LIFERAY FOUNDATION, COIMBATORE V. CIT (EXEMPTIONS), CHENNAI

ITA 885/CHNY/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5300 (ITAT-CHENNAI)
• Duration Of Justice: 1 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-04-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 13-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K JAYAGANESH
• Assessee Lawyers: S RAMACHANDRAN

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: CHENNAI , ! , ! & BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ ITA NO.885/CHNY/2018 LIFERAY FOUNDATION, 18, GRACE COTTAGE, PADMANABA NAGAR, CIVIL AERODROME POST, COIMBATORE-641 014. [PAN: AABTL 5693 H] VS. THE COMMISSIONER OF INCOME TAX (EXEMPTIONS), 121, M.G.ROAD, CHENNAI. ( ' /APPELLANT) ( ()' /RESPONDENT) ' * / APPELLANT BY : MR.S.RAMACHANDRAN, CA ()' * /RESPONDENT BY : MR.K. JAYAGANESH, JCIT * /DATE OF HEARING : 24.04.2018 * / DATE OF PRONOUNCEMENT : 24.04.2018 / O R D E R PER GEORGE MATHAN , JUDICIAL MEMBER : ITA NO.885/CHNY/2015 IS AN APPEAL FILED BY THE ASS ESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (EXEMPTIONS ), CHENNAI, IN FILE NO.CIT(E) 2(1094)/2017-18 DATED 27.02.2018 AGAINST THE REFUSAL GRANT REGISTRATION U/S.12AA OF THE ACT. 2. SHRI K. JAYAGANESH, JCIT, REPRESENTED ON BEHALF OF THE REVENUE AND SHRI S.RAMACHANDRAN, CA, REPRESENTED ON BEHALF OF THE ASSESSEE. ITA NO.885/CHNY/2018 :- 2 -: 3. IT WAS SUBMITTED BY THE LD.AR THAT THE ASSESSEE IS A TRUST SET UP BY A TRUST DEED DATED 22.05.2017, REGISTERED WITH THE SUB-REGISTRAR OFFICE, GANDHIPURAM, ON 22.05.2017. THE ASSESSEES TRUST H AD APPLIED FOR REGISTRATION U/S.12AA ON 24.08.2017. IT WAS A SUBM ISSION THAT CLARIFICATIONS HAD BEEN SOUGHT FROM THE ASSESSEE WH ICH WAS ALSO RESPONDED TO. IT WAS A SUBMISSION THAT SUBSEQUENTL Y, ON ACCOUNT OF THE INTERPRETATION IN REGARD TO CLAUSE-3(J) BEING ONE O F THE OBJECTS OF THE TRUST, THE LD.CIT HAD HELD THAT THE OBJECTS ARE TO BE CARRIED OUT IN INDIA ONLY AND AS THE SAID OBJECT PROVIDED FOR CARRYING O UT ITS OBJECTS OUTSIDE INDIA IT VIOLATED THE PROVISIONS OF SEC.11(1)(A). IT WAS A SUBMISSION THAT THE ASSESSEE HAD ALSO AMENDED ITS TRUST DEED AS FOL LOWS: (J) TO AWARD SCHOLARSHIPS OR STIPENDS TO INDIAN STU DENTS IN INDIA TO ENABLE THEM TO CONTINUE THEIR STUDIES EITHER IN INDIA OR ABROAD AN D TO AWARD PRIZES TO STUDENTS FOR PROFICIENCY IN ANY SUBJECT FOR LANGUAGE OR SPORTS O R HUMANITIES; THE UN-AMENDED CLAUSE READ AS FOLLOWS: TO AWARD SCHOLARSHIPS OR STIPENDS IN INDIA TO STUDE NTS TO ENABLE THEM TO CONTINUE THEIR STUDIES EITHER IN INDIA OR ABROAD AND TO AWAR D PRIZES TO STUDENTS FOR PROFICIENCY IN ANY SUBJECT FOR LANGUAGE OR SPORTS O R HUMANITIES; 4. IT WAS A SUBMISSION THAT IN FACT, CLAUSE-15(C) O F THE TRUST DEED READS AS FOLLOWS: (C) THE OBJECTS OF THE TRUST SHALL BE CARRIED OUT O NLY WITHIN INDIA AND THAT NO ACTIVITIES OF THE TRUST SHALL BE CARRIED OUT OUTSID E INDIA. 5. CLAUSE-5(C) - SPECIFICALLY BARRED ANY ACTIVITY T O BE CARRIED OUT OUTSIDE INDIA. IT WAS A SUBMISSION THAT THE ASSESS EE MAY BE GRANTED THE REGISTRATION U/S.12AA AS CLAIMED. ITA NO.885/CHNY/2018 :- 3 -: 6. IN REPLY, THE LD.DR VEHEMENTLY SUPPORTED THE ORD ER OF THE LD.CIT. 7. IT WAS A SUBMISSION THAT THE OBJECTS OF THE TRUS T PROVIDED FOR CARRYING OUT THE ACTIVITIES OUTSIDE INDIA, THE SAME WAS IN VIOLATION OF THE PROVISIONS OF SEC.11(1)(A) OF THE ACT AND CONSEQUEN TLY, THE REGISTRATION HAD BEEN RIGHTLY DENIED. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. 9. IN REPLY TO A SPECIFIC QUERY, AS TO WHETHER, AME NDMENT WHICH HAS BEEN DONE TO CLAUSE-3(J) OF THE TRUST DEED HAS BEEN DONE THROUGH COURT PROCEEDINGS OR NOT, IN LINE WITH THE CLAUSE-11 OF T HE TRUST DEED AT PAGE NO.25, THE LD.AR SUBMITTED THAT THE OBJECTS WERE AM ENDED ONLY BY GENERAL BODY MEETING AND NOT THROUGH COURT PROCEEDI NGS. AS THE AMENDMENT HAS NOT BEEN DONE THROUGH COURT PROCEEDIN GS, THE AMENDMENT TO CLAUSE-3(J) AS DONE BY THE ASSESSEE WO ULD BE INVALID AND CANNOT BE CONSIDERED. CONSEQUENTLY, THE UN-AMENDED PROVISION OF CLAUSE-3(J) IS ONLY CONSIDERED FOR THE PURPOSE OF A DJUDICATING AS TO WHETHER THE ASSESSEE IS ENTITLED TO REGISTRATION U/ S.12AA OF THE ACT. A PERUSAL OF THE UN-AMENDED PROVISION OF CLAUSE-3(J) OF THE TRUST DEED SHOWS THAT THE ASSESSEE COULD AWARD SCHOLARSHIPS OR STIPENDS IN INDIA TO STUDENTS TO ENABLE THEM TO CONTINUE THEIR STUDIES E ITHER IN INDIA OR ABROAD. NOWHERE IN THE SAID CLAUSE DOES IT SAY THA T THE SCHOLARSHIPS OR ITA NO.885/CHNY/2018 :- 4 -: STIPENDS ARE BEING PROVIDED ABROAD OR THAT THE OBJE CTS ARE BEING EXECUTED OUTSIDE THE COUNTRY. THE SCHOLARSHIPS OR STIPENDS ARE BEING AWARDED IN INDIA ONLY. EVEN IF THE STUDENT DESIRES TO STUDY A BROAD, IT CANNOT BE SAID THAT THE ASSESSEES OBJECT PROVIDED FOR APPLICATION OF THE INCOME OF THE TRUST OUTSIDE INDIA. FURTHER, A PERUSAL OF CLAUSE- 15(C) OF THE TRUST DEED CLEARLY BARS ANY ACTIVITY OF THE TRUST TO BE CARRIE D ON OUTSIDE INDIA. THIS BEING SO, WE ARE OF THE VIEW THAT THERE IS NO VIOLA TION OF THE PROVISIONS OF SEC.11(1)(A) OF THE ACT IN RESPECT OF THE TRUST DEE D OF THE ASSESSEE AND CONSEQUENTLY, THE ASSESSEE IS ENTITLED TO THE REGIS TRATION U/S.12AA OF THE ACT. CONSEQUENTLY, LD.CIT IS DIRECTED TO GRANT THE ASSESSEE THE BENEFIT OF REGISTRATION U/S.12AA AS PRAYED FOR. 10. THOUGH, WE HAVE GRANTED THE REGISTRATION U/S.12 AA OF THE TRUST, THE VIOLATIONS IN RESPECT OF SECS.11 TO 13 ARE VERY MUC H OPEN FOR EXAMINATION IN THE COURSE OF REGULAR ASSESSMENT. 11. IN THE RESULT, THE APPEAL FILED BY THE ASSESSE E IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON APRIL 24, 20 18, AT CHENNAI. SD/- SD/- ( ) ( S. JAYARAMAN ) ! /ACCOUNTANT MEMBER ( ) (GEORGE MATHAN) ! /JUDICIAL MEMBER ITA NO.885/CHNY/2018 :- 5 -: /CHENNAI, 2 /DATED: APRIL 24, 2018. TLN * (34 54 /COPY TO: 1. ' /APPELLANT 4. 6 /CIT 2. ()' /RESPONDENT 5. 4 ( /DR 3. 6 ( ) /CIT(A) 6. /GF