JESUS CHRIST OF NAZARETH MINISTRIES HYDERABAD TRUST,HYDERABAD vs. COMMISSIONER OF INCOME TAX, (EXEMPTIONS), HYDERABAD

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ITA 422/HYD/2018Status: DisposedITAT Hyderabad09 August 20194 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal followed a coordinate bench's decision, stating that the genuineness of activities and allowability of exemption are assessed during assessment, not registration. The CIT(Exemptions) should reconsider the application focusing on the trust's objectives.

What were the facts?

The assessee, a trust formed in 2016, applied for registration under Section 12AA of the Income Tax Act. The CIT(Exemptions) rejected the application, citing the trust as a family trust and doubting the genuineness of its activities due to a lack of documentation and no activities carried out.

What were the issues?

Whether the CIT(Exemptions) erred in rejecting the registration solely based on the trust being a family trust and lack of documented activities, without examining the trust's objectives.

Which sections of the Income-tax Act were involved?

Section 12AA,Section 11

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD BENCH “A”, HYDERABAD

Before: SMT. P. MADHAVI DEVI & SHRI S. RIFAUR RAHMAN

For Appellant: Smt. S. Sandhya
For Respondent: Shri Y.V.S.T. Sai
Hearing: 05/08/2019Pronounced: 09/08/2019

PER S. RIFAUR RAHMAN, A.M.:

This appeal filed by the assessee is directed against the order of CIT(Exemptions), Hyderabad, dated 29/12/2017.

2.

Brief facts of the case are, the assessee is a trust formed on 10/05/2016 by trust deed dated 10/05/2016, filed application in form No. 10A on 08/06/2017 seeking registration u/s 12AA of the Income- tax Act, 1961 (in short ‘the Act’). The CIT(E) issued a notice on 06/07/2017, which was duly served on the assessee, to produce copy of the original trust deed along with details mentioned in the said notice. Though, the AR and founder of the trustee appeared before the CIT(E), they failed to produce the details called for. The CIT(E) observed that even though the trust was formed one year back, the assessee failed to produce any document to establish genuineness of the activities rather assessee trust has not carried out any activity and thus, the assessee failed to file the details as per Rule 17A of the

2 ITA No. 422/Hyd/18 Jesus Christ of Nazareth Minstries Hyderabad Trust, Hyd. Act. He further observed that the trust is nothing but a family trust, having two trustees, both are husband and wife. In view of the above observations, the CIT(E) held that the trust is a family trust and hence, the genuineness of the trust itself is in doubt, therefore, he rejected the registration u/s 12A of the Act.

3.

Aggrieved, the assessee is in appeal before us raising the following grounds of appeal: “1. The order of the learned Commissioner of Income-tax is erroneous both on facts and in law. 2. The learned Commissioner of Income-tax erred in holding that the appellant is a family trust simply because there are two trustees. The learned Commissioner of Income-tax ought to have seen from the objects that it is a public trust and not a private trust. 3. The learned Commissioner of Income-tax erred in holding that the genuineness of the Activities cannot be verified. 4. The learned Commissioner of Income-tax erred in rejecting the application for registration of the Trust under sec. 12AA of the Act, without considering the fact that the appellant fulfilled all the conditions. 5. Any other ground that may be urged at the time of hearing.”

4.

Before us, the ld. AR of the assessee submitted that similar issue came up for consideration before the coordinate bench of this Tribunal in the case of Jesus Christ of Nazareth Ministries International Church in ITA No. 423/Hyd/2018, vide order dated 05/04/2019, a copy of which is available on record.

5.

The ld. DR, on the other hand, filed written submissions, in which, inter-alia, stated that there is no evidence that the trust is a public religious trust and the trust is for the benefit of a sect professing faith under the banner of ‘Jesus Christ of Nazareth Ministries and therefore, the trust is nothing but a private religious trust which is not entitled for registration u/s 12AA. He relied on

3 ITA No. 422/Hyd/18 Jesus Christ of Nazareth Minstries Hyderabad Trust, Hyd. various cases in support of the submissions mentioned in the written submissions.

6.

Considered the rival submissions and perused the material on record. In the case of Jesus Christ of Nazareth Ministries International Church (supra), the coordinate bench has held as under:

“5. Having regard to the rival contentions and material on record, we find that the assessee has filed an application under Form IDA, immediately on its formation and therefore, it could not have carried on any activities to file documents in support of such activities. U/s 12AA of the Act, when an assessee has made an application for registration, the CIT(Exemptions) is required to examine whether the objectives of assessee are charitable in nature or not. As held by various Hon'b1e. Courts, the genuineness of activities and the allow ability of exemption u/s. 11 would only be at the time of assessments and not at the time of registration. The CIT(Exemptions) has not commented upon the objectives of the assessee-trust at all. Therefore, we are of the opinion that application of the assessee needs reconsideration by the CIT(E) and accordingly the issue is set aside to the file of CIT(E) with a direction to look in to the objectives of assessee-company for grant of registration u/s. 12AA of the Act. Needless to mention that assessee shall be given a fair opportunity of hearing.”

As the issue under consideration is materially identical to that of the above case, following the decision therein, we remit the issue back to the file of the CIT(E) to decide the issue in line with the above directions of the coordinate bench. Needless to mention that assessee shall be given a proper opportunity of hearing. Accordingly, the grounds raised by the assessee are treated as allowed for statistical purposes.

4 ITA No. 422/Hyd/18 Jesus Christ of Nazareth Minstries Hyderabad Trust, Hyd. 7. In the result, appeal of the assessee is allowed for statistical purposes. Pronounced in the open Court on 9th August, 2019.

Sd/- Sd/- (P. MADHAVI DEVI) (S. RIFAUR RAHMAN) JUDICIAL MEMBER ACCOUNTANT MEMBER

Hyderabad, Dated: 9th August, 2019 kv Copy to:- 1) Jesus Christ of Nazareth Ministries Hyderabad Trust, Flat No. 202, H.No. 6-3-562/10, Erramanzil Colony, Hyderabad. 2) CIT,(Exemptions), Aayakar Bhavan, Basheerbagh, Hyderabad. 3) The ITO (Exemptions), Ward – 2, Hyd. 4) The Departmental Representative, I.T.A.T., Hyderabad. 5) Guard File

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