MANDIR SHRI GOVERDHAN NATH JI , JHALAWAR V. COMMISSIONER OF INCOME TAX (EXEPTION), JAIPUR

ITA 996/JPR/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7823 (ITAT-JAIPUR)
• Duration Of Justice: 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 26-07-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KALIKA SINGH
• Keywords: Principle of natural justice; Cancellation of registration; Set aside
• Section: 12A; 12AA; 13; 12; 11

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,A JAIPUR JH LAANHI XKSLKBZ] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI VIKRAM SING H YADAV, AM VK;DJ VIHY LA- @ ITA NO. 996/JP/2019 UNDER SECTION 12AA(1)(B)(II) OF THE ACT MANDIR SHRI GOVERDHAN NATH JI DAHIKHERA VILLAGE, DAHIKHERA JHALAWAR 326 038 CUKE VS. THE CIT (EXEMPTION) KAILASH HEIGHT, LAL KOTHI, TONK ROAD, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AACTM 5784 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI VINOD GUPTA, CA JKTLO DH VKSJ LS @ REVENUE BY: SHRI KALIKA SINGH, CIT-DR LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 15/01/2020 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 23 /01/2020 VKNS'K@ ORDER PER: SANDEEP GOSAIN, J.M. THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A GAINST THE ORDER OF CIT(EXEMPTION), JAIPUR DATED 29.05.2019 PASSED U/S 12AA(1)(B)(II) OF THE I.T. ACT, 1961 RAISING THEREIN FOLLOWING GRO UNDS OF APPEAL. 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.CIT(EXEMPTIONS), JAIPUR HAS ERRED BY REJ ECTING REGISTRATION U/S 12AA. THE REJECTION IS UNJUSTIFIED OR ILLEGAL. ITA NO. 996/JP/2019 MANDIR SHRI GOVERDHAN NATH JI VS LD. CIT (E) JAIPUR 2 2. IMPUGNED ORDER PASSED U/S 12AA(1)(B)(II) OF THE I.T. ACT, 1961 IS BAD IN LAW AND AGAINST THE PRINCIPAL O F NATURAL JUSTICE FOR MANY MORE OTHER STATUTORY REASONS. 2.1 THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE HAD FILED AN APPLICATION FOR SEEKING REGISTRATION U/S 12AA OF TH E I.T. ACT, 1961 BUT THE SAID APPLICATION FOR REGISTRATION WAS REJECTED VIDE ORDER DATED 29-05-2019 BY THE LD CIT (EXEMPTIONS) BY HOLDING THAT THE ASSE SSEE TRUST IS A PRIVATE RELIGIOUS TRUST AND ACCORDINGLY IT CANNOT BE HELD A S CHARITABLE WITHIN THE MEANING OF SECTION 2(15) OF THE ACT. THE LD CIT (EX EMPTIONS) ALSO HELD THAT SINCE THE INCOME FROM PROPERTY HELD UNDER THE TRUST IS FOR PRIVATE RELIGIOUS PURPOSES AND DOES NOT ENDURE FOR THE BENE FIT OF THE PUBLIC. THUS THE PROVISIONS OF SECTION 13(1)(A) R.W.S. 12AA(4) A RE ATTRACTED AND IT MAKES THE ASSESSEE INELIGIBLE FOR GRANT OF REGISTRA TION. 2.2 ON THIS ASPECT, THE LD.AR APPEARING ON BEHALF O F THE ASSESSEE SUBMITTED BEFORE US THAT THE PRESENT TRUST WAS REGI STERED ON 05-05-1988 AS PUBLIC TRUST UNDER THE PROVISIONS OF RAJASTHAN PUBL IC TRUST ACT, 1959 WHICH GOES TO PROVE THAT THE ASSESSEE IS A PUBLIC T RUST AND IN THESE CIRCUMSTANCES THE FINDINGS RECORDED BY THE LD CIT ( EXEMPTIONS) IS CONTRARY TO THE FACTS PLACED ON RECORD. IT WAS FURT HER SUBMITTED THAT THE ITA NO. 996/JP/2019 MANDIR SHRI GOVERDHAN NATH JI VS LD. CIT (E) JAIPUR 3 BOARD OF TRUSTEE OF ASSESSEE TRUST IS HAVING 9 TRUS TEES WHICH UNDERTOOK TO LOOK AFTER THE ACTIVITIES OF THE TRUST FOR THE BENE FIT OF PUBLIC AT LARGE. THE LD.AR OF THE ASSESSEE PLACED ON RECORD THE COMPLETE LIST OF TRUSTEES WHICH IS AVAILABLE AT PAGE 6 OF THE PAPER BOOK. IT WAS AL SO SUBMITTED THAT WHILE REJECTING THE REGISTRATION U/S 12AA OF THE ACT, LD CIT (EXEMPTIONS) INVOKED THE PROVISIONS OF SECTION 13(1)(A) R.W.S. 1 2AA(4) OF THE ACT WHEREAS THE PROVISIONS OF SECTION 12AA(4) OF THE AC T ARE NOT ATTRACTED AS PER THE FACTS OF THE PRESENT CASE AS THE SAID PART ICULAR SECTION PROVIDES FOR CANCELLATION OF REGISTRATION, IF AT ANY SUBSEQUENT STAGE, IT WAS NOTICED THAT DUE TO OPERATION OF SECTION 13(1), THE ACTIVITIES O F THE TRUST ARE NOT CARRIED OUT IN THE MANNER PROVIDED UNDER THE PROVISION OF S ECTION 11 AND 12 OF THE ACT. THEREFORE, THIS SECTION WOULD COME INTO PL AY ONLY WHEN REGISTRATION HAS ALREADY BEEN GRANTED TO THE ASSESS EE TRUST. IT WAS SUBMITTED THAT SINCE THE ORDER OF THE LD CIT (EXEMP TIONS) IS NOT BASED ON CORRECT APPRECIATION OF FACTS AND LEGAL PROPOSITION , THEREFORE, THE SAME DESERVES TO BE SET ASIDE. 2.3 ON THE OTHER HAND, THE LD. DR APPEARING ON BEHA LF OF THE REVENUE RELIED ON THE ORDERS OF THE LD CIT (EXEMPTIONS). ITA NO. 996/JP/2019 MANDIR SHRI GOVERDHAN NATH JI VS LD. CIT (E) JAIPUR 4 2.4 WE HAVE HEARD THE LD. COUNSEL FOR BOTH THE PART IES AND HAVE PERUSED THE MATERIALS PLACED ON RECORD. IT IS UNDISPUTED FA CT THAT THE ASSESSEE TRUST IS REGISTERED UNDER THE PROVISIONS OF RAJASTHAN PUB LIC TRUST ACT, 1959 WHICH PROVES THAT THE ASSESSEE IS A PUBLIC TRUST WH EREAS THE LD CIT (EXEMPTIONS) HAS RECORDED THE CONTRARY FINDINGS BAS ED ON INCORRECT APPRECIATION OF FACTS. THE LD CIT (EXEMPTIONS) HAS NOWHERE DISCUSSED THE REGISTRATION OF THE ASSESSEE TRUST UNDER THE RAJAST HAN PUBLIC TRUST ACT, 1959 AND HAS DECIDED THE MATTER BY PRESUMING THAT T HE ASSESSEE TRUST IS A PRIVATE TRUST. APART FROM THIS, WE HAVE ALSO GONE T HROUGH THE PROVISIONS OF SECTION 12AA(4) OF THE ACT WHICH READS AS UNDER:- 12AA(4) WITHOUT PREJUDICE TO THE PROVISIONS OF SU B-SECTION (3), WHERE A TRUST OR AN INSTITUTION HAS BEEN GRANTED REGISTRATI ON UNDER CLAUSE (B) OF SUB- SECTION (1) OR HAS OBTAINED REGISTRATION AT ANY TIM E UNDER SECTION 12A [AS IT STOOD BEFORE ITS AMENDMENT BY THE FINANCE (NO. 2) A CT, 1996 (33 OF 1996)] AND SUBSEQUENTLY IT IS NOTICED THAT (A) THE ACTIVITIES OF THE TRUST OR THE INSTITUTION ARE BEING CARRIED OUT IN A MANNER THAT THE PROVISIONS OF SECTIONS 11 AND 12 DO NOT APPLY TO EXCLUDE EITHER WHOLE OR ANY PART OF THE INCOME OF SUCH TRUST OR INSTITUT ION DUE TO OPERATION OF SUB- SECTION (1) OF SECTION 13 ; OR (B) THE TRUST OR INSTITUTION HAS NOT COMPLIED WITH THE REQUIREMENT OF ANY OTHER LAW, AS REFERRED TO IN SUB-CLAUSE (II) OF CLAUSE (A) OF SUB- SECTION (1), AND THE ORDER, DIRECTION OR DECREE, BY WHATEVER NAME CALLED, HOLDI NG THAT SUCH NON- COMPLIANCE HAS OCCURRED, HAS EITHER NOT BEEN DISPUT ED OR HAS ATTAINED FINALITY, THEN, THE PRINCIPAL COMMISSIONER OR THE COMMISSIONE R MAY, BY AN ORDER IN WRITING, CANCEL THE REGISTRATION OF SUCH TRUST OR INSTITUTIO N: ITA NO. 996/JP/2019 MANDIR SHRI GOVERDHAN NATH JI VS LD. CIT (E) JAIPUR 5 AFTER APPRECIATING THE PROVISIONS OF SECTION 12AA(4 ) OF THE ACT, WE ARE OF THE VIEW THAT THIS PROVISION IS WRONGLY INVOKED BY THE LD CIT (EXEMPTIONS) WHILE DENYING THE REGISTRATION OF THE ASSESSEE TRUST AS IT HAS BEEN CATEGORICALLY MENTIONED UNDER THE PROVISIONS O F SECTION 12AA(4) OF THE ACT WHICH PROVIDES FOR CANCELLATION OF REGISTRA TION IF IT IS SUBSEQUENTLY NOTICED THAT DUE TO OPERATION OF SECTI ON 13(1) THE ACTIVITIES OF THE TRUST ARE NOT CARRIED OUT IN THE MANNER PROV IDED UNDER THE PROVISIONS OF SECTION 11 AND 12 OF THE ACT. THEREFO RE, IN OUR VIEW, THIS SECTION WOULD COME INTO PLAY ONLY WHEN REGISTRATION HAD ALREADY BEEN GRANTED TO THE ASSESSEE. THEREFORE, THE LD CIT (EXE MPTIONS) HAS WRONGLY INVOKED THE PROVISIONS OF SECTION 12AA(4) OF THE AC T WHILE REFUSING THE REGISTRATION U/S 12AA (1) OF THE ACT. IT IS A SETTL ED LAW THAT AT THE STAGE OF GRANT OF REGISTRATION, LD CIT (EXEMPTIONS) IS NOT R EQUIRED TO ENQUIRE WHETHER THE CONDITIONS OF SECTION 13 ARE FULFILLED OR NOT. AT THIS STAGE, THE LD CIT (EXEMPTIONS) WAS TO LOOK INTO THE OBJECT OF THE TRUST AND GENUINENESS OF THE ACTIVITIES OF THE TRUST. THEREFO RE, KEEPING IN VIEW OUR ABOVE OBSERVATIONS AND FINDINGS, WE SET ASIDE THE O RDER OF THE LD CIT (EXEMPTIONS) AND RESTORE THE MATTER TO THE FILE OF THE LD CIT (EXEMPTIONS) ITA NO. 996/JP/2019 MANDIR SHRI GOVERDHAN NATH JI VS LD. CIT (E) JAIPUR 6 TO PASS AFRESH ORDER AFTER TAKING INTO CONSIDERATIO N THE DOCUMENTS FILED BY THE ASSESSEE TRUST INCLUDING THE COPY OF TRUST DEED , COPY OF REGISTRATION CERTIFICATE, LIST OF MEMBERS OF BOARD OF TRUSTEES A ND ALSO TO VERIFY THE OBJECT OF THE TRUST AND GENUINENESS OF THE ACTIVITI ES OF THE TRUST. THUS THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL P URPOSES. 3.0 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES WITH NO ORDER AS TO COST. ORDER PRONOUNCED IN THE OPEN COURT ON 23 /01/2020 . SD/- SD/- FOE FLAG ;KNO LANHI XKSLKBZ (VIKRAM SINGH YADAV) (SANDEEP GOSAIN) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 23/01/2020. *MISHRA VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- MANDIR SHRI GOVERDHAN NATH JI, JHALA WAR 2. IZR;FKHZ@ THE RESPONDENT-THE CIT (EXEMPTIONS) , JAIPUR 3. VK;DJ VK;QDR@ CIT 4. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR . 5. XKMZ QKBZY@ GUARD FILE {ITA NO. 996/JP/2019} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSTT. REGISTRAR