Lilavati & Maneklal Shah Charitable Trust, Kurnool, Hyderabad V. CIT, (Exemptions), Hyd, Hyderabad

ITA 994/HYD/2015

• Counselvise Citation: 99422514 RSA 2015
• Duration Of Justice: 2 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2015
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 29-10-2015
• Assessment Year: 2012-2013
• Appeal Filed On: 29-07-2015
• Court: TRIBUNAL
• Department Lawyers: M SITARAM
• Assessee Lawyers: B SATYANARAYANA MURTY
• Keywords: Gift; Charitable institution
• Section: 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A, HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 994/HYD/2015 ASSESSMENT YEAR: 2012-13 LILAVATI & MANEKLAL SHAH CHARITABLE TRUST, KURNOOL [PAN: AABTL2095B] VS THE COMMISSIONER OF INCOME TAX (EXEMPTIONS), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI B. SA TYANARAYANA MURTY, AR FOR REVENUE : SHRI M. SITARAM , DR DATE OF HEARING : 20 - 1 0 - 201 5 DATE OF PRONOUNCEM ENT : 28 - 1 0 - 2015 O R D E R PER B. RAMAKOTAIAH, A.M. : THIS APPEAL WAS FILED BY ASSESSEE AGAINST THE ORD ER OF THE COMMISSIONER OF INCOME TAX (EXEMPTIONS), HYDERA BAD DATED 27-05-2015. ASSESSEE, A TRUST UNDER THE NAME AND S TYLE OF LILAVATI & MANEKLAL SHAH CHARITABLE TRUST HAS FIL ED AN APPLICATION IN FORM NO. 10A ON 21-11-2014 SEEKING REGISTRATION U/S. 12A OF THE INCOME TAX ACT [ACT]. IN THE COURSE OF ENQUIRY LD.CIT(E) COMPARED ORIGINAL TRUST DEED AND SUPPLEMENTARY DEED AND REJECTED REGISTRATION STATING AS UNDER: I.T.A. NO. 994/HYD/2015 LILAVATI & MANEKLAL SHAH CHARITABLE TRUST :- 2 -: 2. IT IS NOTICED THAT VIDE THAT SUPPLEMENTARY TRUS T DEED EXECUTED ON 13-05-2015, THREE NEW OBJECTS HAVE BEEN ADDED IN THE CASE OF THE ASSESSEE, SHOWING AS MAIN AIMS AND OBJE CTS. AT PAGE 2 OF THAT SUPPLEMENTARY DEED UNDER PARA 2 IT IS MEN TIONED, WHEREAS THE FOUNDERS ARE KEENLY DESIROUS OF CREATIN G A CHARITABLE TRUST OF PUBLIC NATURE FOR THE MAIN AIMS AND OBJECTS AS SHOWN BELOW APART FROM THE AIMS AND OBJECTS IN THE MAIN TRUST DEED. LATER, THERE ARE MENTION OF NEW OBJECTS, SHO WING UNDER THE HEAD MAIN AIMS AND OBJECTS WITH SL.NOS. 1(A) TO ( C), SL.NO. 2 & SL.NO.3. IT IS NOT UNDERSTOOD AND ALSO NOT CLEAR A S TO HOW IN THAT SUPPLEMENTAL DEED MADE LATER, SUCH NEW OBJECTS HAVE BEEN ADDED ARE REFERRED TO AS MAIN OBJECTS, WHEN IN THE ORIGIN AL TRUST DEED MADE ON 15-10-2014, THE OBJECTS OF THE TRUST ARE ME NTIONED UNDER PARA 2 WITH SL.NO.(A) TO (K) WHICH OTHERWISE CONSTI TUTE THE MAIN OBJECTS IN THE CASE OF THE APPLICANT TRUST. FURTHE R, IT HAS NOT BEEN CLARIFIED BY THE LD. AR AS TO UNDER WHICH CIRCUMSTA NCES SUCH SUPPLEMENTAL TRUST DEED HAS BEEN MADE AND EXECUTED BY THE FOUNDERS OF THE TRUST, ADDING SUCH FURTHER OBJECTS IN THE CASE OF THE TRUST. IN FACT, THE APPLICANT HAS NOT BEEN ABLE TO FURNISH AND EXPLAIN FULL FACTUAL PARTICULARS AND ALSO HAS NOT BEEN ABLE TO CLARIFY ABOUT THE ACTUAL AND EXISTING OBJECTS IN THE CASE OF THE TRUST. UNDER THESE CIRCUMSTANCES, HAVING REGARD TO THE PROVISIONS OF C LAUSE (B) TO SUB- SECTION (1) OF SEC. 12AA OF THE ACT, IN MY VIEW, TH E APPLICANT TRUST IN THIS CASE CANNOT BE GRANTED REGISTRATION U/S. 12AA . 2. LD. COUNSEL SUBMITTED THAT ASSESSEE HAS THE FOL LOWING OBJECTS AS PER DEED DT. 15-10-2014 AS UNDER: A. TO CONSTRUCT DHARMASALA, REST HOUSES, COMMUNITY HA LL TO BE USED FOR THE PURPOSES OF THE TRUST WITHOUT ANY PROF IT NATURE FOR A NOMINAL RENT FOR MAINTENANCE. B. TO INSTITUTE AND AWARD SCHOLARSHIP AND GRANT FINAN CIAL ASSISTANCE FOR STUDY TO ALL PERSONS DESERVING HELP AND ENCOURAGEMENT AND TO HELP POOR AND INDIGENT FAMILIE S TO GIVE BETTER EDUCATION TO THEIR CHILDREN BY WAY OF PURCHA SING BOOKS AND STATIONERY AND PAYING SCHOOL FEES FOR HIGHER STUDIE S. C. TO ESTABLISH, MAINTAIN AND RUN LIBRARIES, READING R OOMS, RECREATION CENTERS AND OTHER INSTITUTIONS FOR THE S PREAD OF EDUCATION AMONG THE MEMBERS OF THE PUBLIC. D. TO ESTABLISH, MAINTAIN AND RUN, DEVELOP, GRAN T DONATIONS I.T.A. NO. 994/HYD/2015 LILAVATI & MANEKLAL SHAH CHARITABLE TRUST :- 3 -: AND OTHERWISE HELP AND AID SCHOOLS, COLLEGES AND INSTITUTIONS OF THE FINE ARTS (MUSIC), INSTITUTIONS IMPARTING TE CHNICAL, VOCATIONAL AND INDUSTRIAL SUBJECTS, HEALTH AND BODY BUILDING CENTERS, HOSTELS, POOR HOUSES, ORPHANAGES AND OTH ER DESERVING INSTITUTIONS WITHOUT ANY PROFIT MOTIVE. E. TO GRANT DONATIONS AND AID TO INSTITUTIONS HAVING THE SAME OR BASICALLY SIMILAR OBJECTS AS THOSE OF TH IS TRUST AND WHICH DESERVE A SUPPORT BY REASON OF THE LOCALITY OF OPERATION OR OTHERWISE. F. TO ACCEPT DONATIONS, GIFTS, PRESENTS AND GRA NT EITHER IN CASH OR IN KIND FOR THE PURPOSES OF THE ABOVE-MENTIONED TRUST. SUCH CONTRIBUTIONS SHALL BE DEALT EITHER AS CORPUS OR AS INCOME ACCORDING TO THE DIRECTION OF THE DONORS. G. TO ESTABLISH, MAINTAIN, RUN, DEVELOP, IMPRO VE, EXTEND GRANT DONATIONS AND TO AID AND ASSIST IN THE ESTABL ISHMENT, MAINTENANCE, RUNNING, DEVELOPMENT, IMPROVEMENT AND EXTENSION OF HOSPITALS, CLINICS, DISPENSARIES, HOMES AND SIMI LAR INSTITUTIONS AFFORDING TREATMENT, CARE, REST, RECUPERATION AND OTHER ADVANTAGES IN THE WAY OF ALLEVIATING SUFFERING OF HUMANITY. H. TO DISSEMINATE USEFUL KNOWLEDGE ON CULTURAL AN D SOCIAL MATTERS BY ARRANGING LECTURES, SHOWS, PERFORMANC ES THROUGH SUCH MEDIA. I. TO CONDUCT POOR FEEDING AND TO GIVE FOOD , CLOTHING AND CASH GRANTS TO THE POOR AND DEFECTIVES WITHOUT ANY DISTINCTION FOR ANY CASTE OR CREED OR RELIGION AND TO AFFORD RE LIEF TO PEOPLE IN DISTRESS, AFFECTED BY EARTHQUAKES, FLOODS, FAMIN E, PESTILENCE AND OTHER CAUSES AND TO GRANT DONATIONS FOR THE SU PPORT OF THE INMATE OF ORPHANAGES, RESCUE HOUSE AND SIMILAR INS TITUTIONS AND SOCIETIES. J. TO ESTABLISH, RUN, ASSIST, IMPROVE, AND EXTEND G RANT DONATIONS AND TO AID AND ASSIST IN THE ESTABLISH MENT, MAINTENANCE, RUNNING, DEVELOPMENT OF EDUCATION OF S PECIAL NEEDS CHILDREN AND YOUNG ADULTS SO THAT THEY MAY DE VELOP BASIC SKILLS NECESSARY FOR INDEPENDENT LIVING. K. TO DO GENERALLY ALL SUCH OTHER THINGS AND MAT TERS AS ARE CONDUCIVE TO THE GENERAL OBJECTS OF THE PUBLIC UTI LITY AND CHARITY I.T.A. NO. 994/HYD/2015 LILAVATI & MANEKLAL SHAH CHARITABLE TRUST :- 4 -: AS DEFINED IN THE INCOME TAX ACT 1961 OR IN ANY AME NDMENTS THERETO. 2.1. IN ADDITION, ASSESSEE ALSO MADE A SUPPLEMENTAR Y TRUST DEED DT. 13-05-2015 HAVING THE FOLLOWING OBJECTS AS WELL: 1. (A) SPREADING OR PROMOTION OF EDUCATION BY ESTABLIS HING, MAINTAINING AND SUPPORTING STUDENTSHIP AND SCHOLARS HIP FOR THE POOR, NEEDY AND DESERVING STUDENTS: (B) PAYING TO NEEDY STUDENTS SCHOOL FEES & COLLEGE FEES AND BOOKS ETC., (C) PAYING WHOLE OR PART OF EDUCATIONAL CAUSE FOR D ESERVING STUDENTS. 2. AFFORDING MEDICAL, SURGICAL AND MATERNITY RELIEF BY GRANT OF MEDICAL RELIEF AND HELP TO POOR AND DESERVING PATIE NTS BY PROVIDING MONEY TO THEM FOR MEDICINES, MEDICAL TREATMENT OPER ATION AND POST OPERATION TREATMENT AND BLOOD TRANSFUSION. 3. TO GRANT DONATIONS AND AIDS TO THE INSTITUTIONS , SOCIETIES, SPECIAL SCHOOLS ENGAGED IN MULTI-PRONGED SERVICES IN THE FI ELD OF DISABILITIES IMPARTING EDUCATION AND VOCATIONAL TRAINING TO CHIL DREN WITH MULTIPLE DISABILITIES. 2.2. IT WAS THE SUBMISSION OF LD. COUNSEL THAT ASS ESSEES OBJECTS ARE VERY CLEAR AND CHARITABLE IN NATURE AND THE CIT(EXEMPTIONS) HAS ERRED IN REJECTING THE REGISTRA TION. LD. CIT-DR RELIED ON THE ORDERS OF CIT(EXEMPTIONS) TO SUBMIT T HAT THE OBJECTS ARE NOT CLEAR AND NO EXPLANATION WAS FURNISHED BY A SSESSEE. 3. WE HAVE CONSIDERED THE ISSUE AND PERUSED THE DOCUMENTS PLACED ON RECORD. AS CAN BE SEEN FROM TH E OBJECTS, THEY ARE VERY CLEAR AND THEY ARE CHARITABLE IN NATURE AN D NOT HAVING ANY RELIGIOUS OBJECTS. WE ARE UNABLE TO UNDERSTAND ON WHAT BASIS THE I.T.A. NO. 994/HYD/2015 LILAVATI & MANEKLAL SHAH CHARITABLE TRUST :- 5 -: LD. CIT(EXEMPTIONS) CAME TO HIS CONCLUSION IN REJEC TING THE REGISTRATION. WE ARE ALSO UNABLE TO UNDERSTAND WHAT LD.CIT(E) MEANT BY THE ACTUAL AND EXISTING OBJECTS IN THE CASE OF THE TRUST. SINCE THE OBJECTS ARE VERY CLEAR, IN CASE THE CIT(EXEMPTI ONS) HAS ANY OTHER CLARIFICATIONS REQUIRED, HE COULD HAVE SOUGHT EXPLANATION. SINCE CIT(EXEMPTIONS) HAS NOT APPLIED HIS MIND TO T HE FACTS IN ISSUE, WE ARE OF THE OPINION THAT HIS ORDER CANNOT BE SUSTAINED. ACCORDINGLY, THE ORDER DT. 27-05-2015 IS SET ASIDE WITH THE DIRECTION TO CIT(EXEMPTIONS) TO CONSIDER THE ISSUE OF REGISTRATION U/S. 12A, AFRESH AFTER GIVING DUE OPPORTUNITY TO AS SESSEE. 4. IN THE RESULT, APPEAL IS ALLOWED FOR STATISTICA L PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH OCTOBER, 2015 SD/- SD/- (D. MANMOHAN) (B. RAMAKOTAIAH) VICE PRESIDENT ACCOUNTANT MEMBE R HYDERABAD, DATED 28 TH OCTOBER, 2015 TNMM I.T.A. NO. 994/HYD/2015 LILAVATI & MANEKLAL SHAH CHARITABLE TRUST :- 6 -: COPY TO : 1. LILAVATI & MANEKLAL SHAH CHARITABLE TRUST, 43-26 5-A, N.R. PETA, KURNOOL. C/O. VENUGOPAL & CHENOY, CHARTE RED ACCOUNTANTS, 4-1-889/16/2, TILAK ROAD, HYDERABAD. 2. THE COMMISSIONER OF INCOME TAX (EXEMPTIONS), HYDERABAD. 3. THE ITO (EXEMPTIONS), WARD TIRUPATI. 4. D.R. ITAT, HYDERABAD. 5 . GUARD FILE.