M/S MAHARSHI WORLD PEACE TURST,BHOPAL vs. COMMISSIONER OF INCOME-TAX -EXEMPTION, BHOPAL

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ITA 553/IND/2017Status: DisposedITAT Indore08 October 2018AY 2017-185 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that registration under the MP Public Trust Act is not a mandatory requirement for obtaining registration under Section 12AA of the Income Tax Act. The CIT erred in placing sole reliance on this aspect.

What were the facts?

The assessee, Maharashi World Peace Trust, applied for registration under Section 12AA of the Income Tax Act. The CIT (Exemptions) rejected the application solely because the trust was not registered under the MP Public Trust Act, 1951.

What were the issues?

Whether registration under the MP Public Trust Act is a prerequisite for obtaining registration under Section 12AA of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 12AA

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, INDORE BENCH, INDORE

For Appellant: Shri N.D. Patwa,C.A Date of Hearing
For Respondent: Shri Lal Chand, CIT, Shri N.D. Patwa,C.A Date of Hearing
Hearing: 11.10.2018Pronounced: 12.10.2018

PER MANISH BORAD, AM.

This appeal of Assessee is directed against the order of Ld.

Commissioner of Income Tax-Exemptions, Bhopal (in short ‘CIT(A)’),

dated 24.05.2017 which is arising out of the order u/s

12AA(1)(b)(ii) of the Income Tax Act 1961(hereinafter called as the

‘Act’).

2.

The assessee has raised following grounds; 1 “01. That on the facts and in the circumstances of the case, the order dated 24.5.2017 passed by the Hon'ble CIT (Exemption), Bhopal, refusing to grant the Registration u/ s 12AA of the Income Tax Act, 1961 to the Appellant is bad in law, perverse and passed in an arbitrary manner.

2.

That on the facts and in the circumstances of the case, the Hon'ble CIT (Exemption), Bhopal has erred in law in not granting Registration u/ s 12AA of Income Tax Act, 1961 to the Appellant. Therefore, it is prayed that proper directions may kindly be issued to the Hon'ble CIT- (Exemption) to grant registration uls 12AA as applied by the Appellant.

3.

That on the facts and in the circumstances of the case, the Hon'ble CIT (Exemption) while not granting registration u/s 12AA of Income Tax Act, 1961 to the Appellant has grossly erred in placing sole reliance on the aspect that the Appellant is not registered under the provisions of the MP Public Trust Act, 1951, at the same time not considering that the provisions of Income Tax Act, 1961 do not mandate for having a registration under the MP Public Trust Act, 1951 for the purpose of having registration u] s 12AA under the Income Tax Act, 1961.

3.

At the outset Ld. Counsel for the assessee submitted that Ld.

CIT-Exemptions, Bhopal denied the registration u/s 12AA of the Act

merely for the reason that the assessee was not registered as a

Public Trust as per M.P Public Trust Act 1951. He contended that

there is no requirement as per the provisions of Income Tax Act for the purpose of registration as a Public Trust in order to get the

registration u/s 12AA of the Income Tax Act.

4.

Per contra Ld. Departmental Representative supported the

order of Ld.CIT-Exemptions.

5.

We have heard rival contentions and perused the records

placed before us. The assessee Trust applied for registration u/s

12AA of the I.T Act in Form No.10A on 17.11.2016. Perusal of the

order of Ld.CIT-Exemptions, Bhopal rejecting the assessee’s

application for registration u/s 12AA of the Act shows that it was

merely on account that the assessee trust did not get itself

registered as a Public Charitable with Registrar of Public Trust,

Madhya Pradesh. Nowhere in the order of CIT-Exemption has any

mention about the objection raised against the objects of the trust

and the genuineness of activities carried out.

6.

As per the provisions of Section 12AA(1) of the Act provides

that “Principal Commissioner or Commissioner, on receipt of

application for registration of the Trust or Institution made under

Clause a or Clause aa of Sub-Section 1 of Section 12A can call for such documents or information as he thinks necessary in order to

satisfy himself about the objects and genuineness of activities of the

Trust or Institution and also make such enquiries as he may deem

necessary in this behalf and after satisfying himself about the

objects of the Trust or Institution and the genuineness of its

activities he may pass an order in writing registering the Trust or

Institution or if he is not so satisfied, he may pass an order in

writing refusing to register the Trust or Institution. Provision of

Section 12AA(1) of the Act refers to the “Trust or Institution”.

There seems to be no requirement for a trust to be mandatorily

registered as a Public Charitable trust in the State of India where it

is located. The action of Ld.CIT-Exemptions denying the

registration merely for the reason that the assessee Trust was not

registered as a public Charitable Trust cannot be held to be

justified.

7.

We therefore are of considered view that the issue of

registration u/s 12AA of the Act needs to be set aside to the file of Ld.CIT-Exemptions for denovo adjudication as per the provisions of

I.T. Act so as to satisfy himself about the genuineness of the activities as well as objects of the Trust to be a charitable in nature.

Needless to say that proper opportunity of being heard should be

provided to the assessee.

7.

In the result the appeal of the assessee is allowed for

statistical purpose.

The order pronounced in the open Court on 12.10.2018.

Sd/ Sd/-

( KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER �दनांक /Dated : 12 October, 2018 /Dev

Copy to: The Appellant/Respondent/CIT concerned/CIT(A) concerned/ DR, ITAT, Indore/Guard file. By order Asstt.Registrar,I.T.A.T., Indore

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