THE COMMISSIONER OF INCOME TAX V. M/S ANNAPOORNESWARI TRUST

ITA/786/2008

AI Insights

The case involves an appeal by the Commissioner of Income Tax against the order of the Income Tax Appellate Tribunal (ITAT), which directed the registration of M/s Annapoorneswari Trust under Section 12AA of the Income Tax Act, 1961. The trust, established in 1991, conducts educational activities in Mysore and sought registration after expanding its educational services over the years. The initial denial of registration was based on amendments to the trust deed, which the ITAT found did not affect the trust's eligibility. The High Court upheld the ITAT's decision, dismissing the revenue's appeal.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 736291 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 16-09-2014
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Respondent
• Court: HIGH COURT
• Department Lawyers: A SHANKAR; M LAVA
• Assessee Lawyers: JEEVAN NEELARGI
• Keywords: Charitable Trust; Educational institution; Income tax appeal; Registration under section 12AA
• Section: 12AA; 260-A

Judgement Text

" 1 IN THE HIGH COURT OF KARNATAKA AT BANGALORE DATED THIS THE 16th DAY OF SEPTEMBER, 2014 PRESENT THE HON' BLE MR. JUSTICE N.KUMAR AND THE HON' BLE MRS. JUSTICE RATHNAKALA Income Tax Appeal No 786 OF 2008 BETWEEN 1.THE COMMISSIONER OF INCOME TAX C R BUILDING QUEENS ROAD BANGALORE 2.THE COMMISSIONER OF INCOME TAX (CENTRAL) C.R. BUILDING QUEENS ROAD BANGALORE ... APPELLANTS (BY SRI JEEVAN J. NEELARGI, ADVOCATE) AND M/S ANNAPOORNESWARI TRUST, NO.17, APMC SHOPPING COMPLEX, SHESHADRI IYER ROAD, MYSORE. ... RESPONDENT (BY SRI A. SHANKAR & M.LAVA, ADVOCATES) … This Income Tax Appeal is filed under Section 260-A of Income Tax Act, 1961 praying to formulate the 2 substantial questions of law and to allow the appeal and set aside the Order dated 14-3-2008 passed by the ITAT, Bangalore in ITA No. 958/BANG/2007 and confirm the order passed by the Appellate Commissioner confirming the order passed by the Commissioner of Income Tax (Central), Bangalore. This Income Tax Appeal coming on for Hearing this day, N. Kumar J., delivered the following: JUDGMENT The revenue has preferred this appeal against the order passed by the Tribunal directing the Commissioner of Income Tax (Central) to grant registration under Section 12AA of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for the period as claimed by the assessee. 2. The assessee – Trust was originally constituted in the year 1991 with an intention of carrying out charitable activity of imparting education and other allied activities in the city of Mysore. In the year 1998, Board of Trustees was reconstituted. After such reconstitution, the trust identified rented building at No.8A, Gokulam Main Road, Jayalakshmipuram, 3 Mysore and started a Nursery and Primary School in the building. In the year 1999, they obtained agricultural land for housing their school building. They applied for necessary approval from the Deputy Commissioner (Revenue), Mysore and also availed permission to construct school building. The building plan was approved by the Town Planning Authority, Mysore and Belavadi Panchayat. The construction work was commenced in the financial year 2001-02. They borrowed loan from KSFC. They also borrowed further amount. In the financial year 2000-01, the trust commenced High School section with 8th standard and the financial year ended 31.3.2002 and on 31.3.2003 they added 9th and 10th standard respectively. In the financial year ending 31.3.2006, the trust had commenced PUC in Science discipline and II PUC was commenced in the current financial year. The total strength of the students was around 945. They applied for registration under Section 12AA of the Act. The said request was declined on the ground that there is an 4 amendment to the Trust Deed and such amendments render the trust ineligible for registration. Aggrieved by the said order, the assessee preferred an appeal to the Tribunal. 3. The Tribunal in its order has set out the object of the trust in detail and also set out the classes conducted by the trust and the number of students. Nearly 80 teaching and non-teaching staffs are also working. Therefore, it is not in dispute that the trust is carrying on the objects for which it is established and therefore, the trust is entitled to be registered under Section 12AA of the Act and accordingly, a direction was issued to register the trust. Aggrieved by the said order, the present appeal is filed. 4. We have heard the learned Counsel for both parties. 5. We have gone through the impugned order where the entire objects of the trust is clearly set out, the number of classes conducted by the trust and also 5 the fact that there are 80 persons who constitute teaching and non-teaching staff in the said institution. Once the object of the trust is fulfilled, the trust cannot be denied the benefit of Section 12AA of the Act. If there are deviations, it is open to the authorities to take appropriate action and that cannot be a ground for denying registration under Section 12AA of the Act when once the assessee satisfies all the requirements of Section 12AA of the Act. Hence, we do not see any merit in this appeal. 6. Accordingly, the appeal is dismissed and we answer the substantial questions of law in favour of the assessee and against the revenue. Sd/- Judge Sd/- Judge Nsu/- "