PR. COMMISSIONER OF INCOME TAX, JAIPUR vs. SWAMI SHREE 108 SHREE MURLIRMA MAHARAJ

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ITA/42/2017HC RajasthanRJHC01039687201703 April 2018Author: GOPAL KRISHAN VYAS,RAMCHANDRA SINGH JHALA2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the learned ITAT had committed no error in issuing directions for the registration of the assessee-Trust under Section 12AA of the Income Tax Act. The reasoning was that the ITAT, after perusing the objects and activities of the Trust, found them to be charitable and for the benefit of all mankind. The fact that the Trust was newly formed and had incurred initial expenditure of ₹3.5 lakhs for maintenance and charitable activities did not, in the ITAT's view, justify the denial of registration by the CIT(E). The High Court found no substantial question of law arising from the ITAT's order. Therefore, the appeal filed by the revenue was dismissed.

What were the facts?

The appeal challenges an order dated May 24, 2017, passed by the Income Tax Appellate Tribunal (ITAT), Jodhpur Bench. The ITAT had directed the grant of registration under Section 12AA of the Income Tax Act to the respondent assessee, Swami Shree 108 Shree Murliram Maharaj Sadhu Panchayat Trust. The Commissioner of Income Tax (Exemption), Jaipur, was the appellant. The ITAT found that the Trust, though newly formed, had objects for the benefit of helpless living beings and all mankind, not limited to a specific community. The initial expenditure incurred by the Trust for maintenance and charitable activities was approximately ₹3.5 lakhs. The ITAT held that the CIT(E) was not justified in denying registration.

What were the issues?

1. Whether the learned ITAT erred in directing the grant of registration under Section 12AA of the Income Tax Act to the assessee-Trust, considering its newly formed status and the nature of its objects and activities? (Question of law and fact, concerning Section 12AA of the Income Tax Act). Assessee's Contention: The ITAT's decision to grant registration was correct. The Trust's objects were charitable and for the benefit of mankind, and the initial expenditure was for maintenance and charitable activities. The CIT(E) was not justified in denying registration. Revenue's Contention: The judgment does not record any specific contentions made by the revenue before the High Court, other than the fact that the appeal was filed by the Commissioner of Income Tax (Exemption).

Which sections of the Income-tax Act were involved?

Section 12AA

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR D.B. Income Tax Appeal No. 42 / 2017 Commissioner of Income Tax-Exemption, Jaipur. ----Appellant Versus Swami Shree 108 Shree Murliram Maharaj Sadhu Panchayat Trust, Raipur, Marwar, District - Pali (Rajasthan) ----Respondent _____________________________________________________ For Appellant(s) : Mr. K.K. Bissa. _____________________________________________________ HON'BLE MR. JUSTICE GOPAL KRISHAN VYAS HON'BLE MR. JUSTICE RAMCHANDRA SINGH JHALA

Judgment 03/04/2018

In this appeal filed by appellant- C.I.T. (Exemption), Jaipur the order dated 24.05.2017 passed by learned Income Tax Appellate Tribunal, Jodhpur Bench, Jodhpur in I.T.A. No.01/Jodh/2017 is under challenge, whereby the learned ITAT while perusing the objects and activities of the assessee- Institution held that the respondent Trust is newly formed Trust and the objects are not only for limited purpose of one “Samaj” but for helpless living beings and whole mankind. Since the Trust is newly formed Trust, therefore, expenditure initially incurred are only 3.5 lacs rupees for whole of the year in different heads for maintenance of the Trust, and charitable activates and for (2 of 2) [ITA-42/2017]

maintenance of the building etc. Therefore, the learned ITAT held that if the activities have not been carried out by the newly formed Trust within main object, which are only for charitable purpose, the learned C.I.T. (E) is not justified in not granting registration u/s 12AA of the Income Tax Act and pass the order to grant registration as applied for.

In our opinion, no error has been committed by the learned ITAT so as to issuing direction for registration of the Assessee- Trust u/s 12AA of the Income Tax Act.

In view of above, no substantial question of law emerges for consideration, hence, the instant appeal is hereby dismissed.

(RAMCHANDRA SINGH JHALA) J. (GOPAL KRISHAN VYAS) J.

DJ/- 41

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