MAA KAMAKHYA NARMEDASHWAR EDUCATIONAL CHARITABLE TRUST vs. CIT(EXEMPTIONS), KOL., KOLKATA

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH ‘A’, KOLKATA [Before Shri P.M. Jagtap, AM & Shri S.S. Viswanethra Ravi, JM] I.T.A. Nos. 355 & 356/Kol/2017 Assessment Year: 2016-17 Maa Kamakhya Narmedashwar Educational Charitable Trust.........Appellant Mahalaya Road, Dibrugarh Assam - 786001 [PAN : AAETM3744K] CIT (Exemptions)Kolkata………………………………………………..................Respondent 10B, Middleton Row, 6th Floor Kolkata - 700071 Appearances by: Shri S.K. Tulsiyan, Advocate appearing on behalf of the Assessee. Shri Anand R. Baiwar, CIT appearing on behalf of the Revenue. Date of concluding the hearing : August 31, 2017 Date of pronouncing the order : September 22, 2017 ORDER Per P.M. Jagtap, AM These two appeals filed by the assessee are directed against two separate orders passed by the Ld. CIT (Exemptions), Kolkata both dated 30.01.2017 whereby he rejected the applications of the assessee for registration under section 12A of the Act and approval under section 80G of the Act. 2. The assessee in the present case is a charitable trust which came into existence on 01.10.2015. It filed an application in the prescribed form 10A on 08.07.2016 for grant of registration u/s 12AA of the Act. The Ld. CIT (Exemptions) while considering the claim of the assessee for registration u/s 12A of the Act, however, found that there were no charitable activities done by the assessee in as much as

2 I.T.A. No. 355 & 356/Kol/2017 Maa Kamakhya Narmedashwar Educational Charitable Trust no proof was filed by the assessee to show such charitable activities having been done by it. In this regard, he relied on the decision of Hon’ble Kerala High Court in the case of Self Employer Service Society vs CIT 247 ITR 18 wherein it was held that the society or institution which is yet to start any charitable activities as defined in section 2(15) of the Act cannot be granted registration under section 12A and rejected the application of the assessee for grant of registration u/s 12A. Consequently, he also rejected the applications of the assessee for approval u/s 80G of the Act holding that the assessee having denied the registration u/s 12A of the Act is not eligible for approval u/s 80G of the Act. Aggrieved by the orders of the Ld. CIT (Exemptions) rejecting the applications for registration u/s 12A of the Act as well as approval u/s 80G of the Act, the assessee has preferred these appeals before the Tribunal. 3. We have heard the arguments of both the sides and also perused the relevant material available on record. The learned counsel for the assessee has relied on the decision of Hon’ble Delhi High Court in the case Director of Income Tax vs Foundation of Opthalmic & Optometry Research Education Centre (ITA 1687 / 2010 dated 16.12.2010) in support of the assessee’s case. In the said case, the application of the assessee for registration u/s 12AA was rejected by the DIT (Exemption) on the ground that no charitable activity had in fact taken place since the society was a newly established one by relying on the decision of Hon’ble Kerala High Court in the case of Self Employer Service Society (supra). The Tribunal however set aside the order of the Ld. DIT (Exemption) and

3 I.T.A. No. 355 & 356/Kol/2017 Maa Kamakhya Narmedashwar Educational Charitable Trust directed him to grant the registration u/s 12A to the assessee by relying on the decision of Hon’ble Allahabad High Court in the case of 5th Generation Education Society (supra) wherein it was held that the non commencement of charitable activity could not be a ground for rejection of application for registration u/s 12A. When the matter travelled to the Hon’ble Delhi High Court on appeal by the department, the decision of Karnataka High Court in the case of DIT (Exemptions) vs Meenakshi Amma Endowment Trust 50 DTR (Kar) 243 was relied upon by the assessee in support of his case while the revenue relied on the decision of Hon’ble Kerala High Court in the case of Self Employer Service Society (supra) in support of its case. After considering the relevant provisions of section 12AA of the Act, Hon’ble Delhi High Court preferred to follow the view taken by Hon’ble Karnataka High Court in the case of Meenakshi Amma Endowment Trust (supra) and upheld the decision of Tribunal vide paragraph no 9 to 11 of its order which read as under: “9. The provision in this case i.e. Section 12A states that when a Trust is desirous of getting itself registered as charitable, it has to approach the Commissioner under Section 12AA. The powers of the Commissioner to register or refuse the application are expressly ITA 1687/2010 page 8 spelt out in Section 12AA itself. Rule 12AA (b) reads as follows: Section 12AA, PROCEDURE FOR REGISTRATION (1) The Commissioner on receipt of an application for registration of a trust or institution made under clause (a) of section 12A, shall – (a) Call for such documents or information from the trust or institution as he thinks necessary in order to satisfy himself about the genuineness of activities of the trust or institution and may also make such a inquiries as he may deem necessary in this behalf; and

4 I.T.A. No. 355 & 356/Kol/2017 Maa Kamakhya Narmedashwar Educational Charitable Trust (b) After satisfying himself about the objects of the trust or institution genuineness of its activities, he (i) shall pass an order in writing registering the trust or institution; (ii) Shall, if he is not so satisfied, pass an order in writing refusing to register the trust or institution, and a copy of such order shall be sent to the applicant; Provided that no order under sub-clause (ii) shall be passed unless the appellant has been given a reasonable opportunity of being heard. (1A) All applications pending before the Chief Commissioner on which no order has been passed under clause (b) of sub-section (1) before the 1st day of June, 1999, shall stand transferred on that day to the Commissioner and the Commissioner may proceed with such applications under that sub-section from the stage at which they were on that day. (2) Every order granting or refusing registration under clause (b) of sub-section (1) shall be passed before the expiry of six months from the end of the month in which the application was received under clause (a) of section 12A. “10. Facially, the above provision would suggest that there are no restrictions of the kind which the Revenue is reading into in this case. In other words, the statute does not prohibit or enjoin the Commissioner from registering Trust solely based on its objects, without any activity, in the case of a newly registered Trust. The statute does not prescribe a waiting period, for a trust to qualify itself for registration. 11. If the Revenue’s contentions are correct then, necessarily, a condition would have to be read in to the provision that the Commissioner should be satisfied that the Trust is in fact engaged in charitable activities which would in turn inject considerable deal of subjectivity. It is quite possible that if such flexibility is introduced, it would be susceptible to varied interpretation by the different authorities, in that some would be satisfied with activity of few months, while others may wish to examine the activities of the organization for longer time. In this view of the matter, this court is persuaded to follow the interpretation given to Section 12AA

5 I.T.A. No. 355 & 356/Kol/2017 Maa Kamakhya Narmedashwar Educational Charitable Trust by the Karnataka High Court in Direction of Income Tax (Exemptions) v Meenakshi Amma Endowment Trust (supra). 4. In our opinion, the issue involved in the present case thus is squarely covered in favour of the assessee by the decision of Hon’ble Delhi High Court in the case of Foundation of Opthalmic & Optometry Research Education Centre (supra) and respectfully following the same, we set aside the impugned order of the CIT (Exemptions) and direct him to grant the registration to the assessee u/s 12A of the Act. Consequently we also direct the Ld. CIT (Exemptions) to give approval to the assessee u/s 80G of the Act. 5. In the result, both the appeals of the assessee are allowed. Order Pronounced in the Open Court on 22nd September, 2017. Sd/- Sd/- (S.S. Viswanethra Ravi) (P.M. Jagtap) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 22/09/2017 Biswajit, Sr. PS Copy of order forwarded to: 1. Maa Kamakhya Narmedashwar Educational Charitable Trust, Mahalaya Road, Dibrugarh, Assam. 2. CIT (Exemption), Kolkata. 3. The CIT(A) 4. The CIT 5. DR True Copy, By order, Sr. P.S. / H.O.O. ITAT, Kolkata