Gujarat State Secondary & Higher Secondary School Administrative Employee Sangh Mahamandal, Modasa V. The DIT(Exemp), Ahmedabad

ITA 920/AHD/2013

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8919 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 16-03-2017
• Assessment Year: misc
• Appeal Filed On: 04-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R.I. PATEL
• Keywords: Charitable institution
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH (BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER) ITA. NO: 920/AHD/2013 (BLOCK PERIOD: N.A.) GUJARAT STATE SECONDARY & HIGHER SECONDARY SCHOOL, ADMINISTRATIVE EMPLOYEE SANGH MAHAMANDAL J.B. SHAH ENGLISH MEDIUM SCHOOL COLLEGE CAMPUS,MODASA-383315 V/S THE DIT(EXEMPTION), AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AAAAG3295N APPELLANT BY : SHRI S. N. DIVETIA, AR RESPONDENT BY : SHRI R.I. PATEL, CIT/ DR ( )/ ORDER DATE OF HEARING : 16 -03-201 7 DATE OF PRONOUNCEMENT : 20 -03-2017 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. DIT(EXEMPTION), AHMEDABAD DATED 19.02.2013. ITA NO.920/A HD/2013 . B.P. N.A. 2 2. THE SUM AND SUBSTANCE OF THE GRIEVANCE OF THE ASSES SEE IS THAT THE LD. DIT(EXEMPTION) ERRED IN REJECTING THE APPLICATION F OR REGISTRATION U/S. 12AA OF THE ACT. 3. RIVAL CONTENTIONS WERE HEARD AT LENGTH. AFTER HEARI NG THE RIVAL SUBMISSIONS, WE HAVE CAREFULLY PERUSED THE ORDER OF THE LD. DIT( EXEMPTION). 4. WHILE EXAMINING THE CLAIM OF REGISTRATION U/S. 12AA OF THE ACT, THE DIT(EXEMPTION) OBSERVED AS UNDER:- 4. IT IS FOUND THAT THERE IS NO PROPER DISSOLUTIO N CLAUSE IN THE TRUST DEED. FURTHER, IT IS ALSO NOTICED THAT TRUST DOES N OT HAVE ANY CLAUSE THAT THE TRUST WILL NOT BE DISSOLVED AND IT IS PERP ETUAL. AS PER THE BOMBAY PUBLIC TRUST ACT AND SETTLED POSITION OF LAW , A TRUST IS A PERPETUAL TRUST. IN CASE THE ACTIVITIES OF THE TRUS T CANNOT BE CARRIED OUT, THE SAME, WITH THE SANCTION OF CHARITY COMMISS IONER AND AS PER THE PROCEDURES OF THE BOMBAY PUBLIC TRUST ACT, THE ASSETS ETC. HAVE TO BE TRANSFERRED TO ANOTHER TRUST CARRYING ON SIMILAR ACTIVITIES. NO SUCH CLAUSE IS THERE IN THE DEED AND THEREFORE, THE APPR OVAL IS DENIED. 5. AND THE DIT(EXEMPTION) FINALLY OBSERVED AS UNDER:- 6. IN VIEW OF THE ABOVE, IT IS CLEAR AMALGAMATION POWERS CANNOT BE GIVEN TO THE TRUSTEES. AS PER THE BOMBAY PUBLIC TRU ST ACT AND SETTLED POSITION OF LAW, A TRUST IS A PERPETUAL TRUST. IN C ASE THE ACTIVITIES OF THE TRUST CANNOT BE CARRIED OUT, THE SAME, WITH THE SAN CTION OF CHARITY ITA NO.920/A HD/2013 . B.P. N.A. 3 COMMISSIONER AND AS PER THE PROCEDURES OF THE BOMBA Y PUBLIC TRUST ACT, THE ASSETS ETC. HAVE TO BE TRANSFERRED TO ANOT HER TRUST CARRYING ON SIMILAR ACTIVITIES. NO SUCH CLAUSE IS THERE IN THE DEED. 6. THEREFORE, IN VIEW OF THE ABOVE REGISTRATION U/S. 1 2AA OF THE ACT WAS DENIED BY THE DIT(EXEMPTION). 7. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE VEHEMEN TLY STATED THAT WHILE GRANTING REGISTRATION U/S. 12AA OF THE ACT, THE LD. DIT(EXEMPTION) CAN ONLY EXAMINE WHETHER THE TRUST IS FOR CHARITABLE PURPOSE OR NOT. THEREFORE, THE ACTION OF THE LD. DIT(EXEMPTION) IS IN VIOLATION TO THE PROVISIONS OF SECTION 12AA OF THE ACT. THE LD. D.R. RELIED UPON THE FINDI NGS OF THE DIT(EXEMPTION). 8. WE HAVE CAREFULLY PERUSED THE ORDER OF THE LD. DIT( E) QUA THE ISSUE. THERE IS NO DISPUTE SO FAR AS THE OBSERVATIONS OF THE DIT(E) IS CONCERNED SO FAR AS IT RELATES TO THE DISSOLUTION CLAUSE IN THE TRUST DEED . 9. IN OUR CONSIDERED OPINION, IF THE ASSESSEE INSERTS A PROPER DISSOLUTION CLAUSE IN ITS TRUST DEED, THE LD. DIT(E) SHOULD NOT HAVE ANY OBJECTION IN GRANTING REGISTRATION U/S. 12AA OF THE ACT. WE, ACC ORDINGLY, DIRECT THE ASSESSEE TO MAKE SUITABLE AMENDMENTS IN ITS TRUST D EED AND FILE THE SAME BEFORE THE DIT(EXEMPTION) AND THE DIT(EXEMPTION) IS DIRECTED TO DECIDE THE ISSUE AFRESH AFTER CONSIDERING THE AMENDED TRUST DE ED AND AFTER GIVING A REASONABLE AND SUFFICIENT OPPORTUNITY OF BEING HEAR D TO THE ASSESSEE. ITA NO.920/A HD/2013 . B.P. N.A. 4 10. IN THE RESULT, THE APPEAL FILED BY ASSESSEE IS TREA TED AS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON 20 - 03- 20 17 SD/D- SD/- (RAJPAL YADAV) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY ACCOUNTANT MEMBER AHMEDABAD: DATED 20/03/2017 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD