Appeal details
Counselvise Citation
[2025] 140 COUNSELVISE.COM (IT) 18404 (ITAT-BANGALORE)
Assessee PAN
Bench
Appeal Number
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
14-03-2025
Appeal Filed By
Assessee
Order Result
Partly Allowed
Bench Allotted
C
Assessment Year
misc
Judgement Text
"ITA No.1848/Bang/2024 \nKeshava Smaraka Trust, Mandya \n \nIN THE INCOME TAX APPELLATE TRIBUNAL \n“C’’BENCH: BANGALORE \n \nBEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER \nAND \nSHRI KESHAV DUBEY, JUDICIAL MEMBER \n \nITA No.1848/Bang/2024 \n Assessment Year: NA \n \nKeshava Smaraka Trust \nNo.1150 M.G. road \nChannapatna Town \nRamanagara \nMandya 562 001 \nKarnataka \n \nPAN NO : AADTK0962C \nVs. \n \n \n \nITO \nExemptions Ward \nMysore \nAPPELLANT \n \nRESPONDENT \n \nAppellant by \n: \nSri Prasanna, A.R. \nRespondent by \n: \nMs. Neera Malhotra, D.R. \n \nDate of Hearing \n: \n26.12.2024 \nDate of Pronouncement : \n14.03.2025 \n \nO R D E R \n \nPER KESHAV DUBEY, JUDICIAL MEMBER: \n \n \nThis appeal at the instance of assessee is directed against the \norder of ld. CIT(Exemptions) dated 25.07.2024 vide DIN & Notice \nNo. ITBA/EXM/F/EXM45/2024-25/1067033105(1).The assessee \nhas raised the following grounds of appeal: \n \n\nITA No.1848/Bang/2024 \nKeshavaSmaraka Trust, Mandya \n \nPage 2 of 5 \n \n \n \n2. \nBrief facts of the case are that the Assessee is a Public \ncharitable trust established vide deed dated 29th of May 1995 for \ncarrying out activities of education, rural development and social \nservices including imparting health education, other formal or non-\nformal education to the public in general and rural masses etc. The \nAssessee trust made an application for registration in Form 10AB \nunder section 12AB of the Income Tax Act,1961 on 08/01/2024. \nThe assessee filed the necessary details such as financial \nstatements, trust deed including the amended trust deed by \nincorporating the mandatory investment, utilization, irrevocable, \ndissolution, accounts and beneficiary clauses as claimed by the \nassessee, whereas the ld. CIT(E) while rejecting the application for \nregistration had observed that assessee made partial submissions \nonly and not submitted the amended trust deed. The ld. CIT(E) on \n\nITA No.1848/Bang/2024 \nKeshavaSmaraka Trust, Mandya \n \nPage 3 of 5 \nthe one hand observed that no activities have been commenced \ntowards the attainment of its objects and on the other hand also \nobserved that assessee has expended very meagre amount towards \nobjects of the trust and accordingly concluded that assessee has \nnot commenced its activity. Based on this conclusion, the ld. \nCIT(E) denied the registration under section 12AB of the Income-\ntax Act, 1961.Aggrieved by the order of rejection dated 25.7.2024, \nthe assessee has preferred an appeal before this Tribunal. \n \n3. \nThe ld. A.R. of the assessee vehemently submitted that ld. \nCIT(E) erred in rejecting the application in form 10AB without \nappreciating the fact that quantum of funds applied for charitable \npurposes is not a pre condition for the grant of registration u/s \n12AB of the Act. Further, ld. A.R. of the assessee submitted that \nld. CIT(E) has not made any adverse finding with regard to the \ngenuineness or the object the trust and accordingly exceeded his \njurisdiction in rejecting the application of the assessee. \n \n4. \nThe ld. D.R. on the other hand, supported the order of the \nauthorities below. \n \n5. \nWe have heard the rival submissions and perused the \nmaterials available on record. On going through the order of \ncancellation/rejection passed by ld. CIT(E), we find that ld. CIT(E) \nrejected the application for registration with an observation that \nvery meager amount was expended towards the object of the trust \nand accordingly concluded that assessee has not commenced its \nactivity. We are unable to understand that even though meager \namount was spent by the Assessee Trust, how the ld. CIT(E) \nconcluded that assessee has not commenced its activity at all. \nFurther, we are of considered opinion that for the purpose of \ngranting registration u/s 12AB of the Act, the ld. CIT(E) should call \n\nITA No.1848/Bang/2024 \nKeshavaSmaraka Trust, Mandya \n \nPage 4 of 5 \nfor all the relevant documents/information from the trust or make \nsuch enquiries in order to satisfy himself about the genuineness of \nthe activity of the trust and the compliance of such requirement of \nany other law for time being in force by the trust as are material for \nthe purpose of achieving its object and shall pass an order in \nwriting either by granting the registration of the trust or cancelling \nits registration after affording a reasonable opportunity of being \nheard. The mere fact that the quantum of expenditure is meager \ndoes not render the trust non-genuine or its activity becomes \nineligible for registration u/s 12AB of the Act. Further, we are of \nthe opinion that ld. CIT(E) has not brought any material on record \nto demonstrate that the trust has violated any of the provisions of \nthe section 12AB of the Act. In our Opinion, for granting \nregistration, the ld. CIT (E) is required to verify whether the objects \nof the Trust are genuinely charitable in nature and whether the \nactivities which the Trust proposed to carry on are genuine in the \nsense that they are in line with the objects of the Trust. \n \n5.1 \nBefore us, the ld. A.R. of the assessee submitted the copy of \nletter along with the copy of amended trust deed filed before the ld. \nCIT(E) on 9.7.24, whereas on going the order of ld. CIT(E), we \nfound that the ld. CIT(E) has observed that assessee has not \nsubmitted the amended trust deed by incorporating the mandatory \nclauses- investment, utilization, irrevocable, dissolution, accounts \nand beneficiary clause in the trust deed. Further, ld. CIT(E) \nobserved that assessee has made partial submission only. Before \nus, the assessee trust has filed various documents & photos \ntowards trust activities along with the financial statements of \nvarious years and submitted that the activity of the trust are \ngenuine and according to the object of the trust. On going through \nthe trust deed, we are of the considered opinion that the object of \n\nITA No.1848/Bang/2024 \nKeshavaSmaraka Trust, Mandya \n \nPage 5 of 5 \nthe trust are purely charitable as defined u/s 2(15) of the Act and \nthe assessee trust is actively pursuing its objective. \n5.2 \nHowever, we are also of the opinion that as the ld. CIT(E) has \nobserved that assessee has made partial submissions and also not \nsubmitted the amended trust deed by incorporating the mandatory \nclauses, as well as keeping in view the activity reports filed before \nus along with the financial statement which may not be available \nwith the ld.CIT(E), we deem it fit to remit the issue back to the file \nof ld. CIT(E) with the above observations. The ld. CIT(E) will decide \nthe issue in accordance with the law after providing reasonable \nopportunity of being heard to the assessee. The assessee is \ndirected \nto \nsubmit/furnish \nall \nthe \nrelevant \ndocuments/records/information as required by ld. CIT(E) and shall \nnot seek unnecessary adjournments. It is ordered accordingly. \n6. \nIn the result, appeal of the assessee is partly allowed for \nstatistical purposes. \nOrder pronounced in the open court on 14th Mar, 2025 \n \n Sd/- \n(Waseem Ahmed) \nAccountant Member \n \n Sd/- \n (Keshav Dubey) \n Judicial Member \n \n \nBangalore, \nDated 14th Mar, 2025. \nVG/SPS \n \nCopy to: \n \n1. The Applicant \n2. The Respondent \n3. The CIT \n4. The DR, ITAT, Bangalore. \n5 \nGuard file \n \n \n \n \n \n \n \n By order \n \n \n Asst. Registrar, \n ITAT, Bangalore. \n"
Mehul