SARVA SIDDHI RAJA GANPATHY TRUST,MUMBAI vs. DDIT(E)1(2), MUMBAI

At the time of hearing, a preliminary point has been raised, which is to the effect that the Director has denied the registration for reasons which are not justified inasmuch as the same are mere procedural aspects and the same could have been cured if an appropriate opportunity was allowed to the assessee.

In brief, the relevant facts are that the appellant is a Trust which is constituted by a Trust Deed dated 14.01.2005 and is registered with the Charity Commissioner, Mumbai on 31.10.2005. It applied for registration u/s 12A of the Act with the Director on 30.04.2012. A perusal of the order of the Director reveals that the registration has been refused on multiple grounds, which are summarised as under. Firstly, the Director has noted that assessee did not produce the original PAN cards of five out of eight Trustees; secondly, that the assessee did not furnish copies of the bank accounts with summary of transactions for the period 01.04.2010 till 30.09.2012, though assessee had submitted copies of the ledger account showing the transaction through bank; thirdly, as per the Director, there was ambiguity about the ownership of the temple premises as well as the deities or the idol, which has not been satisfactorily explained; fourthly, that there was no explanation as to when the temple premises were built and the time and source of the acquisition by the assessee; and finally, that clause (6) of the Trust Deed dealing with investments was not in compliance with the requirements of Sec. 11 of the Act inasmuch as it permitted investments in the name of the Trust or Trustees and also permitted the Trustees to invest the trust funds “as they may deem fit”. Because of the failure of the assessee to furnish the requisite details and clause (6) of the Trust Deed not being in conformity with the provisions of the Act, the Director refused to grant registration to the assessee.

Before us, the learned representative vehemently pointed out that all the infirmities pointed by the Director were curable inasmuch as assessee was in a position to produce the PAN cards of all the remaining Trustees as also the copies of the bank account with appropriate summary. With regard to the ownership of the premises and the deities or idols, it was pointed out that assessee-trust was formed to perform the daily pooja and other function and also to prepare prasadam for the deities and distribute to the public. The temple premises alongwith deities was constructed by another trust, namely, Bhajan Samaj, which enjoys registration u/s 12A of the Act (and also recognition u/s 80G of the Act) and that assessee was not connected with the structure or the idols of the temple. It has been pointed out that before the Director, assessee explained that assessee was owning certain holy equipment such as Shree Rama Silver Mandap, Shree Ganapathy Silver Mandap, Silver kavachas, Hundi boxes, etc, which are required and associated with performing of pooja. With regard to time of acquisition of the temple, the learned representative pointed out that the said objection is not relevant when it can be appreciated that the temple premises alongwith the deities were constructed by the other trust, namely Bhajan Samaj; and, insofar as clause (6) of the Trust Deed is concerned, the learned representative pointed out that assessee has already approached the Charity Commissioner, Mumbai for carrying out appropriate alteration in the Trust Deed and has also received the requisite ‘no objection’. In this context, it is pointed out that assessee’s application was pending before the Hon'ble High Court to change the relevant clause of the Trust Deed and that, in any case, presently no investments are held in the name of the Trustees, an aspect which is verifiable. By pointing out to the aforesaid features, the learned representative submitted that assessee would be satisfied if the matter is restored back to the file of the Director who may re-appraise the application of the assessee seeking registration u/s 12A of the Act.

On the other hand, the ld. DR appearing for the Revenue has merely placed reliance on the order of the Director, which we have already noted in sufficient detail and is not being repeated for the sake of brevity. However, there is no opposition to the plea of the appellant to remand the matter back to the file of the Director.

Sec. 12AA of the Act prescribes the procedure for registration of a Trust or institution. The relevant provisions empower the Director to grant registration after satisfying himself about the objects of the Trust/institution and the genuineness of its activities. In order to reach to such a conclusion, the Director is further empowered to call for such documents or information, which he thinks necessary in order to satisfy himself about the genuineness of the activities of the Trust/institution and may also make such inquiries as he may deem necessary in this behalf. In the instant case, the reasons which have been summed-up by the Director in the impugned order have been addressed by the assessee before us, and on a prima facie basis, the same cannot be construed as fatal so as to deny the registration u/s 12A of the Act to the assessee. Be that as it may, what we are trying to point out is that the reasons narrated by the Director are such which could have been better dealt with after specific queries were addressed to the assessee. Even with regard to clause (6) of the Trust Deed, in terms of which the Director concluded that the power to invest the Trust funds is inconsistent with the requirements of the Act, a pertinent plea has been set-up by the assessee that it has taken steps to amend its Trust Deed; and, secondly that in actuality the Trust funds are not invested in the names of the Trustees at all, and thus there is no violation of the Act.

In our considered opinion, considering the entirety of facts and circumstances of the case, we are in agreement with the plea of the assessee for remanding the matter back to the file of the Director for afresh examination of assessee’s claim of registration u/s 12A of the Act. Needless to mention, the Director shall allow the assessee a reasonable opportunity of being heard and only thereafter pass an order on the application of the assessee seeking registration in accordance with law.

Before parting, we may make it clear that our decision to remand the matter back to the file of the Director is no reflection on the merits of the case, which shall be decided by the Director in the light of the requirements of Sec. 12AA(1) of the Act, and of course by keeping in mind the material and evidence before him.

In the result, appeal of the assessee is allowed for statistical purposes.