COMMISSIONER OF INCOME TAX vs. SAVIOR CHARITABLE TRUST RAILWAY ROAD MOHINDERGARH

-1- IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH Date of decision: 22.01.2013 The Commissioner of Income Tax, Rohtak ...Petitioner versus Savior Charitable Trust ..Respondent CORAM: HON'BLE MR. JUSTICE HEMANT GUPTA HON'BLE MS. JUSTICE RITU BAHRI Present:- Mr. Inderpreet Singh, Advocate for the appellant. Mr. Akshay Bhan, Advocate and Mr. Alok Mittal, Advocate for the respondent. HEMANT GUPTA, J. (Oral) The Revenue is in appeal under Section 260A of the Income Tax Act, 1961 (for short 'the Act') arising out of an order passed the Income Tax Appellate Tribunal, Delhi Bench 'I' New Delhi (for short 'the Tribunal) on 20.08.2010 in ITA No.1168/Del/2007, in respect of registration of assessee as a charitable trust under Section 12A of the Act. The Revenue has raised four substantial questions of law, but in our opinion, the following substantial question of law arises for consideration:- “Whether the Hon'ble Income Tax Appellate Tribunal was right in law to grant registration under Section 12A of the Act when the assessee has failed to prove the genuineness of its activities?” The said question arises out of the fact that the assessee filed an application for registration of the trust under Section 12A of the Act on 20.06.2006 -2- for its registration as a Charitable Trust. The Learned Commissioner of Income Tax declined registration inter-alia for the reason that a sum of Rs.17,12,143/- cannot be said to be donation towards corpus because the counterfoils of the receipts issued to the donors do not contain any specific directions nor has the assessee adduced any proof that the respective donors made the donations with specific directions towards corpus. The counterfoil do not bear any even complete addresses of the donors and in most of the cases only bare names are there on the receipts and without permanent account number. Thus, it was concluded that the trust has failed to comply with the provisions of the Act. The learned Tribunal in an appeal set aside the order dated 29.12.2006 of the Commissioner of Income Tax (Annexure A-1) and returned a finding that such can not be ground to decline registration but it should be left with the Assessing Officer to examine the same at the time of the making assessment as to whether the donation was given towards the object of the trust or not. It was found that the exemption would not available to an assessee if the Assessing Officer is satisfied about the genuineness of the activities promised or claimed to be carried out in each financial year relevant to the assessment year.

We have heard learned counsel for the parties and also gone through the list of donors produced by Mr. Bhan during the course of arguments. Learned counsel for the respondent relies upon the judgment of Delhi High Court reported as Director of Income-Tax (Exemption) vs. Keshav Social and Charitable Foundation, 278 ITR 152 (Delhi) to argue that the failure to furnish the complete list of donors does not necessarily mean donations are unaccounted money, therefore, the said factor cannot be taken into consideration to decline registration. The list of 87 donors shows that the only names are mentioned without any address. The lack of information in respect of parentage, age, address or PAN Numbers in the list of donors are the good reasons for declining the registration of -3- the assessee as a charitable trust. The list of such donors is sufficient to infer that about the genuineness of the activities of the trust as contemplated and required to be considered by the Assessing Officer in terms of Section 12AA(1)(aa) of the Act. We find that reliance on the judgment referred too by learned counsel for the respondent is not tenable. In the aforesaid case, the question examined was during the course of assessment and not during the course of grant of registration. At the time of registration, the Commissioner of Income Tax is to consider the genuineness of activities of the Trust or the Institution and was also required to make such enquiry as he may deem necessary. On the basis of enquiry conducted and the information submitted by the respondent, the introduction of donors, shows in-genuineness of activities of the trust. Therefore, it is a sufficient reason to decline registration in terms of Section 12AA(1) (a) of the Act. Consequently, while allowing the appeal, the question of law is answered in favour of the Revenue and against the Trust. Allowed in the above terms. (HEMANT GUPTA) JUDGE (RITU BAHRI) January 22, 2013 JUDGE G.Arora/Vimal