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Income Tax Appellate Tribunal, RANCHI BENCH, RANCHI
Before: S/SHRI CHANDRA MOHAN GARG & LAXMI PRASAD SAHU
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.
Ld Authorised Representative (AR) of the assessee reiterated the
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.
Ld A.R. drew our attention towards para 19, 20 & 22 of the
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.
Replying to above, ld CIT (DR), first of all, submitted that even in a
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.
Ld CIT DR drew our attention towards relevant operating para of the
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.
On careful consideration of the rival submissions, first of all, we
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.
Now, we proceed to decide the main ground of the assessee as to
whether the CIT(E) was right in cancelling the registration granted to the
assessee by order dated 7.5.2012.
From the impugned order, we observe that the CIT(E) took
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.
On being asked by the Bench, ld A.R. could not controvert the above
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.
It is also observed that we are in agreement with the contention of ld
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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We may also point out that neither in the written submissions nor
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.
In view of foregoing discussion, we reached to a logical conclusion
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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In the result, appeal of the assessee is dismissed.
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
The Respondent. CIT (Exemptions), Patna 3. The CIT(A)- 4. Pr.CIT- 5. DR, ITAT, Ranchi 6. Guard file. //True Copy// By order
Sr. Pvt. Secretary, ITAT, Cuttack
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