COMMISSIONER OF INCOME TAX vs. M/S D.N.MEMORIAL TRUST

Order dated 16.08.2011 was passed by the Commissioner of Income Tax, J&K, Jammu under Section 12AA(1)(b) of the Income Tax Act, 1961 in which the registration applied by the assessee Trust was refused by holding that the assessee institution did not satisfy the registering authority, the then Commissioner of Income Tax, J&K, Jammu with the genuineness of its activities and it was held that the assessee Trust had generated surplus (profit) out of their total receipts, thus, the provisions contained under Section 12(AA)(1) (b)(ii) of the Income Tax Act, 1961 were applied in the case. 2. Aggrieved of the order passed by the Commissioner of Income Tax, J&K, Jammu, the assessee filed an appeal before the learned Income Tax Appellate Tribunal, Amritsar in M.A No. 33(Asr)/2013(Arising out ITA No. 617(Asr)/2011) who has allowed the appeal of the assessee with the directions to the department to grant registration to the assessee applied by the assessee. 3. Aggrieved of the order dated 31.03.2014 passed by Income Tax Appellate Tribunal, Amritsar, the Commissioner of Income Tax, J&K, Jammu Sr. No.3

The Income Tax Appellate Tribunal, Amritsar has passed the following order while allowing the appeal:-:- “We have heard the rival contentions and perused the facts of the case. There is nothing on record brought out by the Ld. CIT that fees structure is in-genuine or against the accepted norms. Nothing has been brought on record by the Ld. CIT that the activities of the Trust are for non-charitable purpose or for personal purposes of the trustees etc. Rather whatever funds were acquired by the Trust have been utilized for the purpose of educational activities of the institution and in the absence of any adverse material brought on record by the ld. CIT, the application by the assessee can not be rejected. The decision of the Hon’ble Allahabad High Court in the case of City Montessori School (Regd.) Vs. Union of India and Others (supra) and decision of Hon’ble Punjab & Haryana High Court, in the case of CIT vs. Manav Mangal Society (supra), support our view. As regards arguments made by Ld. DCIT(DR) Mr. Tarsem Lal, nothing has been brought on record by him or by Ld. CIT about the falsity of the trust. Nothing further has been brought on record that fees structure was so huge to treat the motive of trust as profits-making or non-charitable. Therefore, the arguments of the Ld. DR. Mr. Tarsem Lal are general arguments and without any basis and cannot support the revenue. In the facts and circumstances of the case, the Ld CIT is directed to grant registration to the assessee as applied by the assessee. Thus, all the grounds of the assessee are allowed.”

Mr. K.D.S Kotwal, learned Dy. A.G fairly stated that the law has been laid down by the Supreme Court in Civil Appeal No. 5167 of 2008 along with connected matters titled M/s Queen’s Educational Society Vs. Commissioner of Income Tax whereby they approved the judgment passed by the Punjab & Haryana High Court in the case of CIT Vs. Manav Mangal Society Vs. Commissioner of Income Tax (2010) 328 ITR 421. It is appropriate to reproduce the relevant para of the judgment of the Supreme Court passed in M/s

In view of the judgment passed by the Supreme Court referred hereinabove, the issue in hand is squarely covered. In such circumstances, no substantial question of law arises for consideration as the Income Tax Appellate Tribunal, Amritsar while allowing the appeal has considered all the aspects. 7. There is no merit in the appeal and the same is, accordingly, dismissed.