Usha-Panna Pitaliya Charitable Trust, Pune V. CIT-I, Pune

ITA 716/PUN/2013

• Counselvise Citation: 71624514 RSA 2013
• Duration Of Justice: 1 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 21-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K MODI
• Keywords: Charitable institution
• Section: 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHE B, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO.716/PN/2013 USHA-PANNA PITALIYA CHARITABLE TRUST, PANNA SR.NO.567, VASTUNAGAR SOCIETY, BIBWEWADI-KONDHWA ROAD, OPP. ZHALA COMPLEX, PUNE 411 037. PAN : AAATU4858L . APPELLANT VS. COMMISSIONER OF INCOME TAX-I, PUNE. . RESPONDEN T ASSESSEE BY : MR. SUHAS P. BORA DEPARTMENT BY : MR. A.K. MODI DATE OF HEARING : 02-04-2014 DATE OF PRONOUNCEMENT : 21-04-2014 ORDER PER G. S. PANNU, AM THE CAPTIONED APPEAL BY THE ASSESSEE IS DIRECTED AG AINST AN ORDER OF THE COMMISSIONER OF INCOME TAX-I, PUNE (IN SHORT T HE COMMISSIONER) DATED 26.02.2013 DECLINING THE GRANT OF REGISTRATION U/S 12AA(1)(B) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT). 2. IN BRIEF, THE FACTS ARE THAT THE ASSESSEE IS A T RUST SET UP ON 28.04.2012 AND WAS REGISTERED UNDER THE BOMBAY PUBLIC TRUST AC T, 1950 VIDE NOTIFICATION DATED 27.07.2012. ON 22.08.2012, ASSESSEE APPROACH ED THE COMMISSIONER IN PRESCRIBED FORM NO.10A SEEKING REGISTRATION U/S 12A OF THE ACT. THE COMMISSIONER HAS DENIED THE REGISTRATION ON THE GRO UND THAT THE ACTIVITIES IN RELATION TO THE OBJECTS OF THE TRUST WERE NOT START ED. AS PER THE COMMISSIONER, THOUGH THE OBJECTS OF THE ASSESSEE, AS PER THE MEMO RANDUM OF ASSOCIATION, ARE CHARITABLE IN NATURE BUT IN THE ABSENCE OF ANY ACTIVITY WHATSOEVER NO SATISFACTION COULD BE FORMED AS REGARDS THE GENUINE NESS OF THE ACTIVITIES AND THEREFORE HE DENIED REGISTRATION U/S 12A OF THE ACT . ITA NO.716/PN/2013 3. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT ONCE THE COMMISSIONER WAS OF THE OPINION THAT THE OBJECT S OF THE ASSESSEE TRUST ARE CHARITABLE IN NATURE, MERE ABSENCE OF STARTING OF THE ACTIVITIES CANNOT BE A GROUND TO DENY THE REGISTRATION U/S 12A OF THE ACT. IT IS POINTED OUT THAT THERE IS NO SUCH CONDITION PRESCRIBED IN SECTION 12AA(1) OF THE ACT WHICH WOULD REQUIRE THE ASSESSEE TO START HIS ACTIVITY AND ONLY THEREAFTER APPROACH THE COMMISSIONER FOR REGISTRATION U/S 12AA(1) OF THE AC T, AND THEREFORE THE COMMISSIONER ERRED IN DENYING REGISTRATION ON AN UN SUSTAINABLE GROUND. THE LEARNED COUNSEL ALSO POINTED OUT THAT IDENTICAL ISS UE HAS BEEN CONSIDERED BY THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF ADVIK FOUNDATION VS. CIT-V, PUNE VIDE ITA NO.1617 & 1618/PN/2011 DATED 24.06.20 13 IN FAVOUR OF THE ASSESSEE. 4. ON THE OTHER HAND, LEARNED CIT-DR HAS NOT CONTRO VERTED THE ASSERTION OF THE ASSESSEE THAT A SIMILAR ISSUE HAS BEEN DECID ED BY THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF ADVIK FOUNDATION (SUPRA ) IN FAVOUR OF THE ASSESSEE BUT HE HAS POINTED POINT OUT THAT A CONTRARY VIEW H AS BEEN EXPRESSED BY THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF AMAR SHIV MANDIR TRUST (REGD.) VS. CIT, (2008) 296 ITR 415 (P&H) AND ALSO BY THE HONBLE KERALA HIGH COURT IN THE CASE OF SELF EMPLOYERS SERVICES S OCIETY VS. CIT, (2001) 247 ITR 18 (KER). IN THIS MANNER, THE REASON ADVANCED BY THE COMMISSIONER TO DENY THE REGISTRATION HAS BEEN SOUGHT TO BE JUSTIFI ED. 5. IN REPLY, THE LEARNED COUNSEL SUBMITTED THAT THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF ADVIK FOUNDATION (SUPRA) HA S NOTED THE DIVERGENT VIEWS OF THE HIGH COURTS AND ULTIMATELY FOLLOWED THE JUDG EMENT OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. KUTCHI DA SA OSWAL MOTO PARIWAR AMBAMA TRUST VIDE TAX APPEAL NO.918/2011 ORDER DATE D 10.12.2012 AND DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. APART THEREFROM, IT HAS BEEN POINTED OUT THAT THE HONBLE DELHI HIGH COURT IN TH E CASE OF DIT VS. FOUNDATION ITA NO.716/PN/2013 OF OPHTHALMIC & OPTOMETRY RESEARCH EDUCATION CENTRE VIDE ORDER DATED 16.08.2012 HAS ALSO UPHELD A SIMILAR VIEW. IT IS S UBMITTED THAT IN VIEW OF THE CONTRARY VIEWS OF DIFFERENT HIGH COURTS AND IN THE ABSENCE OF ANY JUDGEMENT OF THE HONBLE JURISDICTIONAL HIGH COURT, A VIEW WHICH IS FAVOURABLE TO THE ASSESSEE BE PREFERRED, AS DONE BY THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF ADVIK FOUNDATION (SUPRA). 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. IN THE PRESENT CASE THE ONLY REASON WEIGHING WITH THE COMMISSIONER TO DENY REGISTRATION U/S 12AA OF THE ACT IS THE ABSENCE OF ANY OF THE ACTIVI TIES STATED IN THE MEMORANDUM OF ASSOCIATION. THE COMMISSIONER HAS NO T DOUBTED THAT THE OBJECTS OF THE ASSESSEE TRUST AS CONTAINED IN THE M EMORANDUM OF ASSOCIATION ARE CHARITABLE IN NATURE. SECTION 12AA OF THE ACT PRESCRIBES THE PROCEDURE FOR REGISTRATION, WHEREBY IT IS REQUIRED THAT THE COMMI SSIONER SHALL SATISFY HIMSELF ABOUT THE OBJECTS OF THE TRUST AND THE GENUINENESS OF ITS ACTIVITIES IN ORDER TO GRANT REGISTRATION. QUITE CLEARLY, THE PHRASEOLOGY OF SECTION 12AA OF THE ACT WHICH LAYS DOWN THE PROCEDURE FOR REGISTRATION DOES NOT CONTAIN ANY PROHIBITION THAT A TRUST OR INSTITUTION CANNOT SEEK REGISTRATIO N UNLESS IT STARTS ITS ACTIVITIES AS MANIFESTED ITS OBJECTS CLAUSE. THEREFORE, THE O BJECTION OF THE COMMISSIONER, IN OUR CONSIDERED OPINION, IS QUITE E XTRANEOUS TO THE STATUTORY PROVISIONS CONTAINED IN SECTION 12AA(1) OF THE ACT, WHICH GOVERN THE PROCEDURE OF REGISTRATION. THE PUNE BENCH OF THE T RIBUNAL IN THE CASE OF ADVIK FOUNDATION (SUPRA) HAS CONSIDERED A SIMILAR SITUATI ON AND FOLLOWING THE RATIO OF THE JUDGEMENT OF THE HONBLE DELHI HIGH COURT IN TH E CASE OF FOUNDATION OF OPHTHALMIC & OPTOMETRY RESEARCH EDUCATION CENTRE (S UPRA) AND THAT OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF KUTCHI DA SA OSWAL MOTO PARIWAR AMBAMA TRUST (SUPRA) NEGATED THE STAND OF THE REVEN UE DENYING REGISTRATION MERELY DUE TO THE ABSENCE OF ANY ACTIVITY BY THE TR UST. FOLLOWING THE SAID PRECEDENT, WHICH HAS BEEN RENDERED UNDER IDENTICAL CIRCUMSTANCES, WE ARE ITA NO.716/PN/2013 INCLINED TO DISAGREE WITH THE STAND OF THE COMMISSI ONER CONTAINED IN THE IMPUGNED ORDER. WE HOLD SO. 7. IN SO FAR AS THE RELIANCE PLACED BY THE LD. CIT- DR ON THE JUDGEMENT OF THE HONBLE KERALA HIGH COURT IN THE CASE OF SELF E MPLOYERS SERVICES SOCIETY (SUPRA) AND THAT OF THE HONBLE PUNJAB & HARYANA HI GH COURT IN THE CASE OF AMAR SHIV MANDIR TRUST (REGD.) (SUPRA) ARE CONCERNE D, OSTENSIBLY THE VIEWS EXPRESSED THEREIN ARE IN VARIANCE TO THE VIEWS EXPR ESSED BY THE HONBLE DELHI HIGH COURT IN THE CASE OF FOUNDATION OF OPHTHALMIC & OPTOMETRY RESEARCH EDUCATION CENTRE (SUPRA) AND ALSO BY THE HONBLE KA RNATAKA HIGH COURT IN THE CASE OF DIT (EXEMPTIONS) VS. MEENAKSHI AMMA ENDOWME NT TRUST, (2013) 354 ITR 219 (KARN). IN-FACT, THE HONBLE DELHI HIGH CO URT WHILE RULING IN FAVOUR OF THE ASSESSEE HAS CONSIDERED THE CONTRARY VIEWS EXPR ESSED BY THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF AMAR SHI V MANDIR TRUST (REGD.) (SUPRA) AND ALSO BY THE HONBLE KERALA HIGH COURT I N THE CASE OF SELF EMPLOYERS SERVICES SOCIETY (SUPRA), AND, THEREAFTER IT HAS ADOPTED THE VIEW EXPRESSED BY THE HONBLE KARNATAKA HIGH COURT IN TH E CASE OF MEENAKSHI AMMA ENDOWMENT TRUST (SUPRA) IN PREFERENCE TO THE V IEW OF THE HONBLE PUNJAB & HARYANA HIGH COURT AND THE HONBLE KERALA HIGH COURT. THE SAID JUDGEMENT OF THE HONBLE DELHI HIGH COURT HAS BEEN FOLLOWED BY THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF ADVIK FOUNDATI ON (SUPRA). BE THAT AS IT MAY, SINCE THERE ARE CONTRARY VIEWS OF DIFFERENT HI GH COURT AND IN THE ABSENCE OF ANY JUDGEMENT OF THE HONBLE JURISDICTIONAL HIGH COURT, WE DEEM IT FIT AND PROPER TO FOLLOW A VIEW WHICH IS FAVOURABLE TO THE ASSESSEE FOLLOWING THE PARITY OF REASONING LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. VEGETABLE PRODUCTS LTD., 88 ITR 192 (SC). 8. IN VIEW OF THE AFORESAID DISCUSSION, FOLLOWING T HE PRECEDENT BY WAY OF THE DECISION OF OUR CO-ORDINATE BENCH OF THE TRIBUN AL IN THE CASE OF ADVIK FOUNDATION (SUPRA), WE HOLD THAT THE COMMISSIONER W AS NOT JUSTIFIED IN ITA NO.716/PN/2013 DENYING REGISTRATION U/S 12AA OF THE ACT TO THE ASS ESSEE MERELY ON ACCOUNT OF NON-STARTING OF THE ACTIVITIES AS MANIFESTED BY THE OBJECTS OF THE MEMORANDUM OF ASSOCIATION OF ASSESSEE. ACCORDINGLY, NOTICING THAT THE OBJECTS AS PER THE MEMORANDUM OF ASSOCIATION OF THE ASSESSEE HAVE BEEN FOUND TO BE OTHERWISE CHARITABLE BY THE COMMISSIONER, WE SET-ASIDE THE IM PUGNED ORDER AND DIRECT HIM TO GRANT REGISTRATION TO THE ASSESSEE U/S 12AA OF THE ACT IN TERMS OF ITS APPLICATION DATED 22.08.2012. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST APRIL, 2014. SD/- SD/- (R.S. PADVEKAR) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 21 ST APRIL, 2014. SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT-I, PUNE; 4) THE DR B BENCH, I.T.A.T., PUNE; 5) GUARD FILE. BY ORDER //TRUE COPY// SR. PRIVATE SECRETARY I.T.A.T., PUNE