SHRI RAGHVENDRA SEWA TRUST,JAMMU vs. COMMISSIONER OF INCOME TAX (EXEMPTIONS0, CHANDIGARH

PER RAVISH SOOD, JM

he present appeal filed by the assessee is directed against the order passed by the Commissioner of Income-tax (Exemptions), Chandigarh, dated 29.09.2017 under Sec.

12AA(1)(b)(ii) of he Income-tax Act, 1961 (hereinafter referred to as the’Act’) .

iled an application in Form 10A with the CIT(Exemptions), Chandigarh[hereinafter 'T(Exemptions)] on 30.03.2017 seeking registration under Sec. 12A(a) of the Act.

As per the records, the aims and objects of the assessee trust were to establish, create and set up

necessary infrastructure for the welfare, good health, well being, catering and looking after the cows, calves, bu

falos and also to promote and inculcate the faith of public at large towards service

of the sacred cow; to initiate steps to provide necessary help which will be in large interest of public at large especially for those who were deserving, needy, helpless on many counts in their life, irrespective of caste, colour, creed or religion; to establish, maintain or grant aid to homes for the aged, orphanages or other establishments for the relief and help to the poor, needy and destitute people, orphans, widows and aged persons; to grant relief and assistance to the needy victims during natural calamities, such as famine, earthquake, flood, fire, pestilence etc. and to give donations and other assistance to institutions, establishments or persons engaged in such relief work; to imbibe, promote and inculcate amongst the public at large the moral, ethical and spiritual values for improving and alleviating the standards of life and in this process to impart education encompassing within its fold various branches thereof; and to grant aid or render assistance to other public charitable trusts or institutions established with similar objectives.

T(Exemptions) called for certain information and deliberated on the same. Observing, that both

al the course of proceedings before him, had observed, that the assessee trust had vide a resolution dated 15.12.2014 sought to merge into itself another trust viz. Baba Doodhadhari Trust, Rajouri, and resultantly take over the management and control of eight properties viz. temples/ashrams/gaushalas situated in the State of Jammu & Kashmir. It was observed by the Cc

T(Exemptions) that the aforesaid merger of Baba Doodhadhari Trust, Rajouri into the assessee

trust suffered from certain serious infirmities viz. (i). that the settler of the assessee trust who was not clearly in possession of temples/ashrams/gaushalas had sought to settle the same to a group of trustees who also were not clearly brought out to be the settlers/trustees of the properties concerned; (ii). that the merger of an irrevocable trust ie Baba Doodhadhari Trust into the assessee trust which was supposedly required to be based on the decision of the trust being merged was however sought on the basis of a resolution passed by the assessee trust; (iii). that even otherwise the aforesaid arrangement of merger had not fructified as the resolution dated 15.12.2014 passed by the assessee trust was not registered with the competent authority; (iv). that no evidence as regards the ownership and the legal status of the eight temples/trust proposed to be taken over by the assessee trust was furnished; and (v). that as in the State of Jammu & Kashmir alienation of land rights and ownership is guided by special provisions endemic to the state and its special status, therefore, it was beyond comprehension as to how the assessee trust

could comprise of trustees who were not the permanent residents of the state. As can be gathered

from the order passed by the CIT(Exemptions) the aforesaid infirmities had primarily weighed in his

mind while rejecting the application filed by the assessee trust for registration under Sec. 12A of the Act on the ground that both the objects and the genuineness of the activities of the assessee

trust were not established.

(i). The CIT(Exemptions) in his order passed under Sec. 12AA(1)(b)(ii) of the Act had observed that the settler of the assessee trust viz. Sant Shree Prabhu Dass Ji Maharaj of Doodhadhari Ashram, Haridwar who was not clearly in possession of certain temples/ashrams had sought to settle the same to a group of trustees who also were not clearly brought out to be the settlers/trustees of the properties concerned. Also, it was observed by him that no evidence as regards the ownership and the legal status of the eight temples/trust proposed to be taken over by the assessee trust was furnished in the course of the proceedings. On a perusal of the records, we find that it was the claim of the assessee before the CIT(E) that the settler of the assessee trust viz. Sant Shree Prabhu Dass Ji Maharaj of Doodhadhari Ashram, Haridwar was in possession of the eight properties i.e temples/gaushalas/ashrams, and for managing, control and administering of the same the assessee trust was created on 18.11.2014 viz. (i). temple, gaushala & ashram at shastri nagar, jammu; (ii). gaushala at jeevan nagar, jammu; (iii).temple complex at pacca danga, jammu; (iv). temple site at akhnoor, district jammu; (v). temple site at village godhar; (vi). temple site a village dab; (vii). temple and gaushala at rajouri; and (viii). temple complex at karlai dhar road,

udhampur. It was submitted by the assessee that the aforementioned properties which were situated in the State of Jammu & Kashmir were constructed 35 to 40 years ago by the devotees o Braham Rishi Baba Shree Doodhadhari Ji Maharaj, Haridwar, who after his death in the year 1984 was succeeded by Sant Shree Prabhu Dass Ji Maharaj. It has been the claim of the assessee tha’ the aforementioned eight properties were donated by the devotees to Doodhadhari Ashram,

Haridwar, and on the same temples/gaushalas/ashrams were established/constructed. In sum and substance, it was submitted by the assessee that the aforesaid temples/gaushalas/ashrams were very old properties which earlier were being managed by the devotees with the advise/directions o' Braham Rishi Baba Shree Doodhadhari Ji Maharaj, Haridwar, and after the latters death in the year 1984, with that of his successor viz. Sant Shree Prabhu Dass Ji Maharaj. On a perusal of the records, we find that the assessee in order to drive home its claim that the aforesaid eigh properties viz. temples/gaushalas/ashrams were very old properties which had came up with the contributions of the devotees scattered in the State of Jammu & Kashmir, had therein vide his reply dated 26.09.2017 filed with the CIT(Exemptions) copies of the sale deeds, gift deeds, court

decrees etc. in respect of the land on which these ashrams/gaushalas/temples had been constructed. Ld. A.R had in the course of hearing of the appeal drawn our attention to copies of the aforesaid documents placed at Page 115-170 of the assesses ‘Paper book’ (for short ‘APB’). In the backdrop of the aforesaid facts we are unable to persuade ourselves to subscribe to the view taken

by the CIT(Exemptions) that that the settler of the assessee trust was not in possession of temples/ashrams/gaushalas under consideration.

(ii). | We shall now advert to the observation of the CIT(Exemp'

irrevocable trust i.e Baba Doodhadhari Trust into the assessee

Page |[5

ions) that the merger of an tust which was supposedly

required to be based on the decision of the trust being merged was however sought on the basis of a resolution passed by the assessee trust. We have given a thoughtful consideration to the aforesaid observation of the CIT(Exemptions) and in the absence of cl the records in context to the issue under consideration are unable to On a perusal of the “trust deed”, dated 18.11.2014 of the assessee

arity of facts discernible from summarily accept the same.

rust, we find that it is stated

that the earlier trust namely “Baba Doodhadhari Trust, Rajouri” formed vide trust deed dated Nil

shall be deemed to have been merged with the assessee trust in view of the unanimous resolution

of the respective trustees of Doodhadhari Ashram, Rajouri. Also, it is urther stated that Clause 40

& 42 of the earlier trust namely “Baba Doodhadhari Trust, Rajouri” provides for merger of the same

with any other trust with similar objects. In the backdrop of the aforesaid facts, we are unable to comprehend that as to on what clear basis the CIT(E) had concluded that the merger of Baba

Doodhadhari Trust into the assessee trust was sought on the basis of a resolution passed by the assessee trust. At the same time, we also cannot remain oblivious of the fact that the assessee

had also neither dispelled the ambiguity emerging in respect of the aforesaid issue before the CIT(E) nor tried to dislodge the said observation recorded in the imp

hearing of the appeal before us.

ugned order in the course of (iii). | We shall now take up the observation of the CIT(E) that as in the State of Jammu &

Kashmir alienation of land rights and ownership is guided by special provisions endemic to the state and its special status, therefore, it was difficult to comprehend

that as to how the assessee

trust comprised of trustees who were not the permanent residents of the State of Jammu &

Kashmir. In sum and substance, the CIT(E) held a conviction that now when as per the special

provisions as regards ownership and alienation of land rights in the State of Jammu & Kashmir only

its permanent residents could purchase land in the state, therefore, it was beyond comprehension

as to how persons other than permanent residents were taken up as trustees by the assessee

trust. On a perusal of the records, we find that the assessee in reply to a query raised by the CIT(E) in context of the aforesaid issue under consideration, had submitted, that the assessee trust

comprised of only the settler viz. Sant Shree Prabhu Dass Ji Maharaj of Doodhadhari Ashram,

Haridwar and one trustee viz. Shri. Hemant Rungta R/o. Haridwar, who were not permanent

residents of the State of Jammu & Kashmrr. It was stated by the assesee tha

impediment for a non-s

of Jammu & Kashmir. In order to fortify its aforesaid claim, it was submitted by there was no legal

ate subject to become a trustee of a trust operating and located in the State

he assessee viz. (i).

that the restriction was on the non-state subjects as regards acquiring of immovable property in the State of Jammu & Kas only in directly or indirectly, in non-stat

had no the decision making process of the trust for its welfare and did not ‘e subject was not aj

acquired any prope

trustees. Also, we find

based on a legal opinion tha

perusal

of the view takei

n

consideration, we find

based on a legal opinion had

hai

berated

hmir under the local laws; (ii). that since the non-subject trustee took part

hold any property,

his name, therefore, the restrictions as regards acquiring of property by the pplicable in its case; and (iii). that even otherwise the assessee trust

rty, directly or indirectly, in the name of any of t

was obtained by it from a senior advocate viz. S

not been taken cognizance of by him.

he non-state subject

hat the aforesaid reply filed by the assessee with the CIT(Exemptions) was hri. D.C Raina. On a by the CIT(Exemptions) in context of the aforesaid issue under he reply of the assessee on the said aspect which was specifically

at length on the declining of the registration to the assessee trust by vide his order passed under Sec. 12AA(1)(b)(ii) of the Act and are unable to find favour with the reasoning accorded by him for so concluding. We find that the provisions of Sec. 12AA which con

“The [Principal society or insti shall:-

‘empla

es the procedure for registration, reads as under :

Commissioner or] Commissioner, on receipt of an application for registration of a ution made under clause : (a) [or clause (aa) of sub-section (1)] of section 12A

(a) Call for such documents or information from the society or institution as he thinks necessary in order to satisfy himself about the genuineness of activities of the society or institution and may also such inquiries as he may deem necessary in this behalf; and (b) after satisfying himself about the objects of the society or institution and the genuineness of its activities, he :-

(i) shall pass an order in writing registering the society or institution;

(ii) shall, if he is not so satisfied, pass an order in writing refusing to registe! institution ”

The aforesaid provisions mandates examination of two basic conditions for grant o r the society or registration to an assessee under Sec. 12AA viz. (i) examination of objects of the society or institution; and (ii)

satisfaction of the registering authority about the genuineness of the activities of the society or institution on the basis of inquiries. Insofar the observation of the CIT(Exemptions) that the objects

of the assessee trust are not established, we do not find ourselves to be in agreement with the same. In our considered view the aims and objects of the assessee trust to establish, create and set up necessary infrastructure for the welfare, good health, well being, catering, and looking after

the cows, calves, buffalos and also to promote and inculcate the faith of public ai

service of the sacred cow; to initiate steps to provide necessary help which will be in of public at large especially for those who were deserving, needy, helpless on many counts in their

life, irrespective of caste, colour, creed or religion; to establish, maintain or grant aid

the aged, orphanages or other establishments for the relief and help to the poor, needy and destitute people, orphans, widows and aged persons; to grant relief and assistance

victims during natural calamities, such as famine, earthquake, flood, fire, pestilence e

donations and other assistance to institutions, establishments or persons engaged

work; to imbibe, promote and inculcate amongst the public at large the moral, ethical and spiritual

large towards

large interest

to homes for to the needy

ic. and to give

in such relie

values for improving and alleviating the standards of life and in this process to impart education

encompassing within its fold various branches thereof; and to grant aid or render

assistance to other public charitable trusts or institutions established with similar objectives clearly brings the same within the realm of the definition of the term “charitable purpose” as envisaged in Sec. 2(15)

of the Act. Accordingly, not being able to subscribe to the observation of the CIT(Exemption) as regards the objects of the assessee society which as observed by us hereinabove are clearly

established to be charitable in nature, we vacate his order to the said extent.

Educational and Charitable Trust (ITA No. 710 of 2010; dated 05.10.2011)

observed that Sec. 12AA of the IT Act required satisfaction in respect of the genui

had inter alia

ineness of the activities of the trust, which includes the activities which the trust is undertaking at present and also which it may contemplate to undertake. In our considered view the CIT(Exemptions) in the case before us while verifying the genuineness of the activities of the assessee trust had remained wel within his juri iction while examining the taking over of the management and control of the eigh’ properties i.e ashrams/temples/gaushalas scattered over the State of Jammu & Kashmir by the assessee trust. We are unable to accept the claim of the Id. A.R that the CIT(Exemptions) by examining the taking over of the aforesaid eight properties by the assessee trust had traversed beyond the scope of juri iction that was vested with him under Sec. 12AA of the Act. At the same time, as observed by us hereinabove, the observations and the reasoning adopted by the CIT(Exemptions) for drawing of adverse inferences as regards the genuineness of the activities o

the assessee trust does not inspire much of confidence in the backdrop of the facts discernible

from the records. In fact, as had been deliberated at length by us hereinabove, certain factual observations recorded by the CIT(Exemptions) for drawing of adverse inferences as regards the genuineness of the activities of the assessee trust clearly militate against the facts borne from the records to which our attention was drawn by the Id. A.R during the course of the hearing of the appeal. As noticed by us hereinabove, certain observations recorded by the CIT(E) are clearly divorced and shorn of the specific replies that were filed by the assessee trust in its attempt to dispel the doubts as regards certain issues pertaining to its aforesaid activities. Be that as it may, in our considered view the matter in all fairness requires to be revisited for a limited purpose by the CIT(Exemptions), who in the course of the set-aside proceedings is directed to re-consider the application filed by the assessee trust for grant of registration under Sec. 12AA of the Act after considering the replies/material available on his record as well as calling for further details as he may deem fit in so far the same pertain to and are relevant for the purpose of making of necessary verification as regards the genuineness of the activities of the assessee trust. Needless to say, the CIT(Exemptions) in the course of the set-aside proceedings shall afford a reasonable opportunity

of being heard to the assessee trust which shall remain at a liberty to place on record fresh

material/documents to fortify the genuineness of its activities in furtherance of its aims and objects.

endeavour shall be made by the Bench to pronounce the order within 60 days from the date on which the hearing of the case was concluded but, where it is not practicable so to do on the ground

of exceptional and extraordinary circumstances of the case, the Bench shall fix a future day for pronouncement of the order, and such date shall not ordinarily be a day beyond a further period of 30 days and due notice of the day so fixed shall be given on the notice board. As such, “ordinarily”

the order on an appeal should be pronounced by the bench within no more than 90 days from the date of concluding the hearing. It is, however, important to note that the expression “ordinarily” has been used in the said rule itself. This rule was inserted as a result of directions of Hon'ble High Court in the case of Shivsagar Veg Restaurant Vs ACIT [(2009) 317 ITR 433 (Bom)] wherein it was inter alia, observed as under: “We, therefore, direct the President of the Appellate Tribunal to frame and lay down the guidelines in the similar lines as are laid down by the Apex Court in the case of Anil Rai (supra) and to issue appropriate administrative directions to all the benches of the Tribunal in that behalf. We hope and trust that suitable guidelines shall be framed and issued by the President of the Appellate Tribunal within shortest reasonable time and followed strictly by all the Benches of the Tribunal. In the meanwhile (emphasis, by underlining,

supplied by us now), all the revisional and appellate authorities under the Income-tax Act are directed to decide matters heard by them within a period of three months from the date case is closed for judgment’.

In the rule so framed, as a result of these directions, the expression “ordinarily” has been inserted in the requirement to pronounce the order within a period of 90 days. The question then arises whether or not the passing of this order, beyond a period of ninety days in the case before us was necessitated by any “extraordinary” circumstances.

Vs. JSW Limited & Ors. [ITA No. 6264/Mum/18; dated 14/05/2020, wherein it was observed as under:

“Let us in this light revert to the prevailing situation in the country. On 24th March, 2020, Hon'ble Prime Minister of India took the bold step of imposing a nationwide lockdown, for 21 days, to prevent the spread of Covid 19 epidemic, and this lockdown was extended from time to time. The epidemic situation being grave, there was not much of a relaxation in subsequent lockdowns also. In any case, there was unprecedented disruption of judicial wok all over the country. As a matter of fact, it has been such an unprecedented situation, causing disruption in the functioning of judicial machinery, that Hon'ble Supreme Court of India, in an unprecedented order in the history of India and vide order dated 6.5.2020 read with order dated 23.3.2020, extended the limitation to exclude not only this lockdown period but also a few more days prior to, and after, the lockdown by observing that “In case the limitation expired after 15.03.2020 then the period from 15.03.2020 till the date on which the lockdown is lifted in the juri ictional area where the dispute lies or where the cause of action arises shall be extended for a period of 15 days after the lifting of lockdown”. Hon'ble Bombay High Court, in an order dated 15th April 2020, has, besides extending the validity of all interim orders, has also observed that, “It is also clarified that while calculating time for disposal of matters made time-bound by this Court, the period for which the order dated 26th March 2020 continues to operate shall be added and time shall stand extended accordingly”, and also observed that “arrangement continued by an order dated 26th March 2020 till 30th April 2020 shall continue further till 15th June 2020”. It has been an unprecedented situation not only in India but all over the world. Government of India has, vide Notification dated 19th February 2020, taken the stand that, the coronavirus “should be considered a case of natural calamity and FMC (i.e. force majeure clause) maybe invoked, wherever considered appropriate, following the due procedure...”. The term ‘force majeure’ has been defined in Black’s Law Dictionary, as ‘an event or effect that can be neither anticipated nor controlled’ When such is the position, and it is officially so Notified by the Government of India and the Covid-19 epidemic has been notified as a disaster under the National Disaster Management Act, 2005, and also in the light of the discussions above, the period during which lockdown was in force can be anything but an “ordinary” period.

We have given a thoughtful consideration to the aforesaid observations of the tribunal and finding ourselves to be in agreement with the same, therein respectfully follow the same. As such, we are of the considered view that the period during which the lockout was in force shall stand excluded for the purpose of working out the time limit for pronouncement orders, as envisaged in Rule 34(5) of the Appellate Tribunal Rules, 1963. 11. Accordingly, the appeal of the assessee trust is allowed for statistical purposes and the application filed by the assessee society for grant of registration under Sec. 12AA of the IT Act is restored for a limited purpose to the file of the CIT(E) for fresh consideration in terms of our

aforesaid observations.

Order pronounced under rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1962, by placing

the details on the notice board. (L. P. Sahu) (Ravish Sood) ACCOUNTANT MEMBER JUDICIAL MEMBER Date 30.06.2020

areer fr wfafete aratfta/Copy of the Order forwarded to: 1. 3rcreteff / The Appellant

HTeRMTAR! BY ORDER, 34/ Tera Taft (Dy./Asstt. Registrar) erent artteie ar hHTOT/ITAT, Amritsar. Bench, Amritsar.