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Income Tax Appellate Tribunal, DELHI BENCH ‘B’ : NEW DELHI
ASSESSEE BY : Shri Arun Mishra, Advocate REVENUE BY : Shri J.K. Mishra, CIT DR Date of Hearing : 21.07.2022 Date of Order : 02.08.2022
ORDER PER SHAMIM YAHYA, ACCOUNTANT MEMBER : This appeal by the assessee is directed against the order of the ld.
CIT (Exemption), Delhi dated 31.01.2020 2. The grounds of appeal raised by the assessee read as under :- “1. On the point of facts and point of law the Commissioner of Income Tax (Exemption) erred in rejecting the grant of registration u/s 12A on the grounds that the activities of trust are not for public charity.
2. That that registration u/s 12A be granted to the trust as all the activities of the trust are charitable in nature and relief be given to the assessee.” the claim of registration under section 12A of the Income-tax Act, 1961 (for short ‘the Act’) :-
“ORDER u/s 12AA (1)(b) r.w.s.12A OF THE INCOME TAX ACT, 1961
The applicant filed online application on 22.07.2019 In Form No.10A seeking registration u/s 12AA of the Income Tax Act, 1961. The applicant was issued questionnaire dated 02.09.2019 requesting it to submit certain documents in support of its claim. The case was fixed for hearing from time to time. The details filed were taken on record and examined.
2. The assessee trust has been formed on 22.06.2015, purported to be on the basis of directions of Mrs Sudesh Khanna (deceased) for creation of a library or reading room In the memory of her husband and mother as tribute and homage and to cherish their memories.
3. Copy of the will shows that, inter alia, she owned an immovable asset at C-27, Vikaspuri, New Delhi, which was to be developed as a full-fledged library. Papers in support of the title of the property show that it is under litigation, without any clear title.
4. Further, the supporting documents do not show as to how and to whom access to the Library would be granted. Admittedly, the library has been constructed, but due to stay by court order, access to public has not been given so far. In view of the this it can not be said that the it is being used by general public.
5. The provisions of section 12AA stipulate the following conditions for registration/s 12A of the I.T. Act, 1961 :- (i) The objects of the society/Trust should be of charitable in nature. (ii) The activities of the society/Trust should be genuine.
In light of above facts, the activities of trust cannot be considered to be for the benefit of Public at large i.e. for public charity. Therefore, the conditions for granting registration u/s 12AA is not satisfied. Accordingly, the application filed by the applicant for grant of registration u/s 12A is hereby rejected.
Against this order, assessee is in appeal before us. We have heard both the parties and perused the records.
Ld. counsel of the assessee has summarized his plea as under :-
“Facts of the case : 1) The trust "DEVKI PRAKASH CHHAYA ME" was formed on 22.06.2015 on the direction of late Mrs. Sudesh Khanna's will. 2) Late Mrs. Sudesh Khanna was intellectual teacher and her husband Prakash chand khanna was Professor in Delhi University. Late Mrs. Devki Devi was her mother. Mrs. Sudesh Khanna wanted to give tribute to her late husband and mother so she wished in her will for creation of trust and also suggested the name "DEVKI PRAKASH CHAYYA ME" which included name of her mother and husband both. 3) Late Mrs. Sudesh khanna donated her and her husband's life time saving to the proposed trust in the shape of C-27, Vikas Puri house New Delhi and approximately +50 lakh FDR'S. 4) Late Mrs. Sudesh khanna in her will mentioned the name of her 4 cousin sisters to form the charitable trust with main objective of library for students. 5) The cousins sisters created the trust but someone objected and objection was filed against the probate in favor of trust which was decided in favor of the trust on 12.07.2017 before filing the registration application on 07.02.2020. Grounds of Appeal:- 1. On the point of facts and point of law the commissioner of Income Tax (Exemption) erred in rejecting the grant of
That the registration u/s 12A be granted to the trust as all the activities of the trust are charitable in nature and relief be given to the assessee.
That the assessee be allowed to amend, add, withdraw, delete, substitute ground of appeal before disposal of appeal.
Ground no.1 The learned C.I.T. (Exemptions) passed the order in a casual manner neither applying the mind nor considering the documents filed before him. While rejecting the registration application following observations were made:-
Point no. 3 of Order (Page No 36 of Paper Book)
Quote:- Copy of the will shows that, inter alia, she owned an immovable assets at C-27, Vikaspuri, New Delhi, which was to be developed as a full-fledged library. Papers in support of the title of the property show that it is under litigation, without any clear title We filed the reply dt 24.10.2019 before the Ld. CLT. (Exemptions) and at page no.14-17 of the letter probate in favor of the trust was attached. Without considering this document. Ld. C.I.T. (Exemptions) said the property did not have clear title.( page no 16 to 18) of the paperbook Point no. 4 of order(Page No 36 of Paper Book)
Quote:- Further, the supporting documents do not show as to how and to whom access to the library would be granted. Admitted, the library has been constructed, but due to stay by court order, access to public has not been given so far. In view of the this it cannot be said that the it is being used by general public.
The Ld. CLT. was wrong while pointing that from the document filed it is not clear how and whom access of the library would be granted. We have filed the trust deed with the reply filed on 24.10.2019 before Id. CI.T (exemption) on page no.01 to 11 and reproduced point no. 9 at page no. 3 of the trust deed (page no-05 to- 15 )of paper book This TURST has been established to carry on the following charitable activities for the benefit of persons of all classes, castes, & section of the society without any discretion of religion, cast and faith:-
A) To renovate as the TRUSTEES may deem fit to set up LIBRARY AND OR READING ROOMS at C-27, Vikaspuri, New Delhi and or such other places TRUSTEES may decide from time to time to setup library or reading rooms for the benefit of needy persons.
B) To provide high level BOOKS, MAGAZINES, PERIODICALS, ENCYCLOPEDIA DICTIONARIES NEWSPAPERS AND ALMANACS as well as computers and digital library resources in the library.
C) To maintain LIBRARIES/READING ROOMS in good condition and provide healthy environment for studies.
D) To safeguard the libraries, books, TRUST properties through proper functioning and insurance.
E) To do all such acts of charity which are permissible as per Indian laws and include any mode of education (School, university) Medical facilities up to any extent permissible and or such other activities which may be the need of hour.
The above clause shows that access was to the person of all classes, cast and section of society.
The ld. C.I.T, (Exemptions) by giving these observations rejected the application Grounds no 2 & 3 of appeal are Statical in nature hence not discussed.
We request you to kindly give relief to the assessee by giving direction for registration of the trust U/S 12A.”
Further, at Paper Book (PB) page nos. 6 to 15 copy of Trust Deed is attached. Further, PB Pages Nos.16 to 19 is an order of Grant of Probate under Indian Succession Act.
District Judge submitted in the paper book. We agree with the assessee’s submission that ld. CIT has passed a hasty order without appreciating the true purport of the documents submitted before him. It is settled law that even administrative order should be consistent with natural justice. It includes fair hearing, fair appreciation of documents and a speaking order.
In this view of the matter, we remit the issue to the file of ld. CIT (A). The ld. CIT (A) shall consider the issue afresh after giving the assessee proper opportunity of being heard.
In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on this 2nd day of August, 2022.