SHRI RAMJANKI TAPOVAN MANDIR,RANCHI vs. ITO EXEMPTION WARD, RANCHI

IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI BENCH, RANCHI

BEFORE S/SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER AND LAXMI PRASAD SAHU, ACCOUNTANT MEMBER

ITA No.332/Ran/2018

Sri Ramjanki Tapovan Mandir, Vs. CIT (Exemptions), Patna Nivarnapur, Chutia, Doranda, Ranchi-834 002 PAN/GIR No.RCHSO 5132 B (Appellant) .. ( Respondent)

Assessee by : Shri S.N.Rajgarhia, FCA Revenue by : Shri Inderjeet Singh, CIT(DR)

Date of Hearing : 29/08/2019 Date of Pronouncement : /10/2019

O R D E R Per Bench This appeal has been filed by the assessee against the order j/s.

12AA(3) of the Income Tax Act, 1961 of the Commissioner of Income

Tax(Exemptions). Patna dated 4.9.2018 cancelling the registration granted

u/s.12AA of the Act.

written submissions placed on record of the Tribunal and submitted that the

ld CIT(Exemptions), Patna has wrongly concluded that the activities of the

trust are not genuine as it has violated the objects of the trust. Ld A.R.

further submitted that the registration u/s.12AA of the Act was granted on

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the basis of new trust deed executed on 20.9.2005 and, therefore, the

earlier deeds are not relevant at all. Ld A.R. submitted that since the

registration was granted on the basis of trust deed of 2005, the question of

intimation to the department did not arise at all. Ld A.R. vehemently

pointed out that the entire facts were available with the CIT(Exemptions) at

the time of grant of registration u./s 12AA of the Act and the same was

granted on the basis of trust deed executed on 20.9.2005. Ld A.R. pointed

out that there was no violation of law or objects of the trust in adding

clause authorising sale of land of the trust and, there was no change in the

objects of the trust and no violation of either in income tax act or any other

law of the country in executing a new trust deed in the year 2005. Thus,

the CIT(Exemptions) was not justified in cancelling the registration of the

trust.

judgement of Hon’ble Supreme Court dated 1.5.2019 in Civil Appeal

No.4003 of 2019 filed by the present appellant-assessee and submitted that

the Hon’ble Supreme Court has categorically held that the Hon’ble High

Court of Jharkhand has completely misdirected itself in directing the Central

Bureau of Investigation to take over investigation in a matter, which relates

to the rights of the trustees to sell property of a religious trust or Deity,

giving rise to civil dispute. Ld A.R. submitted that in view of judgment of

Hon’ble Supreme Court, the order of the ld CIT(E) cancelling the

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registration cannot be held as sustainable. Thus, the registration granted to

the assessee u/s.12AA of the Act dated 7.5.2012 may kindly be restored.

situation when the Hon’ble Supreme Court has struck down the direction of

Hon’ble High Court of Jharkhand, wherein, the Hon’ble High Court directed

the Central Bureau of Investigation to take over the investigation then also

the order of cancellation of registration is sustainable looking into the facts

and circumstances of the case.

impugned cancellation order and submitted that the activities of the

assessee trust are not genuine, it has violated the objects of the trust by

changing original trust deed created in 1948, in the year 1987 and again in

the year 2005 against the wishes of the founder and without intimation to

the department. The ld CIT(E) also submitted that the assessee trust has

entered into the development agreement and sold the land belonging to

Deity, for which, Hon’ble High Court of Jharkhand has allowed the writ

against the assessee trust and the Central Bureau of Investigation has also

lodged an FIR against the Pujari and Trustee of the Trust for criminal

conspiracy cheating and criminal misconduct. Ld CIT DR further pointed

out that from the analysis of the entire facts and circumstances of the case,

it is crystal clear that the objects of the trust are not genuine as it has

violated the objects of the trust by changing original trust deed twice one P a g e 3 | 7

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in the year 1987 and secondly in the year 2005, which is clearly against

wishes of the founder trustee. Therefore, the ld CIT(E) was right in

cancelling the registration.

respectfully note that from the judgement of Hon’ble Supreme Court dated

1.5.2019 (supra) it is ample clear that the Hon’ble Supreme Court has

struck down and dismissed the order of Hon’ble High Court of Jharkhand

and thus, the direction of Hon’ble High Court to CBI to take over the

investigation in the matter have been dismissed. Thus, we safely presume

that presently, no investigation by the CBI is going on against Pujari and

trustee, which relates to the rights of the trustees to sell property of a

religious trust or Deity, giving rise to civil dispute.

whether the CIT(E) was right in cancelling the registration granted to the

assessee by order dated 7.5.2012.

cognizance of the letter of Income Tax Officer (E) Ranchi dated 16.10.2017,

wherein, the Assessing Officer has made recommendation to the CIT(E)

that the trust deed created in 2005 with intent of changing the original trust

deed of 1948 and 1987 by trustee who acted against the wishes of founder

of the trust and land belonging to deity were sold for development and that

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the trust created was not lawful going against the wishes of founder. The

ITO (Exemptions) also intimated that the trusts were not competent to

change the original trust deed and hence, the new trust deed created in

2005 was not genuine. Indicating the above glaring facts, the ITO

recommended that the registration u/s.12AA of the Act may kindly be

cancelled.

observations of the ITO (Exemptions), which were noted by the CIT(E)

while cancelling the registration. Further, ld D.R. drew our attention towards

reply of the appellant vide dated 26.3.2018 to the show cause notice issued

by the CIT(E) dated 18.12.2017. Ld A.R. submitted that since the land

graffers who were capturing the land day by day. Therefore, to save the

interest of trust, the land was sold for the purpose of development and,

therefore, the act of sale of land for development cannot be a basis for

cancellation of registration u/s.12AA(3) of the Act.

CIT DR that there is no complaint by the Pujari and founder of the trust

regarding garbing of land. Therefore, the cause shown by the appellant for

justifying the act of sale of land for development is not acceptable even by

a man of ordinary prudent.

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before the Tribunal nor in the reply dated 26.3.2018 to the show cause

issued by the CIT(E), it has been mentioned or explained by the appellant

that the sale proceeds from sale of land for development have been used or

will be used for the development of charitable objects of the trust.

Therefore, this factum was sufficient for CIT(E) for satisfying himself that

the activities of the trust are not genuine or are not being carried out in

accordance with the objects of the Trust. In this situation, the CIT (E) has

very well empowered to pass order under section 12AA(3) of the Act

cancelling the registration.

that the CIT(E) was right in cancelling the registration granted to the

assessee on 7.5.2012 as the Pujari of the trust changed the original trust

deed granted in 1948 and subsequent trust deed in 1987 against the

wishes of the founder. The reasons stated by the appellant for sale of land

of the trust for development is also not genuine, bonafide and thus, it is

crystal clear that the activities of the trust were not genuine as it has

violated the objects of the trust as well as the transferring the property of

the trust without any good cause against the interest of trust. Accordingly,

grounds of the assessee being devoid of merits, is dismissed.

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Order pronounced in the open court under Rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1963 on 30/ 10/2019.

Sd/- sd/- (Laxmi Prasad Sahu) (Chandra Mohan Garg) ACCOUNTANT MEMBER JUDICIALMEMBER

Ranchi; Dated 30 /10/2019 B.K.Parida, SPS Copy of the Order forwarded to : 1. The Appellant : Sri Ramjanki Tapovan Mandir, Nivarnapur, Chutia, Doranda, Ranchi-834 002

Sr. Pvt. Secretary, ITAT, Cuttack

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