KASTOORI DEVI FOUNDATION 46/13M KALYANI CIVIL LINES MEERUT V. COMMISSIONER OF INCOME TAX MEERUT

IAPL/363/2010

AI Insights

The case involves the Kastoori Devi Foundation, a charitable trust, appealing against the decision of the Income Tax Appellate Tribunal (ITAT) which denied the renewal of exemption under section 80G of the Income Tax Act, 1961. The foundation argued that it met all the conditions for renewal as stipulated under section 80G(5)(v) and maintained its registration under section 12A as a charitable trust. The primary contention was whether the trust could be considered a private trust due to the trusteeship being confined to a single family, which could affect its status and eligibility for tax exemptions. The High Court of Allahabad found that the tribunal needed to clarify how the trust's earnings were utilized, leading to the remand of the case for further investigation on this point.

• Counselvise Citation: [2018] 140 COUNSELVISE.COM (IT) 695202 (HC-MEERUT)
• Appeal Type: Others
• Pronouncement Date: 12-03-2018
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: KRISHNA AGARWAL
• Assessee Lawyers: RAKESH AGRAWAL; SUYASH AGRAWAL
• Keywords: Charitable Trust; Exemption renewal; Income tax appeal; Private trust; Public trust
• Section: 12A; 260A; 80G(5)

Judgement Text

"Court No. - 35 Case :- INCOME TAX APPEAL No. - 363 of 2010 Appellant :- Kastoori Devi Foundation,46/13m Kalyani Civil Lines,Meerut Respondent :- Commissioner Of Income Tax,Meerut Counsel for Appellant :- Rakesh Ranjan Agrawal,Suyash Agrawal Counsel for Respondent :- Krishna Agarwal Hon'ble Bharati Sapru,J. Hon'ble Neeraj Tiwari,J. Heard Sri Suyash Agrawal learned counsel for the appellant assessee and Sri Krishna Agarwal learned counsel for the department. This is an appeal of the assessee filed under section 260A of the Income Tax Act, 1961 against the order of the tribunal dated 30.6.2010 by which the application made by the appellant for renewal of exemption under section 80G (5)has refused by the tribunal. The questions of law sought to be answered are as under: \"1. Whether on the facts and circumstances of the case, the ITAT was right in holding that the CIT rightly denied the renewal of exemption under section 80G of the Act when the appellant satisfied the condition laid down under section 80G (5) (v) and the registration under section 12A of the Act was available to the appellant in the status of charitable trust and the registration under section 80G was granted and available upto 31.3.2009? 2. Whether clauses no.B(3), B(6), B(7) and B (8) having never carried out by the trust and ancillary activities of the trust which the trust may carry can be a circumstances for denying renewal of registration under section 80G of the Act? 3. Whether the appellant trust can be treated as private trust new clause 5 (14) of the trust deed during the availability of the registration under section 12A of the Act? 4. Whether the ITAT is correct not to consider that for granting approval under section 80G of the Act the CIT can not act as assessing authority but the enquiry should be confined to find out with the trust satisfy prescribed condition laid down under section 80G(v) of the Act?\" The admitted facts of the case are that the registration of the so-called charitable trust is in existence as granted under section 12A of the Income Tax Act. The tribunal has sought to make a distinction between a public trust and a private trust. There is no dispute with regard to the objects of the trust being of a charitable in nature as it is running an educational institution and other charitable activities associated with it. The doubt arises from the fact that trustees of the trust belong to an individual family and the trusteeship is evolving only on that family to the exclusion of others and the public. The utilisation of the money earned by the trust is not very clear whether it is being expended for the public or whether it is passing on the family and in his hands. The matter needs consideration on this point. We therefore remand the matter to the tribunal for recording a finding as to how profits and the earnings of the trust are expended and utilised. He may do so within a period of three months from the date of production of the certified copy of this order being placed by the appellant before the tribunal. The questions to be answered after the order passed by the tribunal in remand. The appeal stands disposed of finally. No costs. Order Date :- 12.3.2018 rk "