AMAN SHIV MANDIR TRUST vs. COMMR. OF INCOME TAX, CHD.

ITA/346/2006HC Punjab & HaryanaPHHC01075056200626 March 2007Author: MR. JUSTICE RAJESH BINDAL,MR. JUSTICE M.M. KUMAR5 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the appeal had no merit and dismissed it, concurring with the reasoning of the authorities below. The Court noted that the assessee's counsel could not dispute that nothing was spent on charitable purposes during the last five years, and the collection of money from low-paid employees, claimed as voluntary, did not sound reasonable. The application was delayed by over four years. Significant fixed deposits were found in the name of the trustee, who later approached the Settlement Commission, implying an admission of guilt. Considering the totality of circumstances, the intention, and conduct of the assessee and the managing trustee, the claim was not found to be genuine. The Court found the findings of the lower authorities to be in no manner perverse. The appeal was dismissed, upholding the denial of registration under Section 12A and exemption under Section 80G.

What were the facts?

The assessee, Aman Shiv Mandir Trust (Regd.), applied for registration under Section 12A and exemption under Section 80G of the Income Tax Act, 1961. The Trust claimed to have conducted activities like organizing Bhandaras and helping needy patients, but its income and expenditure account showed no expenses for these activities. Instead, all receipts were kept in fixed deposits, earning interest. No expenditure was incurred on the trust's objects for three years. Funds were claimed to be voluntary deductions from wages of employees of M/s Aman Securities and Detective Services, run by the main trustee. The application for registration was delayed by over four years. The revenue noted discrepancies, including the trust filing Form 15H despite not being registered, and large fixed deposits in the trustee's name, who later approached the Settlement Commission. The Commissioner of Income-tax rejected the registration application, and the Income Tax Appellate Tribunal upheld this decision. The appeal is before the High Court of Punjab and Haryana.

What were the issues?

1. Whether, on the facts and in the circumstances of the case and in view of legal provisions, the ITAT was justified in concurring with the CIT in denying registration u/s 12A and exemption u/s 80G to the appellant trust by erroneously holding that the appellant trust has not been performing charitable activities as per its aims and objects, which action is illegal and needs to be quashed, being in clear contradiction to the findings in SONEPAT HINDU EDUCATIONAL AND CHARITABLE SOCIETY VS. CIT (2007) 278 ITR 262 (P&H)? (Assessee's contention: The ITAT erred in denying registration and exemption, citing a contradictory precedent. Revenue's contention: Not recorded). 2. Whether, on the facts and in the circumstances of the case and in view of legal provisions, the CIT erred in denying registration and exemption u/s 80G by erroneously holding that the trust has not been performing charitable activities as per its aims and objects, and other bases being not relevant or in consonance with facts and evidence, which action is illegal and needs to be quashed as it falls outside the purview of the CIT's action and within the jurisdiction of the AO conducting scrutiny assessment under section 143(3)? (Assessee's contention: The CIT's action was illegal and based on factors outside its purview. Revenue's contention: Not recorded). 3. Whether, on the facts and in the circumstances of the case, the findings of the CIT in denying registration u/s 12A and exemption u/s 80G and the ITAT's concurrence thereto is perverse and thus needs to be quashed? (Assessee's contention: The findings are perverse. Revenue's contention: Not recorded).

Which sections of the Income-tax Act were involved?

Section 260-A,Section 12A,Section 80G,Section 143(3)

AI-generated summary — verify with the full judgment below

I.T.A.

-1- *** IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH I.T.A.

Date of decision: 26.3.2007 Aman Shiv Mandir Trust (Regd.) through Chairman Mr.Jagdish SinghTanwar ...Appellant Versus Commissioner of Income-tax, Chandigarh. ...Respondent *** CORAM: HON'BLE MR.JUSTICE M.M.KUMAR HON'BLE MR.JUSTICE RAJESH BINDAL Present: Mr.S.K.Mukhi, Advocate for the appellant. **** RAJESH BINDAL, J. This appeal has been preferred under Section 260-A of the Income Tax Act, 1961 (for short “the Act”) proposing the following substantial questions of law arising out of order dated 5.10.2005 passed by the Income Tax Appellate Tribunal, Chandigarh Bench-A, Chandigarh (for short “the Tribunal), in ITA No.748/Chandi/2000:- “1. Whether, on the facts and in the circumstances of the case and in view of legal provisions the ITAT was justified in concurring with CIT who has erred in denying registration u/s 12A and exemption u/s 80G to the appellant trust by erroneously holding that apparently the appellant trust has not been performing the charitable activities as per its aims and objects for which it was formed which action of

The order continues below.

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