Om Tat Sat Foundation, Ahmedabad v. The DIT(Exemp.), Ahmedabad

ITA 318/AHD/2013 | 2012-2013
Pronouncement Date: 31-05-2010 | Result: Allowed

Appeal Details

RSA Number 31820514 RSA 2013
Bench Ahmedabad
Appeal Number ITA 318/AHD/2013
Appellant Om Tat Sat Foundation, Ahmedabad
Respondent The DIT(Exemp.), Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 31-05-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 31-05-2010
Date Of Final Hearing 23-05-2013
Next Hearing Date 23-05-2013
Assessment Year 2012-2013
Appeal Filed On 04-02-2013
Judgment Text
A IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD A BENCH . .. . . .. .'#$% '#$% '#$% '#$% & & & & ' ' ' ' BEFORE S/SHRI MUKUL KR. SHRAWAT JUDICIAL MEMBER AN D A.K GARODIA ACCOUNTANT MEMBER) ITA NO.318/AHD/2013 [BLOCK PERIOD : 2012-2013] OM TAT SAT FOUNDATION 90 NILLKANTH VILLA BUNGALOWS NR. BOPAL GRAM PANCHAYAT OFFICE BOPAL AHMEDABAD 380 058. PAN : AAAT0 3297 R ( /VS. DIRECTOR OF INCOME TAX (EXEMPTIONS) NATURE VIEW BLDG. AHMEDABAD. ( (( (*+ *+ *+ *+ / APPELLANT) ( (( ( -*+ -*+ -*+ -*+ / RESPONDENT) ( . / 0 / ASSESSEE BY : NONE / 0 / REVENUE BY : SHRI D.K. SINGH SR. DR (2 / 3&/ DATE OF HEARING : 23 RD MAY 2013 4#5 / 3&/ DATE OF PRONOUNCEMENT : 31/5/2013 6 / O R D E R PER MUKUL KR. SHRAWAT JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE ARISING FROM AN ORDER OF THE DIRECTOR OF INCOME TAX (EXEMPTIONS) AHMEDABAD DATED 10.12.2 012. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUND: 1. THAT THE LD.DIRECTOR OF INCOME TAX (EXEMPTIONS) AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DENYING REGISTRATION TO THE ASSESSEE AS A PUBLIC CHARITABLE TRUST UNDER ITA NO.318/AHD/2013 -2- SECTION 12AA OF THE INCOME TAX ACT 1961 ON THE GRO UNDS THAT HE WAS NOT SATISFIED WITH THE GENUINENESS OF THE AC TIVITIES OF THE ASSESSEE CITING REASON THAT THERE IS NO DISSOLUTION CLAUSE IN TRUST DEED OF THE ASSESSEE AND CONCLUDED THAT THE A CTIVITIES OF THE ASSESSEE ARE NOT GENUINE. 3. ON THE DATE OF HEARING NO ONE HAS APPEARED FROM THE SIDE OF THE ASSESSEE HOWEVER CONSIDERING THE ISSUE BEING TRIV IAL IN NATURE WE HAVE DECIDED TO PROCEED EX PARTE QUA THE ASSESSEE AFTER HEARING THE LEARNED DR WHO HAS SUPPORTED THE REJECTION OF REGI STRATION APPLICATION. 4. ON PERUSAL OF THE IMPUGNED ORDER PASSED UNDER SE CTION 12AA OF THE ACT WE HAVE NOTED THAT THE LEARNED OFFICER HAS DENIED THE APPROVAL OF REGISTRATION ON THE GROUND THAT THERE W AS NO CLAUSE IN THE TRUST DEED IN RESPECT OF THE DISTRIBUTION OF THE AS SETS ON THE DISSOLUTION OF THE TRUST. THE RELEVANT PARAGRAPHS OF THE IMPUG NED ORDER ARE REPRODUCED BELOW: 3. ON VERIFICATION OF THE RECORDS AND REPLY OF THE ASSESSEE IT IS SEEN THAT THERE IS NO DISSOLUTION CLAUSE IN THE TRU ST DEED FURTHER IT IS ALSO NOTICED THAT TRUST DOES NOT HAVE ANY CLA USE THAT THE TRUST WILL BE NOT DISSOLVED AND IT IS PERPETUAL. AS PER THE BOMBAY PUBLIC TRUST ACT AND SETTLED POSITION OF LAW A TRUST IS A PERPETUAL TRUST. IN CASE THE ACTIVITIES OF THE TRUS T CANNOT BE CARRIED OUT THE SAME WITH THE SANCTION OF CHARITY COMMISSIONER AND AS PER THE PROCEDURES OF THE BOMBA Y PUBLIC TRUST ACT THE ASSETS ETC. HAVE TO BE TRANSFERRED T O ANOTHER TRUST CARRYING ON SIMILAR ACTIVITIES. NO SUCH CLAUSE IS T HERE IN THE DEED AND THEREFORE THE APPROVAL IS DENIED. NOW THIS ISSUE IS COVERED BY SEVERAL DECISIONS OF T HIS TRIBUNAL WHEREIN CONSISTENTLY HELD THAT THE QUESTION OF DIST RIBUTION OF ASSETS ON DISSOLUTION IS NOT REQUIRED TO BE EXAMINED AT THE PRELIMINARY STAGE OF GRANT OF REGISTRATION UNDER SECTION 12AA OF THE I.T .ACT. IN THIS ITA NO.318/AHD/2013 -3- CONNECTION WE HEREBY REFER A DECISION OF THE ITAT IN THE CASE OF SITARAM KUTIR CHARITABLE TRUST VS. CIT GANDHINAGAR IN ITA NO.71/AHD/2013 ORDER DATED 17-5-2013; WHEREIN IT WAS HELD AS UNDER: 5. WE HAVE HEARD BOTH THE SIDES. WE HAVE ALSO PERU SED THE RELEVANT ORDERS. AS FAR AS THE ARGUMENT OF LD.DR IS CONCERNED WE MAY LIKE TO APPRECIATE THE SAME THAT A TRUST-DEE D CAN INCORPORATE A CLAUSE IN RESPECT OF VESTING OF ASSET S OF A TRUST IN CASE OF DISSOLUTION BUT WE CANNOT APPROVE ANY APPR EHENSION TO BE CONCEIVED AT THE INITIAL STAGE OF REGISTRATION O F A TRUST. THE REVENUE DEPARTMENT HAS OTHER WAYS AND MEAN TO OVERC OME SUCH AN APPREHENSION NOW RAISED BY THE LD.DR MR.D.K .SINGH. IN OUR HUMBLE UNDERSTANDING THE PROCEDURE FOR REGIS TRATION AS INCORPORATED BY THE IT ACT U/S. 1 2AA IS THAT A COM MISSIONER ON RECEIPT OF AN APPLICATION FOR REGISTRATION OF A TRUST SHALL CALL FOR SUCH DOCUMENTS OR INFORMATION AS HE THINKS NECE SSARY IN ORDER TO SATISFY HIMSELF ABOUT THE GENUINENESS OF A CTIVITIES OF THE TRUST AND AFTER SATISFYING HIMSELF ABOUT THE OB JECTS OF THE TRUST AS ALSO THE GENUINENESS OF ITS ACTIVITIES HE SHALL PASS AN ORDER REGISTERING THE TRUST. SO AT THE TIME OF REG ISTRATION THE REQUIREMENT OF THE STATUTE IS TO INVESTIGATE ABOUT THE GENUINENESS OF THE ACTIVITIES AND THE OBJECTS OF TH E TRUSTS. AS PER SECTION 1 2AA THERE IS NO SUCH REQUIREMENT THAT TH E LD.COMMISSIONER IS AUTHORIZED TO GO BEYOND THE CLAU SES AND SCOPE OF THIS SECTION. 5.1. WE HAVE EXAMINED A CITED PRECEDENT VIZ. SHRI S AI SAMARPAN TRUST CO.VS. CIT (2009) 23 DTR 125 (DELHI) WHEREIN THE CIT(A) HAD REJECTED THE REGISTRATION ON THE GROUND THAT THE TRUST-DEED DID NOT CONTAIN THE PROVISION O F ASSETS TREATMENTS ON DISSOLUTION. THE OBSERVATION OF THE H ONBLE COURT IS THAT THE TRUST BEING REGISTERED WITH THE SUB-REG ISTRAR AS A CHARITABLE TRUST AND THE TRUST BEING AN IRREVOCABLE TRUST THE OBVIOUS POSITION SHALL BE THAT THE CHARITY COMMISSI ONER SHOULD TAKE OVER THE ASSETS ON DISSOLUTION HENCE REJECTIO N OF REGISTRATION BY THE LD.COMMISSIONER ON THE GROUND T HAT THERE WAS NO SPECIFIC CLAUSE IN THE INSTRUMENT IN REGARD TO THE TREATMENT TO BE GIVEN IN THE EVENT OF DISSOLUTION W AS NOT ON A SOUND FOOTING. THE HONBLE COURT HAS FINALLY HELD T HAT ITA NO.318/AHD/2013 -4- CONSIDERING THE CLAUSES OF THE TRUST-DEED AND OTHER ACTIVITIES THE TRUST WAS GENUINE AND ENTITLED FOR REGISTRATION U/S . 12AA OF IT ACT. RESPECTFULLY FOLLOWING THIS DECISION AND THE R ATIO LAID DOWN IN OTHER CITED DECISIONS WE HEREBY HOLD THAT THE R EASON GIVEN BY THE LD.COMMISSIONER FOR REJECTION OF REGISTRATIO N U/S.12AA WAS NOT AS PER LAW HENCE DISMISSED. HOWEVER WE HA VE ALSO NOTED THAT THE LD.COMMISSIONER HAS NOT EXAMINED OTH ER ASPECTS AS PRESCRIBED IN THIS SECTION AS DISCUSSED SUPRA THEREFORE WE RESTORE THIS ISSUE BACK TO THE FILE OF LD.COMMISSIO NER TO EXAMINE THE OBJECT OF THE TRUST AND THE ACTIVITIES CARRIED ON BY THE TRUST AND IF FIND GENUINE GRANT THE REGISTRATION AS PER THE PROVISIONS OF LAW. SINCE THE ISSUANCE OF REGISTRATION IS A PRI MARY CONDITION FOR THE START OF THE CHARITABLE ACTIVITY OF THE TRU ST THEREFORE HAS TO BE DECIDED URGENTLY RATHER ON PRIORITY. WE THERE FORE DIRECT THE APPELLANT TO SUO MOTU APPEAR BEFORE THE LD.COMM ISSIONER WITHIN 15 DAYS ON RECEIPT OF THIS ORDER OF THE TRIB UNAL WITHOUT WAITING FOR ANY NOTICE FROM THE REVENUE DEPARTMENT AND SUBMIT ALL THE NECESSARY INFORMATIONS AS ALSO DOCUM ENTS SO THAT THE LD.COMMISSIONER SHALL PASS AN APPROPRIATE ORDER AS PER LAW AS DEEMED FIT WITHIN A REASONABLE TIME. WIT H THESE DIRECTIONS THIS GROUND OF THE ASSESSEE MAY BE TREA TED AS ALLOWED FOR STATISTICAL PURPOSES. RESPECTFULLY FOLLOWING THE ABOVE DECISION ON THE S AME LINE WE HEREBY RESTORE THE ISSUE OF GRANT OF REGISTRATION U NDER SECTION 12AA BACK TO THE STAGE OF DIRECTOR OF INCOME TAX (EXEMPT IONS) TO EXAMINE AFRESH AS PRESCRIBED UNDER LAW. THIS GROUND MAY BE TREATED AS ALLOWED FOR STATISTICAL PURPOSE ONLY. 5. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( . .. . . .. .'#$% '#$% '#$% '#$% /A.K. GARODIA) & & & & /ACCOUNTANT MEMBER ( /MUKUL KR. SHRAWAT) /JUDICIAL MEMBER