SHRI SHRI MAA ANANDMAYEE KUCHAMAN TRUST,NAGAUR V. CIT(E), JAIPUR, JAIPUR

ITA 1381/JPR/2024

AI Insights

The case involves Shri Shri Maa Anandmayee Kuchaman Trust, which appealed against the decision of the CIT (E), Jaipur, rejecting its application for registration under section 12AB of the Income Tax Act, 1961, and cancelling its provisional registration. The CIT (E) had determined that the trust's activities constituted business activities and did not serve the public benefit as required for charitable status. The tribunal examined the financial records and activities of the trust and agreed with the CIT (E)'s findings, leading to the dismissal of the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 474501 (ITAT-JAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY DHARIWAL; LD
• Assessee Lawyers: P.C. PARWAL; LD
• Keywords: Charitable institution
• Section: 12A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH “A”, JAIPUR BEFORE SHRI GAGAN GOYAL, ACCOUNTANT MEMBER AND SHRI NARINDER KUMAR, JUDICIAL MEMBER ITA No. 1381/JPR/2024 Shri Shri Maa Anandmayee Kuchaman Trust, Kuchaman Fort Kuchamancity, Nava Nagaur- 341508 PAN No. AAMTS6374D ...... Appellant Vs. CIT (E), Jaipur …...Respondent Appellant by : Mr. P. C. Parwal, CA, Ld. AR Respondent by : Mr. Sanjay Dhariwal, CIT-DR, Ld. DR Date of hearing : 10/02/2025 Date of pronouncement : 21/02/2025 O R D E R PER GAGAN GOYAL, A.M: This appeal by the assessee is directed against the order of CIT(E), Jaipur dated 30.09.2024 passed u/s. 12AB(1)(ii)(B) the Income Tax Act, 1961 (in short ‘the Act’).The assessee has raised the following grounds of appeal: 1. The Ld. CIT(E) has erred on facts and in law in rejecting the application filed by the assessee u/s. 12A(1)(ac)(iii) in Form No. 10AB seeking registration u/s. 12AB of IT Act, 1961 on the ground that (i) activities carried out by the assessee are business in nature & religious places are not for benefit of public but for private benefits and (ii) genuineness of activities has not been proved by not appreciating the 2 background of creation of trust and by making various incorrect and irrelevant observations. 2. The Ld. CIT(E) has further erred on facts and in law in cancelling the provisional registration granted by CIT u/s 12A (1) (ac)(vi) of IT Act, 1961. 3. The appellant craves to alter, amend and modify any ground of appeal. 4. Necessary cost be awarded to the assessee. 2. The brief facts of the case are that the assessee is a Trust, established on 24.02.1978 by the ex-ruler of Kuchaman, Raja Hari Singh Ji in which his wife Rani Prem Kumari Ji, his daughter Rajlaxmi Shah and Shri Babu Bhai Kastur Chand Shah were the trustees. Vide his letter dated: 15.02.1979, ex-rule donated his immovable property consisting of the Fort of the Kuchaman to the trust. The applicant filed an application in form no. 10AB seeking registration u/s. 12AB of the Act vide dated: 27.03.2024. After considering the replies of the assessee in response to the notices issued by the office of the Ld. CIT (E), Jaipur, application of the assessee was dismissed on following grounds: A). Business activity & Religious Places not for benefit, but for private benefits and B). Genuineness of Activities. In addition to the above, provisional registration granted earlier u/s. 12A (1) (ac) (vi) of the Act vide dated: 24.09.2021 is also cancelled. The assessee being aggrieved with the same preferred the present appeal before us. We have gone through the order of the Ld. CIT (E), Jaipur alongwith the submissions of the assessee and paper book submitted before us. 3 We have gone through the order of the Ld. CIT (E), Jaipur and to analyse the same, we deem it fit to analyse the audited financials of the assessee first then legal issues may be examined. We have gone through the audited balance-sheet, 3 income & expenditure account and receipt and payment account of the assessee and observed as under: A) Corpus of the assessee is in negative, rather if the security deposit of Rs. 5.24 Cr. from lessee M/s. Marwar Fort & Palace Pvt. Ltd. (Which is actually refundable) would not have been there, the assessee’s cash flow would have been negative as the assessee was never in surplus; B) It is also not understandable that from where the assessee assigned the value of Fixed Assets, i.e. Rs. 3, 04, 86,938/- (Building at Kuchaman Fort as per Annexure-3). When the same was received as donation, there must be a corresponding credit in the balance- sheet in the form of building fund or building corpus fund etc. C) Nature of Misc. Fixed Assets is also not very clear as in Annexure-4 it is shown as “Claims paid to Shiva Corporation Ltd., to the extent not written off”. It certainly confirms that the security deposit received of Rs. 5.24 Cr. Had been used here, whatever may be the issue. D) Income and Expenditure account also reflects that the assessee does not have any contribution from the public or from any of the charitable activities as such. Rather receiving Lease Rent and Tower Rent from M/s. Marwar Fort & Palace Pvt., M/s. Bharti Hexacom Limited and M/s. Indus Towers Limited respectively there is no other receipt which can be categorised and establishes that the assessee trust is a public charitable and religious trust. E) Same I & E account further confirms that there is no expenditure other than the expenditure inextricably linked to earn the revenue mentioned (supra). Similar, picture is being presented by the Receipt and Payment account also. 4. In the light of above it can be certainly hold that whatever may be there in the objects clause of the trust, its activities are not in the nature of charitable and religious and rather the same are ex-ruler’s personal and family affairs in the guise of public and charitable trust. The findings of the Ld. CIT (E), Jaipur as 4 enumerated in para 2 of his order found to be correct and no infirmity is found in the same. 5. We do not see any reason to interfere in the order of the Ld. CIT (E), Jaipur, hence the grounds raised by the assessee are dismissed as the same are not tenable and the order of the Ld. CIT (E), Jaipur is confirmed. 6. In the light of above, appeal of the assessee is dismissed. Order pronounced in the open court on21st Day of February 2025. Sd/- Sd/- (NARINDER KUMAR) (GAGAN GOYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Jaipur, िदनांक/Dated: 21/02/2025 Copy of the Order forwarded to: 1. अपीलाथ\r/The Appellant , 2. \u000eितवादी/ The Respondent. 3. आयकर आयु\u0015 CIT 4. िवभागीय \u000eितिनिध, आय.अपी.अिध., Sr.DR., ITAT, 5. गाड\u001e फाइल/Guard file. BY ORDER, //True Copy// (Asstt. Registrar) ITAT, Jaipur Details Date Initials Designation 1 Draft dictated on PC on 21.02.2025 Sr.PS/PS 2 Draft Placed before author 21.02.2025 Sr.PS/PS 3 Draft proposed & placed before the Second Member JM/AM 4 Draft discussed/approved by Second Member JM/AM 5. Approved Draft comes to the Sr.PS/PS Sr.PS/PS 6. Kept for pronouncement on Sr.PS/PS 7. File sent to the Bench Clerk Sr.PS/PS 5 8 Date on which the file goes to the Head clerk 9 Date of Dispatch of order "