C.I.T. I JODHPUR vs. SHRI PALIWAL BRAHMAN SAMAJ SEVA MANDAL

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ITA/193/2013HC RajasthanRJHC01025979201310 May 20162 pages
AI SummaryDismissed

What did the High Court hold?

The Tribunal held that the Commissioner of Income Tax (CIT) had erred in declining registration under Section 12AA of the Income Tax Act, 1961. The ITAT found that the CIT's presumption that the earlier objects of the trust continued after the substitution of the object clause in the bye-laws was contrary to the material on record. More importantly, the ITAT ruled that there is no provision in the Income Tax Act that mandates a trust to be registered as a public trust under the relevant State statute as a prerequisite for obtaining registration under Section 12AA. Therefore, the CIT's reason for declining registration on the ground of non-registration under Section 17 of the Rajasthan Public Trust Act, 1958, was not justified. Consequently, the ITAT set aside the CIT's order and restored the matter to the CIT for a fresh decision, taking into consideration all relevant aspects. The High Court found no substantial question of law arising for consideration.

What were the facts?

The appeal is filed by the Commissioner of Income Tax-I, Jodhpur against an order dated 16.1.13 passed by the Income Tax Appellate Tribunal (ITAT), Jodhpur Bench. The ITAT had allowed an appeal preferred by the assessee, Shri Paliwal Brahman Samaj Seva Mandal, Phalodi, against an order dated 27.4.12 passed by the Commissioner of Income Tax (CIT), Jodhpur. The CIT had dismissed the assessee's application for registration under Section 12AA of the Income Tax Act, 1961. The assessee's society was constituted for the betterment of the Paliwal Samaj. The CIT had declined registration, inter alia, on the ground that the society was not registered as a Trust under Section 17 of the Rajasthan Public Trust Act, 1958. The ITAT restored the matter to the CIT for fresh decision.

What were the issues?

1. Whether the ITAT erred in setting aside the order of the CIT and restoring the matter for fresh decision, considering that the Society is constituted for the betterment of Paliwal Samaj and its bye-laws were amended. Assessee's Contention: The ITAT has committed no error in setting aside the order passed by the CIT and restoring the matter back to his file for decision afresh. The ITAT found that the CIT proceeded with a presumption that the earlier objects continued after substitution, which was contrary to the material on record. Furthermore, the ITAT held that there is no provision mandating registration under the State's public trust act for obtaining registration under Section 12AA of the Income Tax Act, making the CIT's reason for declining registration unjustified. Revenue's Contention: The Society, not being duly registered as a Trust under Section 17 of the Rajasthan Public Trust Act, 1958, was not entitled to registration under Section 12AA of the Act. The ITAT has seriously erred in setting aside the order passed by the CIT and restoring the matter to his file for deciding afresh.

Which sections of the Income-tax Act were involved?

Section 12AA,Section 17

AI-generated summary — verify with the full judgment below

1 COMMISSIONER OF INCOME TAX-I, JODHPUR VS. SHRI PALIWAL BRAHMAN SAMAJ SEVA MANDAL PHALODI (D.B.INCOME TAX APPEAL NO.193/13) Dated:- 10.5. 16. HON'BLE MR.JUSTICE SANGEET LODHA HON'BLE MR.JUSTICE KAILASH CHANDRA SHARMA Mr.Sheetal Kumbhat, for the appellant.

1.

This appeal is directed against order dated 16.1.13 of Income Tax Appellate Tribunal (ITAT), Jodhpur Bench, Jodhpur, whereby an appeal preferred by the assessee against the order of Commissioner of Income Tax [CIT], Jodhpur, dated 27.4.12, dismissing the respondent's application under Section 12AA of the Income Tax Act, 1961 (for short “the Act”), has been allowed and the matter is restored to the file of CIT for deciding afresh, in terms of the observations made.

2.

Learned counsel appearing for the appellant submitted that the respondent Society is constituted with an object for betterment of Paliwal Samaj and the amendment of the bye-laws of the Society has not brought any change. Learned counsel submitted that the Society which is not duly registered as Trust under the provisions of Section 17 of Rajasthan Public Trust Act, 1958, was not entitled for registration under Section 12AA of the Act and thus, the ITAT has seriously erred in setting aside the order passed by the CIT and restoring the matter to his file for deciding afresh.

3.

A perusal of the order passed by the CIT reveals that he had proceeded with the presumption to the effect that earlier object with 2 regard to the activities of the Trust for betterment of Paliwal Brahmin Samaj continues even after substitution of the object clause in the bye-laws, which is found to be contrary to the material on record by the ITAT. That apart, in absence of any provision mandating that for the purpose of registration under Section 12AA of the Act, the Trust must be registered as public trust under the relevant statute of the State, the reason assigned by the CIT declining the registration on the ground that the respondent trust is not duly registered under Section 17 of Rajasthan Public Trust Act, 1958, was not justified. In this view of the matter, taking into consideration all the relevant aspects, the ITAT has committed no error in setting aside the order passed by the CIT and restoring the matter back to his file for decision afresh.

4.

No substantial question of law arises for consideration of this court in present appeal.

5.

Accordingly, the appeal is hereby dismissed in limine. (KAILASH CHANDRA SHARMA),J. (SANGEET LODHA),J. Aditya/

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