL/2013 M/S. BROADWAY CHARITABLE TRUST. 9 ASSESSEE OR AN EXAMINATION OF THE ETHICAL BACKGROUN D OF ITS SETTLORS IS CALLED FOR , WHILE CONSIDERING AN APPLICATION FOR REGISTRATION . THE STAGE FOR CONSIDERATION OF THE RELEVANCE OF THE OBJECT OF THE ASSESSEE AND THE APPLICATION OF ITS FUNDS ARISES AT THE TIME OF THE ASSESSMENT. WHERE BENEFI TS ARE CLAIMED BY ASSESSES IN TERMS OF SECTIONS 11 AND 12 OF THE ACT, THE QUESTIO N AS TO THE NATURE OF SUCH CONTRIBUTION AND INCOME CAN BE LOOKED INTO. AT THE TIME OF REGISTRATION OF THE ASSESSEE WHAT IS TO BE LOOKED INTO IS WHETHER THE A SSESSEE IS A GENUINE ONE OR WHETHER IT IS A SHAM INSTITUTION FLOATED ONLY TO AV AIL OF THE BENEFITS OF EXEMPTION UNDER THE ACT. SIMILARLY WE FIND THAT CARRYING ON OF CHARITABLE AC TIVITIES OF THE TRUST IN ACCORDANCE WITH THE OBJECTS IS NOT BE TREATED AS A CONDITION P RECEDENT FOR THE PURPOSE OF SEEKING REGISTRATION U/S 12AA OF THE ACT. WE DRAW SUPPORT FROM THE FOLLOWING CASES IN THIS REGARD:- (A) HONBLE DELHI HIGH COURT IN THE CASE OF DIT VS FOUNDATION OF OPHTHALMIC AND OPTOMETRY RESEARCH EDUCATION CENTRE REPORTED IN (20 13) 355 ITR 361 (DEL) (B) HONBLE KARNATAKA HIGH COURT IN THE CASE OF DIT (EXEMPTIONS) VS MEENAKSHI AMMA ENDOWMENT TRUST REPORTED IN (2013) 354 ITR 21 9 (KAR) (C ) HONBLE MADRAS HIGH COURT IN THE CASE OF DIT ( EXEMPTIONS) VS SEERVI SAMAJ TAMBARAM TRUST REPORTED IN (2014) 362 ITR 199 (MAD) WE ARE CONVINCED ON PERUSAL OF THE TRUST DEED THAT THE OBJECTS ENUMERATED THEREIN ARE GENUINE AND CHARITABLE IN NATURE. 5.4. WE FIND THAT THE RELIANCE PLACED BY THE LEARNE D DR ON PROVISO TO RULE 11AA(6) OF THE IT RULES IS NOT WELL FOUNDED . FOR THE SAKE OF CONVENIENCE, THE SAID PROVISIONS ARE REPRODUCED HEREUNDER:- RULE 11AA-REQUIREMENTS FOR APPROVAL OF AN INSTITUTI ON OR FUND UNDER SECTION 80G (6) THE TIME LIMIT WITHIN WHICH THE COMMISSIONER SH ALL PASS AN ORDER EITHER GRANTING THE APPROVAL OR REJECTING THE APPLICATION SHALL NOT EXCEED SIX MONTHS FROM THE END OF THE MONTH IN WHICH SUCH APPLICATION WAS MADE: ITA NO.647/KOL/2013 M/S. BROADWAY CHARITABLE TRUST. 10 PROVIDED THAT IN COMPUTING THE PERIOD OF SIX MONTHS , ANY TIME TAKEN BY THE APPLICANT IN NOT COMPLYING WITH THE DIRECTIONS OF THE COMMISS IONER UNDER SUB-RULE (3) SHALL BE EXCLUDED. IN THE INSTANT CASE, THE ORIGINAL ORDER REFUSING RE GISTRATION ON FLIMSY GROUNDS WAS PASSED WITHOUT GRANTING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ADMITTEDLY THE DETAILS CALLED FOR BY THE LEARNED CIT WERE SUBMITTE D IN THE MONTH OF MARCH 2012 ITSELF AND ORDER REFUSING REGISTRATION AT THE FIRST INSTANCE WAS PASSED ON 30.8.2012 WHICH IS BEYOND SIX MONTHS FROM THE END OF THE MONT H IN WHICH APPLICATION WAS FILED. MOREOVER, WE FIND THAT THE PROVISION RELIED UPON BY LEARNED DR IS RELEVANT FOR GRANTING APPROVAL UNDER SECTION 80G OF THE ACT AND NOT FOR GRANTING REGISTRATION U/S 12AA OF THE ACT. 5.5. WE FIND THAT THE LEARNED AR HAD RAISED AN ADDI TIONAL GROUND STATING THAT THE ORDER REFUSING REGISTRATION U/S 12AA OF THE ACT HAS BEEN PASSED BY THE LEARNED CIT BEYOND THE STIPULATED PERIOD OF 6 MONTHS AS PER SEC TION 12AA(2) OF THE ACT. WE FIND THAT THIS ADDITIONAL GROUND DESERVES TO BE ADMITTED AS IT GOES TO THE ROOT OF THE MATTER AND DOES NOT REQUIRE ANY FRESH VERIFICATION OF FACT S. IN THIS REGARD, THE FOLLOWING SEQUENCE OF EVENTS WOULD EXPLAIN THE CASE BETTER:- 31.1.2012 - DATE OF FORM 10 A BEFORE THE LEARNED CI T 31.7.2012 LAST DATE FOR PASSING ORDER AS PER SECT ION 12AA(2) OF THE ACT 30.8.2012 FIRST ORDER OF LEARNED CIT REFUSING REG ISTRATION ON THE GROUND THAT NO PROVISION IS LAID OUT FOR CONDONING THE DELAY IN PREFERRING THE APPLICATION IN FORM 10A. 24.9.2012 - SUBMISSIONS OF THE ASSESSEE BRINGING T O THE NOTICE OF THE LEARNED CIT THAT THE ORDER IS PASSED BEYOND SIX MONTHS VI OLATING THE PROVISIONS OF SECTION 12AA(2) OF THE ACT THEREBY AUTOMATICALLY ENTITLED FOR REGISTRATION U/S 12AA OF THE ACT AND ALSO REQUESTING LEARNED CIT TO RECTIFY HIS OLD ORDER. ITA NO.647/KOL/2013 M/S. BROADWAY CHARITABLE TRUST. 11 13.12.2012 SHOW CAUSE NOTICE ISSUED BY LEARNED CI T FOR CANCELLATION OF REGISTRATION U/S 12AA OF THE ACT 26.12.2012 REPLY BY THE ASSESSEE TO THE SHOW CAUS E NOTICE OF LEARNED CIT 30.1.2013 - IMPUGNED ORDER OF THE LEARNED CIT REFU SING REGISTRATION U/S 12AA WE FIND THAT THE ASSESSEE HAD NOT PREFERRED ANY FRE SH APPLICATION IN STATUTORY FORM NO. 10A WHILE REQUESTING THE LEARNED CIT TO RECTIFY HIS OLD ORDER. INSTEAD IT HAD ONLY MADE A WRITTEN REQUEST. THE DELAY IN PASSING THE O RIGINAL ORDER ON 30.8.2012 WHICH IS BEYOND SIX MONTHS WAS ALSO BROUGHT TO THE NOTICE OF THE LEARNED CIT BY THE ASSESSEE WHICH HAS NOT BEEN TAKEN INTO COGNIZANCE BY THE LEA RNED CIT EVEN IN THE SECOND ROUND OF PROCEEDINGS. WE FIND THAT THE CENTRAL BOARD OF DIRECT TAXES HAD ISSUED INSTRUCTION NO. 16/2015 DATED 6.11.2015 SPECIFICALLY ADDRESSING THE IMPUGNED ISSUE UNDER DISPUTE WHICH IS REPRODUCED HEREINBELOW :- INSTRUCTION NO.16/2015 F.NO.197/38/2015-ITA.1 GOVERNMENT OF INDIA MINISTRY OF FINANCE, DEPARTMENT OF REVENUE (CENTRAL BOARD OF DIRECT TAXES) (ITA-1 DIVISION) NORTH BLOCK, ITA.I DIVISION DATED, THE 6 TH NOVEMBER, 2015 TO ALL THE PRINCIPAL CHIEF COMMISSIONERS OF INCOME-TAX ALL THE CHIEF COMMISSIONERS INCOME-TAX CHIEF COMMISSIONER OF INCOME-TAX (EXEMPTIONS) ALL DIRECTORS GENERAL OF INCOME-TAX SUB : FOLLOWING THE PRESCRIBED TIME LIMIT IN PASSING ORDE R U/S 12AA OF THE INCOME- TAX ACT, 1961 SUB-SECTION(2) OF SECTION 12AA OF THE I NCOME-TAX ACT, 1961 PRESCRIBES THAT EVERY ORDER GRANTING OR REFUSING REGISTRATION UNDER CLAUS E(B) OF SUB-SECTION (1) OF THAT SECTION SHALL BE PASSED BEFORE THE EXPIRY OF SIX MONTHS FRO M THE END OF THE MONTH IN WHICH THE APPLICATION WAS RECEIVED UNDER CLAUSE (A) OR CLAUSE (AA) OF THE SUB-SECTION (1) THEREOF. THUS WHILE PROCESSING THE APPLICATION U/S 12AA OF T HE ACT, THE TIME LIMIT OF SIX MONTHS HAS TO BE ADHERED TO BY THE COMMISSIONER OF INCOME TAX (EXEMPTIONS). HOWEVER, IT HAS BEEN BROUGHT TO THE NOTICE OF THE BOARD THAT THE SA ID TIME LIMIT HAS NOT BEEN OBSERVED IN SOME CASES. ITA NO.647/KOL/2013 M/S. BROADWAY CHARITABLE TRUST. 12 2. THE UNDERSIGNED IS DIRECTED TO CONVEY THAT THE AFORESAID TIME LIMIT OF SIX MONTHS IS TO BE STRICTLY FOLLOWED BY THE COMMISSIONER OF INCO ME TAX (EXEMPTIONS) WHILE PASSING ORDER U/S 12AA. THE CCIT (EXEMPTIONS) MAY MONITOR T HE ADHERENCE OF PRESCRIBED TIME LIMIT AND INITIATE SUITABLE ADMINISTRATIVE ACTION I N CASE ANY LAXITY IN ADHERING TO THE SAME IS NOTICED. WE ALSO FIND THAT THE HONBLE SUPREME COURT IN THE CASE OF CIT VS SOCIETY FOR THE PROMOTION OF EDUCATION , ALLAHABAD IN CIVIL APPEAL NO. 1478 OF 2016 DATED 16.2.2016 HAD CATEGORICALLY HELD AS BELOW:- 3. THE SHORT ISSUE IS WITH REGARD TO THE DEEMED REG ISTRATION OF AN APPLICATION UNDER SECTION 12AA OF THE INCOME TAX ACT. THE HIGH COURT HAS TAKEN THE VIEW THAT ONCE AN APPLICATION IS MADE UNDER THE SAID PRO VISION AND IN CASE THE SAME IS NOT RESPONDED TO WITHIN SIX MONTHS, IT WOULD BE TAKEN THAT THE APPLICATION IS REGISTERED UNDER THE PROVISION. 4. THE LEARNED ADDITIONAL SOLICITOR GENERAL APPEARI NG FOR THE APPELLANTS, HAS RAISED AN APPREHENSION THAT IN THE CASE OF THE RESP ONDENT, SINCE THE DATE OF APPLICATION WAS OF 24.02.2003, AT THE WORST, THE SA ME WOULD OPERATE ONLY AFTER SIX MONTHS FROM THE DATE OF THE APPLICATION. 5. WE SEE NO BASIS FOR SUCH AN APPREHENSION SINCE T HAT IS THE ONLY LOGICAL SENSE IN WHICH THE JUDGEMENT COULD BE UNDERSTOOD. THEREF ORE, IN ORDER TO DISABUSE ANY APPREHENSION, WE MAKE IT CLEAR THAT THE REGISTR ATION OF THE APPLICATION UNDER SECTION 12AA OF THE INCOME TAX ACT IN THE CAS E OF THE RESPONDENT SHALL TAKE EFFECT FROM 24.08.2003. WE FIND THAT THE AFORESAID JUDGEMENT HAD EMANATED O UT OF THE ORDER PASSED BY THE HONBLE ALLAHABAD HIGH COURT REPORTED IN (2008) 171 TAXMAN 113 (ALLAHABAD) WHEREIN IT WAS HELD THAT : ADMITTEDLY, AFTER THE STATUTORY LIMITATION, THE CO MMISSIONER WOULD BECOME FUNCTUS OFFICIO, AND HE COULD NOT THEREAFTER PASS ANY ORDER EITHER ALLOWING OR REJECTING THE REGISTRATION. IT IS OBVIOUS THAT THE APPLICATION CA NNOT BE ALLOWED TO BE TREATED AS PERPETUALLY UNDECIDED. THEREFORE, THE KEY QUESTION ARISES WHETHER UPON LAPSE OF THE SIX MONTHS PERIOD WITHOUT ANY DECISION, THE APPLICATION FOR REGISTRATION SHOULD BE TREATED AS REJECTED OR IT SHOULD BE TREATED AS ALLOWED. [PA RA 6] TAKING THE VIEW THAT NON-CONSIDERATION OF THE REGIS TRATION APPLICATION WITHIN THE TIME FIXED BY SECTION 12AA (2) WOULD RESULT IN DEEMED RE GISTRATION, MAY, AT THE WORST, CAUSE LOSS OF SOME REVENUE OR INCOME-TAX PAYABLE BY THAT INDIVIDUAL ASSESSEE. THIS WOULD BE SIMILAR TO A SITUATION WHERE THE ASSESSING AUTHORIT Y FAILS TO MAKE THE ASSESSMENT OR REASSESSMENT WITHIN THE LIMITATION PRESCRIBED FOR T HE SAME. THAT ALSO LEADS OCCASIONALLY TO LOSS OF REVENUE FROM THAT INDIVIDUAL ASSESSEE. [ PARA 10] ITA NO.647/KOL/2013 M/S. BROADWAY CHARITABLE TRUST. 13 ON THE OTHER HAND, TAKING THE CONTRARY VIEW AND HOL DING THAT NOT TAKING A DECISION WITHIN THE TIME FIXED BY SECTION 12AA(2) WAS OF NO CONSEQUENCE WOULD LEAVE THE ASSESSEE TOTALLY AT THE MERCY OF THE INCOME-TAX AUT HORITIES, INASMUCH AS THE ASSESSEE HAD NOT BEEN PROVIDED WITH ANY REMEDY UNDER THE ACT AGA INST NON-DECISION. [PARA 11] BESIDES, THE SAID VIEW WOULD NOT CREATE ANY IRREVER SIBLE SITUATION, BECAUSE UNDER SECTION 12AA(3), THE REGISTRATION CAN ALWAYS BE CANCELLED B Y THE COMMISSIONER, IF HE IS SATISFIED THAT THE OBJECTS OF SUCH TRUST OR INSTITU TION ARE NOT GENUINE OR THE ACTIVITIES ARE NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECT S OF THE TRUST OR INSTITUTION. THE ONLY DRAWBACK IS THAT SUCH CANCELLATION WOULD OPERATE ON LY PROSPECTIVELY. THEREFORE, IF A VIEW IS TAKEN THAT NON-CONSIDERATION OF THE REGISTR ATION APPLICATION WITHIN THE TIME FIXED BY SECTION 12AA(2) WOULD AMOUNT TO DEEMED GRANT OF REGISTRATION, THE ONLY ADVERSE CONSEQUENCE LIKELY TO FLOW FROM SUCH A VIEW, IN RES PECT OF ANY CASE OF THAT ASSESSEE ARISING IN FUTURE WOULD, AT BEST, BE SOME LOSS OF R EVENUE FROM THAT INDIVIDUAL ASSESSEE FROM THE DATE OF EXPIRY OF THE LIMITATION UNDER SEC TION 12AA(3) TILL THE DATE OF CANCELLATION OF THAT REGISTRATION, IF SUCH CANCELLA TION IS CALLED FOR. [PARA 12] FOR THE INTERPRETATION OF A STATUTE, PURPOSIVE CONS TRUCTION' OF THE ENACTMENT, WHICH GIVES EFFECT TO THE LEGISLATIVE PURPOSE/INTENDMENT, IF NE CESSARY, MUST BE FOLLOWED AND APPLIED. [PARA 13] CONSIDERING THE PROS AND CONS OF THE TWO VIEWS, BY FAR THE BETTER INTERPRETATION WOULD BE TO HOLD THAT THE EFFECT OF NON-CONSIDERATION OF THE APPLICATION FOR REGISTRATION WITHIN THE TIME FIXED BY SECTION 12AA (2) WOULD BE DEEMED GRANT OF REGISTRATION. THERE IS NO GOOD REASON TO MAKE THE ASSESSEE SUFFER MERELY BECA USE THE INCOME-TAX DEPARTMENT IS NOT ABLE TO KEEP ITS OFFICERS UNDER CHECK AND CONTR OL, SO AS TO TAKE TIMELY DECISIONS IN SUCH SIMPLE MATTERS, SUCH AS CONSIDERATION OF APPLI CATIONS FOR REGISTRATION EVEN 'WITHIN THE LARGE SIX MONTHS PERIOD PROVIDED BY SECTION 12A A(2). ,[PARA 18] THEREFORE, THE WRIT PETITION WAS TO BE ALLOWED. [PA RA 20]. 5.6. IN VIEW OF THE AFORESAID FINDINGS AND JUDICIA L PRECEDENTS RELIED UPON HEREINABOVE, TO SUM UP, WE HOLD THAT :- (A) SUFFICIENCY OR SOME IRREGULARITIES IN BRINGING THE INITIAL CORPUS FUND WOULD NOT AUTOMATICALLY MAKE THE TRUST AS NOT TO HAVE COME IN TO EXISTENCE ; (B) THE CHARITABLE OBJECTS OF THE TRUST ARE NOT DISPUTE D BY THE LEARNED CIT ; (C) WHAT IS TO BE SEEN AT THE TIME OF GRANTING REGISTR ATION BY THE LEARNED CIT IS ONLY WHETHER THE OBJECTS OF THE TRUST ARE CHARITABL E AND ACTIVITIES CARRIED OUT ARE GENUINE IN NATURE , WHICH CONDITIONS HAVE BEEN DULY SATISFIED BY THE ASSESSEE IN THE INSTANT CASE ; (D) IN ANY CASE, THE ORDER PASSED BY THE LEARNED CIT RE FUSING REGISTRATION U/S 12AA OF THE ACT IS BEYOND THE STIPULATED PERIOD OF SIX MONTHS AS PER SECTION 12AA(2) OF THE ACT AND HENCE THE ASSESSEE CANNOT BE DENIED THE BENEFIT OF REGISTRATION U/S 12AA OF THE ACT . ITA NO.647/KOL/2013 M/S. BROADWAY CHARITABLE TRUST. 14 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE COURT ON 29.4.2016. SD/- SD/- [MAHAVIR SINGH] [M.BALAGANESH] JUDICIAL MEMBER ACCOUNTANT MEMBE R DATE: 29.4.2016. R.G.(.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . M/S. BROADWAY CHARITABLE TRUST, VILL : CHHATIMTALA, PO:CHAKDAHA, DIST.NADIA, PIN:741222. 2 THE C.I.T.- XXI, KOLKATA. 3 . DR, KOLKATA BENCHES, KOLKATA. TRUE COPY, BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES