Smt. M.K.Parukutty Amma Charitable Trust, Bangalore V. DIT(Exemption), Bangalore

ITA 643/BANG/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0643 (ITAT-BANGALORE)
• Duration Of Justice: 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 19-06-2009

Judgement Text

ITA NO.642 & 643/B/09 1 IN THE INCOME TAX APPELL ATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH BANGALORE BENCH BANGALORE BENCH BANGALORE BENCH A AA A BEFORE BEFORE BEFORE BEFORE GEORGE GEORGE K, JUDICIAL MEMBER GEORGE GEORGE K, JUDICIAL MEMBER GEORGE GEORGE K, JUDICIAL MEMBER GEORGE GEORGE K, JUDICIAL MEMBER AND AND AND AND SHRI SHRI SHRI SHRI A AA AKB KBKB KBE EE ER BASHA, R BASHA, R BASHA, R BASHA, A A A ACCOUNTANT MEMBER CCOUNTANT MEMBER CCOUNTANT MEMBER CCOUNTANT MEMBER ITA NO.642 & 6 43/BANG/2009 SMT. M.K PARUKUTTY AMMA CHARITABLE TRUST, NO.59, 100 FEET ROAD, INDIRANAGAR, BANGALORE. . APPELLANT VS. THE DIRECTOR OF INCOME-TAX (EXEMPTIONS), BANGALORE. . RESPONDENT APPELLANT BY : SHRI H.V GOUTHAMA RESPONDENT BY : SHRI JASON P BOAZ O R D E R O R D E R O R D E R O R D E R PER PER PER PER GEORGE GEORGE GEORGE GEORGE GEORGE GEORGE GEORGE GEORGE K KK K, , , , JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER : : : : THESE APPEALS PREFERRED BY THE ASSESSEE ARE DIRECTE D AGAINST TWO SEPARATE ORDERS OF THE DIRECTOR OF INCOME-TAX ( EXEMPTIONS), BANGALORE, BOTH DATED 27.4.2009. THE DIRECTOR OF IN COME-TAX (EXEMPTIONS) VIDE HIS ORDERS, HAS REFUSED TO GRANT REGISTRATION U/S 12AA OF THE ACT AND HAS NOT GIVEN APPROVAL U/S 80G( 5 OF THE ACT. 2. FIRST, WE SHALL DEAL WITH THE ISSUE OF GRANTING REGISTRATION TO THE TRUST. THE ASSESSEE TRUST WAS ESTABLISHED BY WAY O F TRUST DEED ON 2.9.2008. THE ASSESSEE FILED APPLICATION IN FOR M NO.10A ON 31.3.2008, SEEKING REGISTRATION U/S 12A OF THE ACT. THE DIRECTOR OF ITA NO.642 & 643/B/09 2 INCOME-TAX (EXEMPTIONS) IN THE IMPUGNED ORDER HAS M ENTIONED OBJECT CLAUSE OF THE TRUST DEED NAMELY CLAUSE 3(D) AND 3(H ) ARE NON CHARITABLE AND HAVE COMMERCIAL IMPORT AND, THEREFORE, TRUST CA NNOT BE GRANTED REGISTRATION. THE DIRECTOR OF INCOME-TAX (EXEMPTIO NS), FURTHER HELD THAT AUTHORITY GRANTING REGISTRATION HAS TO SATISFY ABOU T THE OBJECTS OF THE TRUST AND THE GENUINENESS OF THE ACTIVITIES. THE T RUST BEING NEW HAS NOT CARRIED OUT ANY ACTIVITIES IN FURTHERANCE OF IT S OBJECTS. IT IS TRUE THAT THE TRUST AIMS TO PERFORM LAUDABLE ACTIVITIES, HOW EVER, DURING THE COURSE OF PROCEEDINGS FOR REGISTRATION, THE TRUST H AS NOT FILED ANY EVIDENCE IN SUPPORT OF ITS ACTIVITIES. IN ABSENCE OF ANY ACTIVITY, IT IS NOT POSSIBLE FOR DIRECTOR OF INCOME-TAX (EXEMPTIONS) TO VERIFY THE GENUINENESS OF THE ACTIVITIES OF THE TRUST AS REQUI RED U/S 12AA OF THE ACT. AGGRIEVED BY THE ORDER OF THE DIRECTOR OF INCOME-T AX (EXEMPTIONS), ASSESSEE IS IN APPEAL BEFORE US. 3. THE AR SUBMITTED THAT TRUST HAS BEEN DENIED REGI STRATION MAINLY ON THE GROUND THAT THE AUTHORITY CONCERNED WAS NOT IN A POSITION TO VERIFY THE GENUINENESS OF THE ACTIVITIES OF THE TRU ST. IT WAS FURTHER SUBMITTED THAT CLAUSES 3(D) AND 3(H) OF THE TRUST A RE NOT HAVING ANY COMMERCIAL IMPORT. IT WAS SUBMITTED THAT CLAUSE 3( D) PROVIDES FOR ASSISTANCE, LITERATURE SERVICE AND ACCOMMODATION TO TRAVELERS FOR ADVANCEMENT OF INDIAN CULTURE FOR THE BENEFIT OF TH E NATION. SIMILARLY, IT WAS SUBMITTED IN CLAUSE 3(H) OF TRUST DEED MENTIONS ABOUT ITA NO.642 & 643/B/09 3 ESTABLISHMENT, MAINTENANCE AND GRANT OF AID TO DHAR MASHALAS FOR THE USE OF PUBLIC AND CONSTRUCTION OF PUBLIC ROAD, PAR K, GARDENS, WELLS, TUBE WELLS, TANKS ETC. THE OBJECTS ENUMERATED IN CLAUSES 3(D) AND 3(H) AT NO STRETCH OF IMAGINATION CAN BE TERMED AS COMMERCIAL IN NATURE. 4. IT WAS CONTENTED BY THE AR THAT THE DIRECTOR OF INCOME-TAX (EXEMPTIONS) BEFORE DENYING THE BENEFIT OF REGISTRA TION HAD NOT GRANTED OPPORTUNITY OF BEING HEARD. IT WAS SUBMITTED THAT C ERTAIN DETAILS WERE CALLED BY THE ITO ON BEHALF OF THE DIRECTOR OF INCO ME-TAX (EXEMPTIONS) AND ASSESSEE TRUST FILED THE REPLY VIDE LETTER DATE D 21.2.2009. THE IMPUGNED ORDER WAS PASSED WITHOUT CALLING FOR ANY E XPLANATION ON THE DETAILS FILED. IT WAS FURTHER CONTENDED BY THE AR, IF THE ACTIVITIES HAS NOT COMMENCED, NECESSARILY, THE DIRECTOR OF INCOME- TAX (EXEMPTIONS) OUGHT TO HAVE PURSUED THE AIMS AND OBJECTS OF THE T RUST TO ARRIVE AT A CONCLUSION WHETHER THE TRUST IS GENUINE OR NOT. IT WAS SUBMITTED THAT DIRECTOR OF INCOME-TAX (EXEMPTIONS) IS NOT TO LOOK INTO SOURCE OF INCOME BUT ONLY TO SEE AS TO HOW THE INCOME IS APP LIED. IF THE SAME IS APPLIED FOR CHARITABLE OR RELIGIOUS PURPOSE, THEN T HE TRUST IS TO BE ALLOWED REGISTRATION. HE RELIED ON THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF SANJEEVAMMA HANUMANTHE GOWDA C HARITABLE TRUST VS. THE DIRECTOR OF INCOME-TAX (EXEMPTIONS), 285 ITR 327 AND THE PUNJAB & HARYANA HIGH COURT IN THE CASE OF SO NEPAT HINDU EDUCATIONAL & CHARITABLE SOCIETY VS. CIT & ANOTHER, 278 ITR 262 FOR THE PROPOSITION THAT AT THE TIME OF REGISTRATION, T HE DIRECTOR OF INCOME- ITA NO.642 & 643/B/09 4 TAX (EXEMPTIONS) NEED TO EXAMINE THE AIMS AND OBJEC TS OF THE TRUST WHEN ITS ACTIVITIES HAS NOT COMMENCED. 5. THE LEARNED DR ON THE OTHER HAND SUPPORTED THE F INDINGS OF THE DIRECTOR OF INCOME-TAX (EXEMPTIONS). 6. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE TRUST WAS CREATED ON 2.9.2008. THE IT O(EXEMPTIONS) ATTACHED TO THE OFFICE OF THE DIRECTOR OF INCOME-TA X (EXEMPTIONS) HAD ISSUED A LETTER REQUIRING CERTAIN DETAILS. TO THIS , THE ASSESSEE FILED DETAILS AND ON RECEIPT OF THESE DETAILS FROM THE AS SESSEE, THE DIRECTOR OF INCOME-TAX (EXEMPTIONS) PASSED ORDER REFUSING TO GRANT REGISTRATION U/S 12AA OF THE ACT, WITHOUT CALLING FOR EXPLANATIO N OF THE DETAILS FILED BY THE ASSESSEE TRUST. MOREOVER, IN THE LETTER OF OFFICE OF DIT(E) DATED 12.2.2009, CLARIFICATION WERE SOUGHT FOR WITH REFER ENCE TO CERTAIN CLAUSE OF THE DEED WHICH ARE NON EXISTENT, WHICH BY ITSELF SHOWS THE NON APPLICATION OF MIND BY THE AUTHORITY CONCERNED. TH EREFORE, IN THE INTEREST OF JUSTICE, WE ARE OF THE VIEW THAT MATTER NEEDS TO BE RE- EXAMINED BY DIRECTOR OF INCOME-TAX (EXEMPTIONS) AFR ESH, AFTER GRANTING ASSESSEE PROPER OPPORTUNITY OF BEING HEARD. THE D IRECTOR OF INCOME- TAX (EXEMPTIONS), WHILE PASSING FRESH ORDER SHALL K EEP IN MIND THE DICTUM LAID DOWN BY JURISDICTIONAL HIGH COURT (SUPR A). 7. THE APPEAL FILED BY THE ASSESESE AGAINST THE OR DER PASSED U/S 12AA IS ALLOWED FOR STATISTICAL PURPOSE. ITA NO.642 & 643/B/09 5 8. THE APPEAL FILED AGAINST THE ORDER OF THE DIRECT OR OF INCOME-TAX (EXEMPTIONS) FOR NOT GRANTING APPROVAL U/S 80G OF T HE ACT IS ONLY CONSEQUENTIAL AND THE IMPUGNED ORDER IS SET SIDE TO THE FILE OF THE DIRECTOR OF INCOME-TAX (EXEMPTIONS) FOR FRESH EXAMI NATION. 6. IN THE RESULT, BOTH THE APPEALS FILED BY THE AS SESSEE ARE ALLOWED FOR STATISTICAL PURPOSE. PRONOUNCED IN THE OPEN COURT ON 20TH NOV, 2009. SD/ SD/ SD/ SD/- -- - SD/ SD/ SD/ SD/- -- - ( (( (A AA AKBER BASHA KBER BASHA KBER BASHA KBER BASHA ) ) ) ) ( (( (GEORGE GEORGE K) GEORGE GEORGE K) GEORGE GEORGE K) GEORGE GEORGE K) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE DATED : 20 /11/09 VMS. COPY TO : 1. THE ASSESSEE 2. THE REVENUE 3. THE CIT CONCERNED. 4. THE CIT(A) CONCERNED. 5. DR 6. GF 7. GF, ITAT, NEW DELHI. BY ORDER ASST. REGISTRAR, ITAT, BANGAL ORE.