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Income Tax Appellate Tribunal, “A” BENCH, PUNE
Before: SHRI R.S.SYAL, VP & SHRI PARTHA SARATHI CHAUDHURY, JM
आदेश / ORDER PER PARTHA SARATHI CHAUDHURY, JM:
This appeal preferred by the assessee emanates from the order of the Ld. CIT(Exemption), Pune dated 29.08.2019 passed u/s.12AA(1)(b)(ii) of the Income Tax Act, 1961 (hereinafter referred to as „the Act‟) as per the grounds of appeal on record.
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The crux of the grievance of the assessee in this appeal is the denial of registration u/s.12AA of the Act.
The brief facts in this case are that the applicant E-filed Form 10A for registration of the Trust/Institution u/s.12A of the Act on 04.02.2019. The Trust is registered under BPT Act, 1950 with registration number E- 988/Ratnagiri dated 23.08.2017. Submissions in respect of copy of BPT/Society registration and Trust Deed/ Memorandum of Association have been uploaded by the assessee along with application in Form 10A. Thereafter, the Ld. CIT(Exemption) perused the application of the assessee and it was found that the assessee/ applicant Trust has not uploaded certain details i.e. (i) Irrevocability Clause; (ii) Whether beneficiaries of the Trust are a section of the public or some specific individuals; (iii) In the event of dissolution of Trust, the funds/assets of the Trust will be transferred only to some other Trust having similar objectives.
These aforesaid clauses were not found in the Trust Deed as observed by the Ld. CIT(Exemption) and therefore, he opined in his order dated 29.08.2019 that satisfaction regarding genuineness of the charitable nature of the activities of the applicant Trust cannot be arrived at and therefore, the application for registration u/s.12AA of the Act of the assessee trust was rejected.
At the time of hearing through video conference, the Ld. AR of the assessee vehemently submitted that all these requisite clauses were already there in the Trust Deed uploaded along with Form 10A and was there before
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the Ld. CIT(Exemption). Taking us to the Copy of the Trust Deed filed in the paper book before us, the Ld. AR invited our attention to the objects clauses of the Trust and submitted, it is clearly evident that these objects are not for any specific group of individuals but rather they were for a larger section of the public of the society.
4.1 Thereafter, the Ld. AR of the assessee drew our attention at Clause 13 of the said Trust Deed wherein it is written that “The Trust created by this trust Deed shall be irrevocable provided that in the event of Trust failing to function for any reason, or in the event of Trustees being of the unanimous opinion that this Trust should be dissolved and/or amalgamated with a Charitable Trust or any other Trust having objects more or less similar to this Trust. The Trustees may apply to the authority prescribed by law for permission to dissolved and/or amalgamate with any other Public Charitable Trust and in that event the Trust Property shall be transferred to any other public charitable Trust as the trustees with the consent of such authority as aforesaid, on such terms and conditions as the Trustees with concurrence of such authority may think fit and proper.” Therefore, the Ld. AR submitted that this clause takes care of the “Irrevocability Clause” and also of the dissolution clause of the Trust in which case, the funds/assets of the Trust shall be transferred to similar public charitable trust having similar objects.
4.2 The Ld. AR of the assessee also submitted that there is an acknowledgement of the E-proceedings Response which has been filed by the assessee in the portal of the Department on 29th June, 2019 and therein, at Column 7, the assessee had responded to the notices issued by the Ld.
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CIT(Exemption) asking for requisite details. The Ld. CIT(Exemption) had passed his order dated 29.08.2019 whereas the assessee had uploaded all these details on 21.06.2019. Therefore, it is evident that these were in front of the Ld. CIT(Exemption) while he was passing the impugned order.
The Ld. DR failed to substantiate the facts that when in the original Trust Deed submitted before the Ld. CIT(Exemption), these clauses were present then what was reason for the Ld. CIT(Exemption) to again call for the same details. The Ld. DR also failed to substantiate that when E-proceedings compliance of the Departmental notices has been done by the assessee on 21.06.2019 and order of the Ld. CIT(Exemption) was passed on 29.08.2019 and when all the details were in front of him then why they were not considered and adjudicated upon by the Ld. CIT(Exemption).
We have heard the rival contentions and perused the relevant documents on record. We have also analyzed the facts and circumstances of the case. We observe that the denial of grant of registration u/s.12AA of the Act to the assessee trust by the Ld. CIT(Exemption) was on the ground that certain requisite details were not filed by the assessee as called for from the office of the Ld. CIT(Exemption). These details were (i) Irrevocability Clause ; (ii) Description of the beneficiaries of the Trust ; (iii) after effect of the dissolution of the Trust and the mannerism in which funds/assets of the Trust were to be transferred to similar public charitable Trust. We find on detailed perusal of the Trust Deed that these clauses are already there in the Trust Deed of the assessee filed before the Department. We also find that the response filed by the assessee to the notices of the Ld. CIT(Exemption) in the
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Income Tax Portal were uploaded dated 21.06.2019 whereas the order of the Ld. CIT(Exemption) was dated 29.08.2019 and therefore, it is crystal clear that all these details were before him at the time of passing the order. The Ld. DR could not justify the reasons given by the Ld. CIT(Exemption) for denial of the registration u/s.12AA of the Act to the assessee trust.
6.1 On the contrary, it is found that the Trust Deed of the assessee itself contains those clauses which the Ld. CIT(Exemption) wanted them to be incorporated. When they were already there in the Trust Deed, there was no need for the assessee again to amend the Trust Deed. That further, when all the details were filed through E-portal of the Department on 21.06.2019, we do not find any reason why the Ld. CIT(Exemption) made remark that these details were not filed by the assessee so that genuineness of the activities would not be ascertained in respect of the assessee trust.
That further, substantially the objects of the Trust clearly spells out that it has been created to render service to poor and needy people, to give scholarship to any educational or medical institution for research, to pay the costs or expenses of medical treatment required to be given to any deserving poor patient who cannot afford to meet the same otherwise, to establish hospitals, medical centers, clinics, dispensaries for giving medical aid to poor, to help any person directly or indirectly who are affected by act of God i.e. calamity such as earthquake, floods etc or other accidents. Therefore, this assessee trust shall serve the public at large and benefit the society and it is not for any specific group of individuals. These facts on record were not refuted by the Ld. DR.
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Taking the totality of facts and circumstances into consideration, in the interest of justice, we, therefore, set aside the order of the Ld. CIT(Exemption) and direct the Ld. CIT(Exemption) to grant registration to the assessee trust u/s.12AA of the Act.
In the result, appeal of the assessee is allowed.
Order pronounced on 08th day of December, 2020.
Sd/- Sd/- R.S.SYAL PARTHA SARATHI CHAUDHURY VICE PRESIDENT JUDICIAL MEMBER ऩुणे / Pune; ददनाांक / Dated : 08th December, 2020. SB आदेश की प्रतिलऱपप अग्रेपिि / Copy of the Order forwarded to : अऩीऱाथी / The Appellant. 1. प्रत्यथी / The Respondent. 2. 3. The CIT(Exemption), Pune. , आयकर अऩीऱीय अधधकरण, “ए” बेंच, 4. ववभागीय प्रतततनधध ऩुणे / DR, ITAT, “A” Bench, Pune. गार्ड फ़ाइऱ / Guard File. 5.
आदेशानुसार / BY ORDER, // True Copy // तनजी सधचव / Private Secretary आयकर अऩीऱीय अधधकरण, ऩुणे / ITAT, Pune.
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Date 1 Draft dictated on 08.12.2020 Sr.PS/PS 2 Draft placed before author 08.12.2020 Sr.PS/PS 3 Draft proposed and placed JM/AM before the second Member 4 Draft discussed/approved by AM/JM second Member 5 Approved draft comes to the Sr.PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr.PS/PS 7 Date of uploading of order Sr.PS/PS 8 File sent to Bench Clerk Sr.PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R 11 Date of dispatch of order