Sri Kumaraguru Annadhanam Trust, CHENNAI V. DIT, CHENNAI

ITA 986/CHNY/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 51851 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: misc
• Appeal Filed On: 06-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY V R DESHMUKHJCIT
• Assessee Lawyers: K RAVI
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI BEFORE DR. O.K.NARAYANAN, VICE-PRESIDENT AND SHRI HARI OM MARATHA, JUDICIAL MEMBER ITA NO.986(MDS)/2011 SRI KUMARAGURU ANNADHANAM TRUST, 21, SAMBANDAM STREET, OFF: DEVANATHAN ROAD, MANDAVELI, CHENNAI-600028 PAN AAJTS6330C VS. THE DIRECTOR OF INCOME-TAX(EXEMPTIONS), CHENNAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K. RAVI, ADVOCATE RESPONDENT BY : SHRI SANJAY V.R.DESHMUKH,JCIT DATE OF HEARING : 13 TH SEPTEMBER, 2011 DATE OF PRONOUNCEMENT : 13 TH SEPTEMBER, 2011 O R D E R PER DR.O.K.NARAYANAN, VICE-PRESIDENT: THIS APPEAL IS FILED BY THE ASSESSEE. THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE DIRECTOR OF INCOM E- TAX(EXEMPTIONS) AT CHENNAI, DATED 29-3-2011, REJECT ING THE - - ITA NO.986 OF 2011 2 APPLICATION MADE BY THE ASSESSEE FOR REGISTRATION U NDER SECTION 12AA OF THE INCOME-TAX ACT, 1961. 2. THE ASSESSEE IS A TRUST INSTITUTED BY DEED OF T RUST DATED 23-12-2009. THE OBJECTS OF THE TRUST ARE, PR OMOTION OF EDUCATION, PROVIDING FINANCIAL ASSISTANCE TO POOR A ND DESERVING PEOPLE IN THEIR STUDIES, RESEARCH, PROVIDING MEDICA L ASSISTANCE TO POOR AND NEEDY AND ALSO TO CARRY ON ANNADHANAM FO R THE POOR PEOPLE. 3. BUT THE DIRECTOR OF INCOME-TAX(EXEMPTIONS) DENI ED REGISTRATION UNDER SECTION 12AA OF THE ACT ON THE G ROUND THAT THE ASSESSEE TRUST HAS NOT STARTED ITS ACTIVITIES AND, THEREFORE, NO SATISFACTION CAN BE RECORDED ON THE GENUINENESS OF THE ACTIVITIES OF THE TRUST, EVEN THOUGH THE OBJECTS OF THE ASSESS EE TRUST ARE CHARITABLE IN NATURE. IN SHORT, THE DIRECTOR OF IN COME- TAX(EXEMPTIONS) REJECTED THE APPLICATION ON THE GRO UND THAT THE ASSESSEE HAS NOT STARTED ITS CHARITABLE ACTIVITIES. - - ITA NO.986 OF 2011 3 4. WE HEARD SHRI K.RAVI, THE LEARNED COUNSEL APPEARING FOR THE ASSESSEE AND SHRI SANJAY V.R.DESH MUKH, THE LEARNED JOINT COMMISSIONER OF INCOME-TAX, APPEARING FOR THE REVENUE. 5. AS RIGHTLY AGREED BY THE DIRECTOR OF INCOME- TAX(EXEMPTIONS) AS WELL, THE OBJECTS PROCLAIMED BY THE ASSESSEE TRUST ARE DEFINITELY CHARITABLE IN NATURE. THE LEA RNED COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT AS A HUMBLE BEGINNI NG OF ITS ACTIVITIES, THE TRUST HAS ALREADY MADE ANNADHANAM O NCE OR TWICE ON SPECIAL OCCASIONS, THAT TOO TO THE NEEDY PEOPLE. THE ASSESSEE TRUST IS NOT HAVING A HUGE CORPUS SO AS TO START ALL ITS ACTIVITIES INSTANTLY. THE ASSESSEE TRUST HAS TO CO LLECT THE NECESSARY FUNDS FROM THE GENERAL PUBLIC. THERE IS NO CASE THAT THE ASSESSEE HAS CARRIED ON ANY ACTIVITY WHICH IS N OT CHARITABLE IN NATURE. THERE IS NO EVIDENCE ON RECORD AGAINST THE GENUINENESS OF THE INTENTIONS OF THE ASSESSEE TRUST . ONE HAS TO POSITIVELY PRESUME THAT AS AND WHEN THE ASSESSEE CO LLECTS THE NECESSARY FUNDS, IT WILL INVOLVE MORE IN ITS ACTIVI TIES. BUT IT IS NOT PROPER ON THE PART OF THE DIRECTOR OF INCOME-TAX(EX EMPTIONS) TO - - ITA NO.986 OF 2011 4 STATE THAT ONE SHOULD WAIT TILL THE ACTIVITIES ARE CARRIED OUT BY THE ASSESSEE TRUST TO GRANT THE BENEFIT OF REGISTRATION UNDER SECTION 12AA OF THE ACT. IF THE ASSESSEE HAS ESTABLISHED I TS LAWFUL EXISTENCE AS A TRUST FOR THE PURPOSE OF CARRYING ON CHARITABLE ACTIVITIES, IT IS NECESSARY FOR THE REVENUE AUTHORI TIES TO GRANT REGISTRATION UNDER SECTION 12AA OF THE ACT. IN FUT URE, IF THE ASSESSEE IS FOUND TO BE NOT CARRYING ON CHARITABLE ACTIVITIES, AS STATED BY IT, THE DIRECTOR OF INCOME-TAX(EXEMPTIONS ) HAS THE POWER TO WITHDRAW THE REGISTRATION ONCE GRANTED AND THE ASSESSING OFFICER IS ALSO HAVING THE POWER TO EXAMI NE ITS ACTIVITIES IN THE COURSE OF SUCCESSIVE ASSESSMENTS. 6. THEREFORE, IT IS NOT PROPER ON THE PART OF THE REVENUE TO DENY REGISTRATION TO THE ASSESSEE TRUST UNDER SECTION 12AA OF THE ACT ON THE GROUND THAT THE BABY BORN TO DAY IS NOT RUNNING TOMORROW. IN THE FACTS AND CIRCUMSTANCES O F THE CASE, WE DIRECT THE DIRECTOR OF INCOME-TAX(EXEMPTIONS) TO GRANT THE ASSESSEE TRUST REGISTRATION UNDER SECTION 12AA OF THE INCOME- TAX ACT, 1961. - - ITA NO.986 OF 2011 5 7. IN RESULT THIS APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 13 TH OF SEPTEMBER, 2011 AT CHENNAI. SD/- SD/- (HARI OM MARATHA) (DR. O.K.NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED THE 13 TH SEPTEMBER, 2011. V.A.P. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT (4) CIT(A) (5) D.R. (6) G.F.