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Income Tax Appellate Tribunal, “B” BENCH : KOLKATA
Before: Hon’ble Shri S.S. Godara, JM & Shri M.Balaganesh, AM ]
ORDER Per S.S. Godara, JM
This assessee’s appeal challenges correctness of the CIT(E)-Kolkata’s order dated 07.06.2018 passed in case no. CIT(E)/Kol/10E/554/2016-17/17-18/729 rejecting its registration involving proceedings u/s 254/12AA of Income Tax Act, 1961 (in short the Act).
Heard both the parties qua the sole issue of assessee’s section 12AA registration as a charitable trust. Case file perused.
2 Sriniwas Banwarilal Saraf Charitable Trust A.Yr. 2. It emerges from the case file that this is a second round of litigation qua the very issue of section 12AA registration between the parties. The assessee herein is a trust set up as per deed of indenture made on 31.12.2013. Its objects read as under: a) To establish and give grant and or aid to hospitals, clinics, dispensaries, nursing homes and or any other institutions, organizations, and or establishment for giving medical relief to the needy and or for research in medical sciences. b) To provide food, water, clothing and or shelter to the needy and to give alms to them either in cash or in kind or otherwise. c) To establish and give grant and or aid to schools, colleges, hostels, boarding houses, libraries, reading rooms and or other educational institutions for the furtherance of education and diffusion of knowledge. d) To establish and give grant and or aid to public rest houses and or dharamshallas and to arrange free Prasad and bhog for the benefit of the pilgrims or needy public. e) To grant aid and provide assistance to poor and other deserving persons in cash or in kind or otherwise and to pay stipends, scholarship and other aid for prosecuting studies, training, research or facilitating self-employment. f) To grant aid to poor, orphans, widows, handicapped and other deserving persons and provide assistance to them of all kind. g) To establish and give grant and or aid to orphanages, widow homes, old Age homes, lunatic asylums, poor houses etc. h) To start maintain or assist measures in those areas which are or become subject to natural calamities famine, epidemics, draught, flood, fire, earthquakes, landslide etc. and either calamities of similar nature. i) To renovate or repair any such temple, mosque, gurudwara, church or other place which is notified by any Government to be of historic archeological, heritage or artistic importance or to be a place of public worship of renown throughout any state of states. j) To grant aid and or assistance of kind to any fund, object institution, organization, establishment engaged in advancement of any public charitable purposes as aforesaid.
3 Sriniwas Banwarilal Saraf Charitable Trust A.Yr. 3. The assessee filed its Section 12AA registration on 30.09.2016 in form 10A of the Act. The CIT(E) declined the same in his order dated 11.01.2017 on account of improper registration form. The assessee filed I.T.A. No. 699/Kol/2017 before this Tribunal. A co-ordinate bench’s order dated 31.08.2017 restored the matter back to the CIT(E) for afresh adjudication.
The CIT(E) took up consequential proceedings thereafter culminating in his order under challenge rejecting assessee’s registration application. His sole reason for denying the impugned registration before us is that the assessee has avoided payment of tax by making ineligible exemption claim regarding its income as per income and expenditure account of Rs. 3,24,209/- along with corpus donation receipt to the tune of Rs. 47 lacs aggregating to Rs. 15,24,209/-. He therefore holds that the assessee is not entitled for the impugned registration as its activities are not genuine. Learned CITDR vehemently contends during the course of hearing that the CIT(E) has rightly denied the assessee its registration sought u/s 12AA of the Act in view of overwhelming evidence of it having avoided payment of tax. We find no reason to sustain this sole argument raised at the Revenue’s behest. Hon’ble Madras high court’s decision in DIT(E) vs. Seervi Samaj Tambaram Trust [2014] 271 CTR (Mad) 684 as well as hon’ble apex court decision in CIT vs. Sree Anjaneya Medical Trust [2016] 74 taxmann.com 243 (SC) hold that the CIT(E) is required to verify objects of the trust as to whether the same are covered within the specified prescribed charitable activities or general public utility u/s 2(15) of the Act. Coming to the Revenue’s stand regarding corpus donation (supra), there can hardly be any dispute that the same comes with a rider of its utilization for specific direction u/s 11(1)(d) of the Act. There is no other reason forthcoming in the CIT(E)’s order under challenge. We therefore hold the assessee to be covered under specific limbs of carrying out both education and medical relief activities followed by general public utility entitled for section 12AA registration. It is made clear that our instant adjudication is confined to assessee’s registration grievance only. We further make it 3
4 Sriniwas Banwarilal Saraf Charitable Trust A.Yr. clear that the assessing authority shall be at liberty to examine assessee’s application of income in appropriate proceedings as per law.
The assessee’s appeal is allowed in above terms.
Order pronounced in the Court on 12.10.2018