M/s. Swami Budhdev Bhakt Mandal Dharmik Trust, V. The CIT,

ITA 762/IND/2007

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1401 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 11 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 26-11-2009
• Assessment Year: misc
• Appeal Filed On: 13-12-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K K SINGH
• Assessee Lawyers: MANUBHAI PATEL
• Keywords: Opportunity of being heard; Additional evidence
• Section: 12AA; 12; 11

Judgement Text

- 1 - IN THE INCOME TAX APPELATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH AND SHRI V.K. GUPTA, AM ITA NO. 762/IND/07 SHREE SWAMI BUDDHA DEV BHAKAT MANDAL DHARMIK TRUST RATLAM APPELLANT VS. COMMISSIONER OF INCOMETAX UJJAIN RESPONDENT APPELLANT BY SHRI MANUBHAI PATEL, CA RESPONDENT BY SHRI K.K.SINGH, CIT DR O R D E R PER JOGINDER SINGH, JM THIS APPEAL IS BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX, UJJAIN, DATED 22.11.200 7 ON THE FOLLOWING GROUNDS :- 1. THE LEARNED COMMISSIONER OF INCOME TAX, UJJAIN, HAS ERRED IN LAW AS WELL S ON FACTS & CIRCUMSTANCES OF THE CA SE IN NOT GRANTING REGISTRATION TO THE APPELLANT TRUST U/S 12 A/12AA OF THE INCOMETAX ACT, 1961. - 2 - 2. THE LEARNED COMMISSIONER OF INCOME TAX, UJJAIN, HAS ERRED IN LAW AS WELL S ON FACTS & CIRCUMSTANCES OF THE CA SE IN HOLDING THAT SINCE THE TRUST DEED OF THE APPELLANT TRUST DID NOT CONTAIN PROVISION FOR DISSOLUTION OF THE TRUST, IT WAS NOT ENTITLED TO REGISTRATION U/S 12A/12AA OF THE IT ACT , 1961. 3. THE LEARNED COMMISSIONER OF INCOME TAX, UJJAIN, HAS ERRED IN LAW AS WELL S ON FACTS & CIRCUMSTANCES OF THE CA SE IN HOLDING THAT THE TRUST DEED OF THE APPELLANT TRUST DID NOT CONTAIN ANY CLAUSE TO THE EFFECT THAT INCOME OF THE PROPERTY OF THE APPELLANT TRUST ARE TO BE USED ONLY FOR THE OB JECTS OF THE TRUST. 4. THE LEARNED COMMISSIONER OF INCOME TAX, UJJAIN, HAS ERRED IN LAW AS WELL S ON FACTS & CIRCUMSTANCES OF THE CA SE IN HOLDING THAT AT THE TIME OF GRANTING OF REGISTRATIO N U/S 12A/12AA OF THE IT ACT, 1961, APPLICABILITY OF PROV ISIONS OPF SECTION 13(1)(B) AND 13(1)(C) OF THE IT ACT, 19 61 ARE REQUIRED TO BE CONSIDERED. 5. THE LEARNED COMMISSIONER OF INCOME TAX, UJJAIN, HAS ERRED IN LAW AS WELL S ON FACTS & CIRCUMSTANCES OF THE CA SE IN HOLDING THAT THE APPELLANT TRUST HAS NOT FILED COPI ES OF ACCOUNTS OF LAST THREE YEARS ALONGWITH THE APPLICAT ION FOR REGISTRATION U/S 12A/12AA OF THE IT ACT, 1961. 6. THE LEARNED COMMISSIONER OF INCOME TAX, UJJAIN, HAS ERRED IN LAW AS WELL S ON FACTS & CIRCUMSTANCES OF THE CA SE IN NOT CONSIDERING APPLICATION DATED 22.05.2007 FOR CONDON ATION OF DELAY IN FILING THE APPLICATION FOR REGISTRATION U/ S 12A/12AA OF THE IT ACT, 1961. 2. DURING HEARING OF THIS APPEAL, WE HAVE HEARD SHR I MANUBHAI PATEL, LEARNED COUNSEL FOR THE ASSESSEE AND SHRI K.K. SING H, LEARNED CIT DR. MR. PATEL INVITED OUR ATTENTION TO THE OBSERVATION OF THE LEARNED COMMISSIONER OF INCOMETAX TO THE FACT THAT THE REPO RT WAS NOT FILED BY - 3 - THE ASSESSEE WHICH WAS CLAIMED TO BE FACTUALLY INCO RRECT BY PLEADING THAT THE AUDITORS REPORT WAS DULY FILED BEFORE THE LEAR NED COMMISSIONER OF INCOMETAX FOR WHICH OUR ATTENTION WAS INVITED TO PA GE 25 ONWARDS OF THE PAPER BOOK. IT WAS ALSO PLEADED THAT THE RECEIPT A ND PAYMENT ACCOUNT WAS ALSO DULY FILED BY THE ASSESSEE WHICH IS DULY S IGNED BY THE AUDITOR. OUR ATTENTION WAS ALSO INVITED TO THE LANGUAGE OF S ECTION 12AA OF THE ACT. A PLEA WAS ALSO RAISED THAT THE ASSESSEE IS S UPPOSED TO FILE APPLICATION AS PER SECTION 10A OF THE ACT. IT WAS PLEADED THAT THE NECESSARY CONDITIONS REQUIRED FOR GRANT OF REGISTRA TION WERE DULY FULFILLED BY THE ASSESSEE. AS FAR AS THE OBJECTS OF THE ASSE SSEE TRUST ARE CONCERNED, IT WAS CONTENDED THAT IT IS PURELY A RELIGIOUS TRUS T. OUR ATTENTION WAS ALSO INVITED TO THE ORDER OF THE TRIBUNAL IN ITA NO. 615 /IND/07 (PAGE 42). IT WAS PLEADED THAT ALL THE GROUNDS MAY BE SENT TO THE FILE OF THE LEARNED COMMISSIONER OF INCOMETAX FOR FRESH ADJUDICATION. ON THE OTHER HAND, THE LEARNED CIT DR PLEADED THAT EVEN IN THE ADDITIONAL EVIDENCE FILED BEFORE THE TRIBUNAL, NO B ALANCE SHEET HAS BEEN ENCLOSED AND MERELY COMPUTATION OF TOTAL INCOME AND FIXED ASSETS HAS BEEN FILED. IT WAS PLEADED THAT THERE IS NO CLAUSE IN THE TRUST DEED ABOUT DISSOLUTION OF THE TRUST. THE IMPUGNED ORDER WAS D EFENDED BY FURTHER SUBMITTING THAT PROPER DOCUMENTS WERE NOT FILED BY THE ASSESSEE. THE - 4 - ASSERTION OF THE ASSESSEE THAT THE APPEAL MAY BE RE MANDED BACK TO THE FILE OF THE LEARNED COMMISSIONER OF INCOMETAX WAS NOT OBJECTED TO BY THE LD. CIT DR SO THAT THE TRUE FACTS CAN BE ASCERT AINED. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD. WE HAVE ALSO PERUSED THE ORDER OF THE TRIBUNAL IN ITA NOS. 615/IND/07 TO 635/IND/07 DATED 28.3.2008 ON IDENTICAL FACTS. AT PAGES 42 AND 43 IT WAS HELD AS UNDER :- 30. WE MAY ALSO NOTE THAT THOUGH THE LD. CIT CALLED FOR THE EXPLANATION OF THE ASSESSEE ON THE ISSUE OF NON-MENTIONING OF THE CLAUSE THAT THE RECEIPTS OF THE TRUST WILL BE USED FOR THE OBJECTS OF THE TRUST AND ON DISSOLUTION OF THE TRUST, WHAT WILL HAPPEN TO THE PROPERTIES OF THE TRUST, YET DID NOT GIVE ANY FINDING ON THESE ISSUES. WE MAY NOTE THAT AS PER SECTION 11 OF THE IT ACT, 1961, THE INCOME OF THE TRUST WOULD NOT FORM PART OF THE TOTAL INCOME WHEN THE SAME WAS APPLIED TO ITS OBJECTS AND PURPOSES. SIMILARLY, AS PER SECTION 14 OF THE M.P. - 5 - PUBLIC TRUSTS ACT, THE PREVIOUS SANCTION OF THE REGISTRAR IS REQUIRED IN CASE OF SALE, ETC.OF PROPERTY BELONGING TO A PUBLIC TRUST. AS PER SECTION 27(2)(D) OF THE SAME ACT, THE COURT CAN PROVIDE SCHEME OF MANAGEMENT OF THE TRUST PROPERTY. LIKEWISE, THE SAFEGUARD IS PROVIDED BY EMPOWERING THE A,O, IN THIS REGARD IN SECOND PROVISO TO SECTION 11(3A) OF THE IT ACT. THESE ARE THE SUFFICIENT SAFEGUARDS PROVIDED UNDER THE IT ACT AS WELL AS UNDER THE MP PUBLIC TRUSTS ACT THEREFORE EVEN THOUGH THE LD. CIT DID NOT DECIDE THESE ISSUES BUT HER APPREHENSION IN THE SHOW CAUSE NOTICE WAS MISCONCEIVED. 31. IN VIEW OF THE ABOVE FINDINGS, WE ARE OF THE VIEW THAT THE ASSESSEE IS A PUBLIC RELIGIOUS TRUST AND THAT THE ACTION OF THE CIT IN REFUSING TO GRANT REGISTRATION TO THE ASSESSEE TRUST ON THE GROUND OF VIOLATION OF PROVISIONS OF SECTIONS 13(1)(B) AND 13(1)(C) - 6 - OF THE ACT IS NOT JUSTIFIED ESPECIALLY WHEN THE LD. CIT HAD NOT DOUBTED EITHER THE NATURE OF ITS OBJECTS OR GENUINENESS OF THE ACTIVITIES OF THE TRUST. IN THIS VIEW OF THE MATTER, WE SET SIDE THE IMPUGNED ORDER AND DIRECT THE LD. CIT, UJJAIN, TO GRANT REGISTRATION TO THE ASSESSEE TRUST UNDER SECTION 12A/12AA OF THE INCOMETAX ACT. IN THE LIGHT OF THE ASSERTION MADE BY THE LEARNED R ESPECTIVE COUNSELS, FACTS BEFORE US AND THE AFORESAID DECISION OF THE T RIBUNAL, WE REMAND THE GROUND RAISED BY THE ASSESSEE TO THE FILE OF THE LE ARNED COMMISSIONER OF INCOMETAX FOR FRESH ADJUDICATION IN ACCORDANCE WITH LAW. NEEDLESS TO MENTION HERE THAT DUE OPPORTUNITY OF BEING HEARD BE PROVIDED TO THE ASSESSEE. THE ASSESSEE IS ALSO AT LIBERTY TO FURNI SH EVIDENCE, IF ANY, TO SUBSTANTIATE ITS CLAIM. THE ASSESSEE HAS ALSO SUBMI TTED ADDITIONAL EVIDENCE FOR CONSIDERATION. THESE ADDITIONAL EVIDEN CES ARE ADMITTED. THE LEARNED COMMISSIONER OF INCOMETAX IS ALSO DIRE CTED TO CONSIDER THE ADDITIONAL EVIDENCE FILED BEFORE US SO THAT THE FAC TS MAY BE APPRECIATED IN THE REQUIRED MANNER AND NO GRIEVANCE IS CAUSED T O EITHER SIDE. - 7 - 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT IN THE PRESENT OF B OTH THE SIDES AT THE CONCLUSION OF THE HEARING ON 26 TH NOVEMBER, 2009. (V.K. GUPTA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER NOVEMBER 26, 2009. COPY TO APPELLANT, RESPONDENT, CIT, CIT(A), DR DN/V