Shri Sadhna Education Trust, V. The Commissioner of Income Tax, JAMNAGAR

ITA 81/RJT/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4365 (ITAT-RAJKOT)
• Duration Of Justice: 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-04-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 09-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANKUR GARG N P
• Assessee Lawyers: CHETAN AGARWAL E N
• Keywords: Charitable institution
• Section: 12AA

Judgement Text

P , IN THE INCOME TAX APPELLATE TRIBUNAL; RAJKOT BENCH, RAJKOT. BEFORE SHRI T. K. SHARMA, JM AND SHRI D. K. SRIVASTAVA, AM ITA NO.81/RJT/2013 SHRI SADHNA EDUCATION TRUST, AT LALOI, TA - JAMJODHPUR JAMNAGAR PAN: AA ITS5756P ( F/ APPELLANT) VS. CIT, RANGE - 3 JAMNAGAR VSF/ RESPONDENT AI\N / ASSESSEE BY SHRI CHETAN AGARWAL, E N / REVENUE BY SHRI ANKUR GARG, N P /DATE OF HEARING 17.04.2013 N P / DATE O F PRONOUNCEMENT 18. 04.2013 / ORDER I.. E , R / T. K. SHARMA, J. M . THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER DATED 26.10.2012 OF CIT, JAMNAGAR REFUSING TO GRANT REGISTRATION SOUGHT BY THE TRUST U/S 12AA OF THE INCOME TAX ACT, 1961. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSESSEE TRUST W A S CREATED ON 29.11.2008 BY A TRUST DEED. SUBSEQUENTLY, THIS TRUST WAS GOT REGISTERED WITH CHARITY COMMISSIONER, JAMNAGAR ON 20.5.2009 . IT APPLIED FOR REGISTRAT ION U/S 12A(A) TO COMMISSIONER OF INCOME TAX , JAMNAGAR ON 0 2. 0 4.2012. WHILE PROCESSING APPLICATION OF THE ASSESSEE TRUST, THE LD. CIT, JAMNAGAR CALLED REPORT FROM THE CONCERNED AO. THE CONCERNED AO OF THE RANGE JOINT CIT HAS RECOMMENDED THE RE GISTRATION U/S 12AA OF THE ACT. HOWEVER, THE LD. CIT OBSERVED THAT TRUST DEED DID NOT CONTAIN THE PROVISIONS TO THE EFFECT THAT IN CASE OF DISSOLUTION OF TRUST, AFTER MEETING ALL THE EXISTING LIABILITIES OF THE TRUST, THE TRUST PROPERTIES/FUND WILL BE T RANSFERRED TO A TRUST HAVING SIMILAR OBJECTS. THEREFORE, THE LD. CIT ISSUED SHOW CAUSE NOTICE TO THE TRUST ON 15.10.2012 WHEREBY IT ASKED THE ASSESSEE TO PRODUCE THE PROOF OF ACTIVITY AND COPY OF THE TRUST DEED FOR VERIFICATION AND WAS REQUESTED TO EXPLAIN AS TO WHY THE APPLICATION FOR REGISTRATION SHOULD NOT BE REJECTED ON THE ABOVE MENTIONED GROUND . IT ITA NO.81/RJT/2013 2 APPEARS THAT THE TRUST HAS NOT COMPLIED WITH THE SAID NOTICE, THEREFORE, THE LD. CIT HAS REFUSED THE REGISTRATION U/S 12AA OF THE ACT. AGGRI EVED WITH THE SAID REFUSAL, THE ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL ON THE FOLLOWING GROUND: 1. HON. CIT ERRED IN LAW AS WELL ON FACT IN REFUSING TO GRANT REGISTRATION U/S 12AA OF THE ACT ON WRONG APPRECIATION OF FACT THAT THE TRUST DEED DO NOT C ONTAIN PROVISIONS TO THE EFFECT THAT IN THE CASE OF DISSOLUTION OF THE TRUST, AFTER MEETING ALL THE EXISTING LIABILITIES OF THE TRUST, THE TRUST PROPERTIES/FUND WILL BE TRANSFERRED TO A TRUST HAVING SIMILAR OBJECTS 3. AT THE TIME OF HEARING, ON BEHALF OF THE ASSESSEE SHRI CHETAN AGARWAL APPEARED AND PRODUCE D THE TRUST DEED WHICH EXPLICITLY CONTAINED THE PROVISION AT PAGE NO.6 AT PARAGRAPH 7 OF THE TRUST DEED THAT IN CASE OF DISSOLUTION OF THE TRUST, TH A N THE MOVABLE AND IMMOVABLE ASSETS OF THE TRUST SHALL BE SOLD/TRANSFERRED/AUCTIONED AS PER THE PROVISIONS OF THE BOMBAY CHARITABLE TRUST ACT, 1950. THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT IN VIEW OF THIS IT WAS NOT NECESSARY THAT THE TRUST DEED SHOULD CONTAIN THE PROVISIONS TO THE EFFECT TH AT IN CASE THE ASSESSEE - TRUST IS DISSOLVED, AFTER MEETING ALL THE EXISTING LIABILITIES OF THE TRUST , THE TRUST PROPERTY/FUNDS WILL BE TRANSFERRED TO THE TRUST HAVING SIMILAR OBJECT. AS AGAINST THIS, SHRI ANKUR GARG, THE LD. DR APPEARED ON BEHALF OF THE REVENUE POINTED OUT THAT SINCE NO COMPLIANCE WAS MADE BEFORE THE LD.CIT, THEREFORE, THE VIEW TAKEN BY THE LD. CIT, JAMNAGAR REFUSING TO GRANT REGISTRATION U/S 12AA BE UPHELD. 4. IN REJOINDER, THE LD. COUNSEL FOR THE ASSESSEE POINTED OUT THAT ONLY ONE NO TICE OF HEARING WAS ISSUED, THEREAFTER, IN THE INTEREST OF JUSTICE, THE LD. CIT, JAMNAGAR BE DIRECTED TO ASK TO ALLOW ONE MORE OPPORTUNITY TO THE ASSESSEE TO MAKE COMPLIANCE. HE ALSO POINTED OUT THAT NECESSARY AMENDMENT IN TRUST DEED IF REQUIRED SHALL BE MADE IF ONE MORE OPPORTUNITY IS ALLOWED TO ASSESS E E - TRUST. 5. WE HAVE CAREFULLY GONE THROUGH THE ORDER OF LOWER AUTHOR ITY . IT IS PERTINENT TO NOTE THAT THE LD. CIT, JAMNAGAR ISSUED ONLY ONE NOTICE TO THE ASSESSEE WHICH WAS NOT COMPLIED. WE, THEREF ORE, IN THE INTEREST OF ITA NO.81/RJT/2013 3 JUSTICE SET ASIDE THE IMPUGNED ORDER OF THE LD. CIT AND DIRECT THE ASSESSEE TO MAKE NECESSARY COMPLIANCE BEFORE THE LD. CIT, JAMNAGAR, THEREAFTER THE LD. CIT, JAMNAGAR WILL PASS APPROPRIATE ORDER U/S 12AA OF THE ACT AFTER GIVING OP PORTUNITY OF BEING HEARD TO THE ASSESSEE . 6 . IN THE RESULT, FOR STATISTICAL PURPOSE, THE APPEAL OF THE ASSESSEE IS ALLOWED . THIS ORDER IS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED HEREINABOVE. SD SD ( .. UE / D. K. SRIVASTAVA) ( P.. I / T. K. SHARMA) MAKE / ACCOUNTANT MEMBER A E / JUDICIAL MEMBER / ORDER DATE 18. 4. . 201 3 . /RAJKOT SRL RJO EO / COPY OF ORDER FORWARDED TO: - 1. F / APPELLANT - 2. VSF / RESPONDENT - 3. T / CONCERNED CIT , 4. T - / CIT (A) , 5. VAA, P , / DR, ITAT, RAJKOT . I / GUARD FILE. / BY ORDER , TRUE COPY SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL, RAJKOT.