Bio Diversity Conservation and Rular Live Li Hood Improvement Project(BCRLIP), Dhangadhra V. The Director of Income tax Exemption, Ahmedabad

ITA 975/AHD/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0876 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 18-07-2016
• Assessment Year: misc
• Appeal Filed On: 10-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIBHA BHALLA
• Assessee Lawyers: M K PATEL
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH AHMEDABAD BEFORE SHRI R. P. TOLANI, JM, & SHRI MANISH BORA D, AM. ITA NO.975 /AHD/2013 ASST. YEAR: BIO DIVERSITY CONSERVATION & RURAL LIVELIHOOD IMPROVEMENT PROJECTS SOCIETY(BCRLIP), C/O DY. CONSERVATOR OF FOREST, WILD ASS CENTURY MAYUMAGAR, HALVAD ROAD, DHARANGADHRA VS. DIRECTOR INCOME-TAX EXEMPTION, AHMEDABAD. APPELLANT RESPONDENT PAN AABTB8489M APPELLANT BY SHRI M. K. PATEL, AR RESPONDENT BY SMT. VIBHA BHALLA, CIT,DR DATE OF HEARING: 18/07/2016 DATE OF PRONOUNCEMENT: 19/7/2016 O R D E R PER MANISH BORAD, ACCOUNTANT MEMBER . ASSESSEE IS IN APPEAL AGAINST THE ORDER OF DIRECTO R OF INCOME- TAX (EXEMPTION), AHMEDABAD, DATED 31.01.2013 PASSED U/S 12AA OF THE I.T. ACT, 1961 (IN SHORT THE ACT). SOLITARY GRO UND OF APPEAL RAISED BY ASSESSEE READS AS UNDER :- 1. THE HONBLE DIRECTOR INCOME TAX HAS ERRED IN LAW BY STATING THAT ASSESSEE TRUST IS NOT GOT DISSOLUTION CLAUSE THEREFORE IT IS NOT A GE NUINE TRUST THOUGH THE ASSESSEE TRUST IS A GOVERNMENT TRUST AND DULY REGISTERED WIT H CHARITY COMMISSIONER UNDER PUBLIC TRUST ACT 1950. THE ASSESSEE PRAY THAT ITS T RUST SHOULD BE REGISTERED U/'S 12AA OF THE INCOME TAX ACT. ITA NO. 975/AHD/2013 ASST. YEAR - 2 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE TR UST IS A GOVERNMENT TRUST SUPPORTED BY GOVERNMENT GRANTS SHA RING OFFICE WITH DY. CONSERVATOR OF FOREST OFFICER, DHRANGADHRA AND THE BUILDING PREMISES BELONGS TO GOVERNENT OF GUJARAT. APPLICATI ON FOR GRANT OF REGISTRATION OF THE TRUST U/S 12AA OF THE ACT WAS R ECEIVED BY DIRECTOR OF INCOME-TAX (EXEMPTION) ON 23.8.2012 ACCOMPANIED BY COPY OF CERTIFICATE OF REGISTRATION OF ASSISTANT CHARITY CO MMISSIONER, COPY OF PAN AND COPY OF TRUST DEED. DURING THE COURSE OF VE RIFICATION OF THE RELATED DOCUMENTS MORE SPECIFICALLY THE TRUST DEED, IT WAS NOTICED BY LD. DIT (EXEMPTION) THAT THE TRUST DEED DOES NOT HA VE ANY CLAUSE THAT THE TRUST WILL NOT BE DISSOLVED AND IT IS PERPETUAL , BECAUSE AS PER BOMBAY PUBLIC TRUST ACT IT IS SETTLED POSITION OF L AW THAT THE TRUST IS A PERPETUAL TRUST AND IN CASE THE ACTIVITIES OF THE T RUST CANNOT BE CARRIED OUT THE ASSET(S) HAVE TO BE TRANSFERRED TO ANOTHER TRUST CARRYING ON SIMILAR ACTIVITIES WITH THE SANCTION OF CHARITY COM MISSIONER. AS NO SUCH CLAUSE WAS THERE IN THE TRUST DEED, LD. DIT DE NIED THE APPROVAL OF THE TRUST. 3. AGGRIEVED, ASSESSEE IS NOW IN APPEAL BEFORE THE TRIBUNAL. 4. LD. AR SUBMITTED THAT ALL NECESSARY DOCUMENTS I NCLUDING MEMORANDUM OF ASSOCIATION AS WELL AS SUBMISSIONS OF A LETTER MENTIONING THEREIN THAT ASSESSEE IS A GOVT. TRUST R UNNING ITS OFFICE BELONG TO THE GOVT. OF GUJARAT. LD. AR FURTHER SUBM ITTED THAT ASSESSEE TRUST RUNS PURELY ON GOVERNMENT GRANT(S) A ND PURELY FOR IMPLEMENTING THE GOVT. SCHEMES. THEREFORE, THE POWE R TO FUNCTION THE TRUST IS WITH THE GOVERNMENT AND IN CASE OF DIS SOLUTION OR ITA NO. 975/AHD/2013 ASST. YEAR - 3 SUSPENSION OF ACTIVITIES THE ASSET(S) WILL BE AUTOM ATICALLY VESTED WITH THE GOVERNMENT AND, THEREFORE, LD. DIT (EXEMPTION) ERRED IN DENYING EXEMPTION U/S 12AA OF THE ACT ONLY ON THE BASIS THA T THE TRUST DEED DOES NOT HAVE ANY CLAUSE ABOUT THE TRUST BEING PERP ETUAL AND WILL NOT BE DISSOLVED. THE ASSESSEE RELIED ON THE ORDER OF T HE CO-ORDINATE BENCH IN THE CASE OF SHREE CHARGAM DASHA PORWAD MAH AMANDAL VS. DCIT IN ITA NO.337 & 338/AHD/2013 PRONOUNCED ON 8/5 /2013. 5. ON THE OTHER HAND, LD. DR SUPPORTED THE ORDER OF LOWER AUTHORITY. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. THE ASSESSEE IS IN APPEAL BEFORE US AGAI NST THE ACTION OF LD. DIT(EXEMPTION), AHMEDABAD FOR DENYING THE APPRO VAL U/S 12AA OF THE ACT BY OBSERVING AS UNDER :- 3. ON VERIFICATION OF REPLY AND RECORDS OF THE 'ASSESS EE' IT IS SEEN THAT THERE IS NO DISSOLUTION CLAUSE IN THE TRUST DEED. FURTHER IT IS ALSO NOTICED THAT TRUST DOES NOT HAVE ANY CLAUSE THAT THE TRUST WILL NOT BE DISSOLVED AND IT IS PERPETUAL. AS PER THE BOMBAY PUBLIC TRUST ACT AND SETTLED POSITION OF LAW, A TRU ST IS A PERPETUAL TRUST. IN CASE THE ACTIVITIES OF THE TRUST CANNOT BE CARRIED OUT, THE SAME, WITH THE SANCTION OF CHARITY COMMISSIONER AND AS PER THE PROCEDURE OF THE BOMBAY PUBLIC TRUST ACT, THE ASSETS ETC. HAVE TO BE TRANSFERRED TO ANOTHER TRUST CARRYI NG ON SIMILAR ACTIVITY NO SUCH CLAUSE IS THERE IN THE DEED AND THEREFORE, THE APPROVAL IS DENIED. 7. WE FURTHER OBSERVE THAT ASSESSEE TRUST NAMELY BI O DIVERSITY CONSERVATION & RURAL LIVELIHOOD IMPROVEMENT PROJECT S SOCIETY IS A GOVERNMENT TRUST SUPPORTED BY GOVERNMENT GRANTS AND RUNNING ITS ITA NO. 975/AHD/2013 ASST. YEAR - 4 OFFICE IN THE GOVERNMENT PREMISES ALONG WITH DY. CO NSERVATOR OF FORESTS OFFICE, DHARANGADHRA. WE FURTHER OBSERVE T HAT ASSESSEE TRUSTS MAIN OBJECT IS TO STRENGTHEN AND MAINSTREAM BIODIVERSITY CONSERVATION AT THE LITTLE RANN OF KUTCH LANDSCAPE LEVEL BY IMPROVING RURAL LIVELIHOODS, LEARNING AND ITS REPLICATING THR OUGH PARTICIPATORY APPROACHES, REDUCE MAN-ANIMAL CONFLICTS ETC. AND IM PLEMENTING GOVERNMENT SCHEME AS PER THE DIRECTIONS OF THE GOVE RNMENT OFFICIALS. OVERALL POWER TO FUNCTION THE TRUST IS ULTIMATELY W ITH THE GOVERNMENT AND, THEREFORE, IN CASE OF DISSOLUTION OF THE SOCIE TY, ASSET(S), IF ANY, WILL REMAIN WITH THE GOVERNMENT ITSELF. 8. WE THEREFORE, ARE OF THE VIEW THAT LOOKING TO TH E TYPE OF ASSESSEE WHICH IS A GOVERNMENT AIDED AND GOVERNMENT SUPPORTED TRUST WHICH IS EXCLUSIVELY RUNNING TO ACHIEVE THE O BJECTS AS PER THE DIRECTIONS OF THE GOVERNMENT AND EVEN THE EXECUTIVE COMMITTEE OF THE SOCIETY COMPRISES OF ALL THE GOVERNMENT OFFICIA LS RANGING FROM CHIEF CONSERVATOR OF FOREST, DIRECTOR OF DEPARTMENT OF AGRICULTURE, ANIMAL HUSBANDRY, FISHERIES ALONG WITH CONSERVATOR, DY. CONSERVATOR OF FORESTS ARE ENOUGH TO SHOW THAT ASSE SSEE TRUST IS PURELY GOVERNMENT TRUST. CERTAINLY THE ASSET(S), IF ANY, WILL BE UNDER THE DIRECT CONTROL OF THE GOVERNMENT AND, THEREFORE , THERE IS A DEEMED CLAUSE WHICH EVEN IF NOT SPECIFICALLY MENTIO NED IN THE TRUST DEED, THAT THE ASSESSEE TRUST WILL BE A PERPETUAL T RUST AND IN CASE OF DISSOLUTION, THE ASSET(S) WILL BE OWNED BY GOVERNME NT ONLY AND, THEREFORE, WITH THIS OBSERVATION WE SET ASIDE THE I SSUE TO THE FILE OF LD. DIT (EXEMPTION) FOR GRANTING APPROVAL U/S 12AA OF T HE ACT TO THE ASSESSEE TRUST. THE GROUND RAISED BY THE ASSESSEE I S ALLOWED. ITA NO. 975/AHD/2013 ASST. YEAR - 5 9. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH JULY, 2016 SD/- SD/- (R. P. TOLANI) JUDICIAL MEMBER (MANISH BORAD) ACCOUNTANT MEMBER DATED 19 /7/2016 MAHATA/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, AHMEDABAD 1. DATE OF DICTATION: 18/07/2016 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 19/07/2016 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: __________ 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 19/7/16 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: