SARVA SIDDHI RAJA GANPATHY TRUST, MUMBAI V. DDIT(E)1(2), MUMBAI

ITA 7676/MUM/2012

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8405 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 10 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-11-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 29-08-2016
• Assessment Year: 2012-2013
• Appeal Filed On: 27-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard
• Section: 80G; 12A; 12AA; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E, MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH , JUDICIAL MEMBER ITA NO. 7676/MUM/2012 : A.Y : 2012 - 13 SARVA SIDDHI RAJA GANAPATHY TRUST, BAJAN SAMAJ, GHATKOPAR COMPLEX, 90 FEET ROAD, GARODIA NAGAR, GHATKOPAR (E), MUMBAI 400 077 (APPELLANT) PAN : AAJTS6521P VS. D DIT (EXEMPTION) - 1(2) , MUMBAI (RESPONDENT) APPELLANT BY : SHRI MEHUL SHAH RESPONDENT BY : SHRI RAJESH DAMO R (CIT - DR) DATE OF HEARING : 2 2/ 08 /2017 DATE OF PRONOUNCEMENT : 10 /11/2017 O R D E R PER G.S. PANNU , AM : THE CAPTIONED APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 31.10.2012 PASSED BY THE DIRECTOR OF INCOME TAX (EXEMPTION) (IN SHORT THE DIRECTOR) UNDER SECTION 12A OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DENYING REGISTRATION TO THE ASSESSEE U/S 12A(1) OF THE ACT. 2. AT THE TIME OF HEARING, A PRELIMINARY POINT HAS BEEN RAISED, WHICH IS TO THE EFFECT THAT THE DIRECTOR HAS DENIED THE REGISTRATION FOR REASONS WHI CH ARE NOT JUSTIFIED INASMUCH AS THE SAME ARE MERE PROCEDURAL 2 ITA NO. 7676/MUM/2012 SARVA SIDDHI RAJA GANAPATHY TRUST ASPECTS AND THE SAME COULD HAVE BEEN CURED IF AN APPROPRIATE OPPORTUNITY WAS ALLOWED TO THE ASSESSEE. 3. IN BRIEF, THE RELEVANT FACTS ARE THAT THE APPELLANT IS A TRUST WHICH IS CONSTITUTED BY A TRUST DEED DATED 14.01.2005 AND IS REGISTERED WITH THE CHARITY COMMISSIONER, MUMBAI ON 31.10.2005 . IT APPLIED FOR REGISTRATION U/S 12A OF THE ACT WITH THE DIRECTOR ON 30.04.2012. A PERUSAL OF THE ORDER OF THE DIRECTOR REVEALS THAT THE REGISTRATION HAS B EEN REFUSED ON MULTIPLE GROUNDS, WHICH ARE SUMMARISED AS UNDER. FIRSTLY, THE DIRECTOR HAS NOTED THAT ASSESSEE DID NOT PRODUCE THE ORIGINAL PAN CARDS OF FIVE OUT OF EIGHT TRUSTEES; SECONDLY, THAT THE ASSESSEE DID NOT FURNISH COPIES OF THE BANK ACCOUNTS WIT H SUMMARY OF TRANSACTIONS FOR THE PERIOD 01.04.2010 TILL 30.09.2012 , THOUGH ASSESSEE HAD SUBMITTED COPIES OF THE LEDGER ACCOUNT SHOWING THE TRANSACTION THROUGH BANK; THIRDLY, AS PER THE DIRECTOR, THERE WAS AMBIGUITY ABOUT THE OWNERSHIP OF THE TEMPLE PREMIS ES AS WELL AS THE DEITIES O R THE IDOL, WHICH HAS NOT BEEN SATISFACTORILY EXPLAINED; FOURTHLY, THAT THERE WAS NO EXPLANATION AS TO WHEN THE TEMPLE PREMISES WERE BUILT AND THE TIME AND SOURCE OF THE ACQUISITION BY THE ASSESSEE; AND FINALLY, THAT CLAUSE (6) O F THE TRUST DEED DEALING WITH INVESTMENTS WAS NOT IN COMPLIANCE WITH THE REQUIREMENTS OF SEC. 11 OF THE ACT INASMUCH AS IT PERMITTED INVESTMENTS IN THE NAME OF THE TRUST OR TRUSTEES AND ALSO PERMITTED THE TRUSTEES TO INVEST THE TRUST FUNDS AS THEY MAY DEE M FIT . B ECAUSE OF THE FAILURE OF THE ASSESSEE TO FURNISH THE REQUISITE DETAILS AND CLAUSE (6) OF THE TRUST DEED NOT BEING IN CONFORMITY WITH THE PROVISIONS OF THE ACT, THE DIRECTOR REFUSED TO GRANT REGISTRATION TO THE ASSESSEE . 3 ITA NO. 7676/MUM/2012 SARVA SIDDHI RAJA GANAPATHY TRUST 4. BEFORE US, THE LEARNED REPRESENTATIVE VEHEMENTLY POINTED OUT THAT ALL THE INFIRMITIES POINTED BY THE DIRECTOR WERE CURABLE INASMUCH AS ASSESSEE WAS IN A POSITION TO PRODUCE THE PAN CARDS OF ALL THE REMAINING TRUSTEES AS ALSO THE COPIES OF THE BANK ACCOUNT WITH APPROPRIATE SUMMA RY. WITH REGARD TO THE OWNERSHIP OF THE PREMISES AND THE DEITIES OR IDOLS, IT WAS POINTED OUT THAT ASSESSEE - TRUST WAS FORMED TO PERFORM THE DAILY POOJA AND OTHER FUNCTION AND ALSO TO PREPARE PRASADAM FOR THE DEITIES AND DISTRIBUTE TO THE PUBLIC. THE TEMP LE PREMISES ALONGWITH DEITIES WAS CONSTRUCTED BY ANOTHER TRUST, NAMELY, BHAJAN SAMAJ, WHICH ENJOYS REGISTRATION U/S 12A OF THE ACT ( AND ALSO RECOGNITION U/S 80G OF THE ACT ) AND THAT ASSESSEE WAS NOT CONNECTED WITH THE STRUCTURE OR THE IDOLS OF THE TEMPLE. IT HAS BEEN POINTED OUT THAT BEFORE THE DIRECTOR , ASSESSEE EXPLAINED THAT ASSESSEE WAS OWNING CERTAIN HOLY EQUIPMENT SUCH AS SHREE RAMA SILVER MANDAP, SHREE GANAPATHY SILVER MANDAP, SILVER KAVACHAS, HUNDI BOXES, ETC, WHICH ARE REQUIRED AND ASSOCIATED WITH PERFORMING OF POOJA. WITH REGARD TO TIME OF ACQUISITION OF THE TEMPLE, THE LEARNED REPRESENTATIVE POINTED OUT THAT THE SAID OBJECTI ON IS NOT RELEVANT WHEN IT CAN BE APPRECIATED THAT THE TEMPLE PREMISES ALONGWITH THE DEITIES WERE CONSTRUCTED BY THE OTHER TRUST, NAMELY BHAJAN SAMAJ ; AND , INSOFAR AS CLAUSE (6) OF THE TRUST DEED IS CONCERNED, THE LEARNED REPRESENTATIVE POINTED OUT THAT ASSESSEE HA S ALREADY APPROACHED THE CHARITY COMMISSIONER , MUMBAI FOR CARRYING OUT APPROPRIATE ALTERATION IN THE TRUST DEED AN D HAS ALSO RECEIVED THE REQUISITE NO OBJECTION. IN THIS CONTEXT, IT IS POINTED OUT THAT ASSESSEES APPLICATION WAS PENDING BEFORE THE HON'BLE HIGH COURT TO CHANGE THE RELEVANT CLAUSE OF THE TRUST DEED AND THAT, IN ANY CASE, PRESENTLY NO INVESTMENTS ARE HELD IN THE NAME OF THE TRUSTEES, AN 4 ITA NO. 7676/MUM/2012 SARVA SIDDHI RAJA GANAPATHY TRUST ASPECT WHICH IS VERIFIABLE. BY POINTING OUT TO THE AFORESAID FEATURES, THE LEARNED REPRESENTATIVE SUBMITTED THAT ASSESSEE WOULD BE SATISFIED IF THE MATTER IS RESTORED BACK TO THE FILE OF THE DIRECTOR WHO MAY RE - APPRAIS E THE APPLICATION OF THE ASSESSEE SEEKING REGISTRATION U/S 12A OF THE ACT. 5. ON THE OTHER HAND, THE LD. DR APPEARING FOR THE REVENUE HAS MERELY PLACED RELIANCE ON THE ORDER OF THE DIRECTOR, WHICH WE HAVE ALREADY NOTED IN SUFFICIENT DETAIL AND IS NOT BEIN G REPEATED FOR THE SAKE OF BREVITY. HOWEVER, THERE IS NO OPPOSITION TO THE PLEA OF THE APPELLANT TO REMAND THE MATTER BACK TO THE FILE OF THE DIRECTOR. 6. SEC. 12AA OF THE ACT PRESCRIBES THE PROCEDURE FOR REGISTRATION OF A TRUST OR INSTITUTION. THE RELE VANT PROVISIONS EMPOWER THE DIRECTOR TO GRANT REGISTRATION AFTER SATISFYING HIMSELF ABOUT THE OBJECTS OF THE TRUST/INSTITUTION AND THE GENUINENESS OF ITS ACTIVITIES. IN ORDER TO REACH TO SUCH A CONCLUSION, THE DIRECTOR IS FURTHER EMPOWERED TO CALL FOR SUC H DOCUMENTS OR INFORMATION, WHICH HE THINKS NECESSARY IN ORDER TO SATISFY HIMSELF ABOUT THE GENUINENESS OF THE ACTIVITIES OF THE TRUST/INSTITUTION AND MAY ALSO MAKE SUCH INQUIRIES AS HE MAY DEEM NECESSARY IN THIS BEHALF. IN THE INSTANT CASE, THE REASONS W HICH HAVE BEEN SUMMED - UP BY THE DIRECTOR IN THE IMPUGNED ORDER HAVE BEEN ADDRESSED BY THE ASSESSEE BEFORE US, AND ON A PRIMA FACIE BASIS, THE SAME CANNOT BE CONSTRUED AS FATAL SO AS TO DENY THE REGISTRATION U/S 12A OF THE ACT TO THE ASSESSEE . BE THAT AS I T MAY, WHAT WE ARE TRYING TO POINT OUT IS THAT THE REASONS NARRATED BY THE DIRECTOR ARE SUCH WHICH COULD HAVE BEEN BETTER DEALT WITH AFTER SPECIFIC QUERIES WERE ADDRESSED TO THE ASSESSEE. EVEN WITH REGARD TO CLAUSE (6) OF THE TRUST DEED, IN TERMS OF WHICH THE DIRECTOR CONCLUDED THAT THE POWER TO INVEST THE TRUST FUNDS IS 5 ITA NO. 7676/MUM/2012 SARVA SIDDHI RAJA GANAPATHY TRUST INCONSISTENT WITH THE REQUIREMENTS OF THE ACT, A PERTINENT PLEA HAS BEEN SET - UP BY THE ASSESSEE THAT IT HAS TAKEN STEPS TO AMEND ITS TRUST DEED; AND, SECONDLY THAT IN ACTUALITY THE TRUST FUNDS ARE NOT INVESTED IN THE NAMES OF THE TRUSTEES AT ALL , AND THUS THERE IS NO VIOLATION OF THE ACT . 7. IN OUR CONSIDERED OPINION, CONSIDERING THE ENTIRETY OF FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE IN AGREEMENT WITH THE PLEA OF THE ASSESSEE FOR REM ANDING THE MATTER BACK TO THE FILE OF THE DIRECTOR FOR AFRESH EXAMINATION OF ASSESSEES CLAIM OF REGISTRATION U/S 12A OF THE ACT . NEEDLESS TO MENTION, THE DIRECTOR SHALL ALLOW THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD AND ONLY THEREAFTER PASS A N ORDER ON THE APPLICATION OF THE ASSESSEE SEEKING REGISTRATION IN ACCORDANCE WITH LAW. 8. BEFORE PARTING, WE MAY MAKE IT CLEAR THAT OUR DECISION TO REMAND THE MATTER BACK TO THE FILE OF THE DIRECTOR IS NO REFLECTION ON THE MERITS OF THE CASE, WHICH SHALL BE DECIDED BY THE DIRECTOR IN THE LIGHT OF THE REQUIREMENTS OF SEC. 12AA(1) OF THE ACT, AND OF COURSE BY KEEPING IN MIND THE MATERIAL AND EVIDENCE BEFORE HIM. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCE D IN THE OPEN COURT ON 1 0 T H NOVEMBER, 2017. SD/ - SD/ - (PAWAN SINGH) JUDICIAL MEMBER (G.S. PANNU) ACCOUNTANT MEMBER MUMBAI, DATE : 1 0 T H NOVEMBER, 2017 *SSL* 6 ITA NO. 7676/MUM/2012 SARVA SIDDHI RAJA GANAPATHY TRUST COPY TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R, E BENCH, MUMBAI 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR I.T.A.T, MUMBAI