Farohar Global Foundation, Bangalore V. CIT, Bangalore

ITA 96/BANG/2015

• Counselvise Citation: 9621114 RSA 2015
• Duration Of Justice: 6 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 27-08-2015
• Assessment Year: misc
• Appeal Filed On: 02-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEERA MALHOTRA
• Assessee Lawyers: SATISH R MODY
• Section: 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TR IBUNAL BANGALORE BENCH A, BANGALORE BEFORE SMT. ASHA VIJAYARAGHAVAN, JM AND SHRI S. RIFAUR REHMAN, AM ITA NO.96(B)/2015 FAROHAR GLOBAL FOUNDATION, C/O VIBGYOR HIGH , SURVEY NO.66, 4 TH MAIN ROAD, N.S.PALYA, BANNERGHATTA ROAD, BANGALORE-560 076 PAN NO.AAATF3885C APPELLANT VS THE COMMISSIONER OF INCOME-TAX(EXEMPTN.) CR BUILDINGS, 3 RD FLOOR,, QUEENS ROAD, BANGALORE RESPONDENT ASSESSEE BY : SHRI SATISH R MODY, ADVOCATE REVENUE BY : SMT NEERA MALHOTRA, CIT DATE OF HEARING : 27-08-2015 DATE OF PRONOUNCEMENT : 31-0 8-2015 O R D E R PER SMT ASHA VIJAYARAGHAVAN, JM: THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(EXEMPTION), BANGALORE DATED 10-12-2014 PASSED U/S 12AA(1)(B)(II) OF THE IT ACT, 1961, WHEREIN THE APPLICATION FOR REGISTRATION OF THE TRUST WAS REJECTED. 2. THE APPLICANT M/S FAROHAR GLOBAL FOUNDATION HAS FILED AN APPLICATION ON 03-06-2014 FOR REGISTRATION U/S 12A OF THE IT AC T, 1961. THE APPLICANT WAS ITA NO.96(BANG)2015 2 ISSUED A LETTER DATED 18-11-2014 REQUESTING TO FURN ISH DETAILS/CLARIFICATION BY THE CIT(EXEMPT.). SUBSEQUENTLY, SOME DETAILS WERE FURNI SHED BY THE APPLICANT, HOWEVER, THE CIT(EXEMPTN.) HELD THAT THE APPLICANT DID NOT FURNISH THE FOLLOWING DETAILS; A) PROVISIONAL ACCOUNTS FOR THE YEAR ENDED 31/03/2 014 B) INCONSISTENCE IN TRUST DEED IN RESPECT OF (A) A REA OF OPERATION PARA(4)(A) AT PAGE 9(B) IRREV OCABILITY CLAUSE (C) DISSOLUTION CLAUSE- PAGE26 C) SHOW CAUSE AS TO WHY YOUR TRUST SHOULD NOT BE T REATED AS RELIGIOUS & RESTRICTED ONE IN VIEW O F CLAUSES (A)4(A),(B) 9 AT PAGE 13. 3. THE CIT(EXEMPTN.) HELD THAT IN THE ABSENCE OF R ELEVANT DETAILS, IT IS NOT POSSIBLE TO VERIFY THE GENUINENESS OF THE OBJECTS A ND ACTIVITIES OF TRUST AND BY PLACING RELIANCE ON CERTAIN DECISIONS HELD AS FOLLO WS; THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF G ANJAM NAGAPPA & SON TRUST VS DIT(E) REPORTED IN 269 ITR 5 9 HAVE HELD THAT GRANT OF EXEMPTION OR RENEWAL IS NOT AUT OMATIC IN CHARACTER. IT IS SUBJECT TO THE SATISFACTION OF THE AUTHORITY WITH REGARD TO CHARITABLE CHARACTER AND WITH REGARD TO T HE APPLICANTS ACTIVITIES IN TERMS OF SEC.80G R.W.R.11AA ONLY ON B EING SATISFIED, REGISTRATION OR RENEWAL IS PERMISSIBLE. HONBLE KERALA HIGH COURT IN THE CASE OF SELF EMPL OYEES INSTITUTION VS CIT REPORTED IN 247 ITR 18 HAS HELD THAT WHERE THERE IS NO MATERIAL BEFORE THE COMMISSIONER TO BE SATISFIED OF THE GENUINENESS OF THE ACTIVITIES OF THE TRUST IS A VALID REASON FOR REJECTION. ITA NO.96(BANG)2015 3 THE HONBLE ITAT, BANGALORE IN THE CASE OF DBA INS TITUTION VIE ITS ORDER IN ITA NO.667(B)/08 DATED 27-01-2009, HAS HELD THAT THE DIT(E) WAS WITHIN HIS JURISDICTION TO REJE CT THE APPLICATION OF THE ASSESSEE TRUST FOR GRANT OF REGI STRATION UNDER SECTION 12AA SINCE THE APPLICANT TRUST COULD NOT S UBSTANTIATE ITS CLAIM BY BRINGING OUT THE CARRYING ON OF CHARITABLE ACTIVITY & PROCEEDED TO UPHOLD THE ORDER OF THE DIT(E) IN REJE CTING THE APPLICATION U/S 12AA. 4. FURTHER, IT APPEARS THAT THE APPLICANT IS NOT IN TERESTED IN PROSECUTION OF THIS APPLICATION AND THEREFORE, DESERVES TO BE DISM ISSED ON THIS ACCOUNT ALONE. THE LAW ASSISTS THOSE WHO ARE VIGILANT AND NOT THOS E WHO SLEEP OVER THEIR RIGHTS. THIS PRINCIPLE IS EMBEDDED IN THE WELL KNOWN DICTUM VIGILANUS NON- DORMENTIBUSJURA-SUBVENIUNT. COURTS IN SEVERAL CASE S HAVE UPHELD THIS DI8CTUM. LACK OF DILIGENCE AND FOLLOW UP ON THE PART OF THE ASSESSEE HAS BEEN FROWNED UPON BY VARIOUS COURTS ASUNDER; A) 106 ITR 653(SC) (B) 118 ITR 461(SC) C) 286 ITR 688 (MP) (D) 257 ITR 301(DEL.)& E) 130 TAXMAN 61 (MAD.) 5. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 6. THE LEARNED COUNSEL FOR THE ASSESSEE SHRI SATIS H MODY, ADVOCATE SUBMITTED BEFORE THE BENCH THAT THE ASSESSEE HAD PR OVIDED THE PROVISIONAL ACCOUNTS FOR THE YEAR ENDED 31-03-2014 IN THE PAPER BOOK BEFORE US WHICH WAS ALSO PRODUCED BEFORE THE CIT(EXEMPTN.). THE LEARNE D COUNSEL FOR THE ASSESSEE ITA NO.96(BANG)2015 4 STATED THAT THERE IS NO INCONSISTENCY IN THE TRUST DEED WITH RESPECT TO THE AREA OF OPERATION OR IRREVOCABILITY CLAUSE AND DISSOLUTION CLAUSE. FURTHER, THE LEARNED COUNSEL SUBMITTED AS FOLLOWS; THAT THE LEARNED CIT(EXEMPTN.) BANGALORE HAS ERRED IN STATING THAT THERE IS NO MATERIAL BEFORE HIM TO BE SATISFIED REGARDING GENUINENESS OF THE ACTIVITIES, WHEN THE COPY OF THE LEASE AGREEMENT FOR THE PROPER TY IN THE CITY OF BANGALORE WHERE THE EDUCATION ACTIVITIES FOR PROVIDING PRIMAR Y AND SECONDARY EDUCATION ARE CARRIED ON UNDER VIBGYOR HIGH AT SURVEY NO.66, 4 TH MAIN ROAD, N.S.PALYA, BANNERGHATTA ROAD, BANGALORE-560 076, HAS BEEN PLAC ED ON RECORD TOGETHER WITH COPIES OF THE ACCOUNTS ETC. THAT THE LEARNED CIT(EXEMPTN.) BANGALORE HAS ERRED IN INTERPRETING THE INDENTURE OF TRUST DATED 30-10-2012 KNOWN AND ERRED TO AS FAROHAR GLOBAL FOUNDATION THROUGH THE OBJECTS FOR WHICH THE TRUST WAS SETTLED NAMELY EDUCATION HAS BEEN CLEARLY STATED IN CLAUSE-4 OF TH E INDENTURE DATED 30-10- 2012 AND OTHER POWERS INCLUDING THE AREA OF OPERATI ON, IRREVOCABILITY CLAUSE, DISSOLUTION CLAUSE ARE STATED THEREIN THE INDENTURE AND WHEN THE TRUST IS NOT A RELIGIOUS TRUST AND RESTRICTED AS ASSUMED BY THE CI T(EXEMPTN.) 7. ON A QUERY OF THE BENCH, AS TO WHETHER ONE MORE OPPORTUNITY SHOULD BE GIVEN TO THE ASSESSEE TO SATISFY THE CIT(EXEPTN. ), THE LEARNED DR HAD NO OBJECTION FOR THE SAME. 8. IN THESE CIRCUMSTANCES, WE FIND THAT THE TRUST DEED CONTAINS ALL THE DETAILS AND REJECTION OF THE APPLICATION FOR REGIST RATION U/S 12A OF THE IT ACT, ITA NO.96(BANG)2015 5 1961 HAS BEEN DONE BY THE CIT(EXEMPTN.) WITHOUT LOO KING INTO THE DETAILS AS FILED BY THE ASSESSEE TRUST. 9. WE REMAND THE ISSUE TO THE FILE OF THE CIT(EXEM PTN.) TO EXAMINE THE TRUST DEED AFRESH, AFTER GIVING AN OPPORTUNITY TO T HE ASSESSEE TO PRESENT ITS CASE. THE CIT(EXEMPTN.) SHALL THEREAFTER GRANT R EGISTRATION U/S 12A OF THE IT ACT, 1961. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSE E IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THE 31 ST AUGUST, 2015. SD/- (S.RIFAUR RAHMAN) SD/- (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE: D A T E D : 31-08-2015 AM* COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A)-II BANGALORE 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER, AR, ITAT, BANGALORE ITA NO.96(BANG)2015 6