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Income Tax Appellate Tribunal, ‘A’BENCH,
Before: Shri M. Balaganesh & Shri S.S.Viswanethra Ravi
This appeal by the assessee is against the order dt: 04-11- 2015 passed by the Commissioner of Income Tax (Exemptions), Kolkata rejecting the grant of registration u/s. 12AA of the Act.
The only issue is to be decided in this appeal as to whether the CIT(E), Kolkata justified in rejecting the grant of registration u/s. 12AA of the Act in the facts and circumstances of the case.
The ld. AR of the assessee submits that the Trust was created on 12-07-1944 by its founder, late Narayndas Bajoria. The Trust is a public charitable and established an Asram in 1 Hardwar to provide food, lodging, clothes and other necessities and amenities to needy Hindu Sanyasis and other needy persons of the Hindu religion devoting their lives in Divine contemplation and to promote and propagate Hindi and Sanskrit learning etc. The assessee filed an application dt. 14- 07-2015 before the CIT(E), Kolkata seeking registration U/Sec 12A as charitable or religious institution in Form No.10A. The ld.AR of the assessee further submits that the CIT(E) rejected the said application by observing that the original copy of trust deed was not filed and the copy of the trust deed does not contain dissolution clause. He further submits that the assessee has only immovable asset i.e. a temple at Kankhal Hardwar. The local people worship and conduct bhajan in the said temple. No Trustee(s) and their relatives are entitled to derive any income from such temple.
4. The ld.AR of the assessee further submits in case of dissolution of Trust all the movable and immovable assets would be handed over to any other trust having similar objects and in case of no such trust found the said assets shall be vested to the respective Sate Govt. He relied on the order of the Co-ordinate Bench of Mumbai Bench in the case of Tara Educational and Charitable Trust in and while referring to para 4 of the said order argued that the scope of enquiry contemplated u/s. 12A of the Act is limited, wherein the CIT(E) has either to grant or refuse the registration having satisfied with the activities of the trust or the objects of the trust are not correct and genuine. He further submits that the CIT(E) gone beyond the scope of enquiry as envisaged u/s. 12AA, rejected the application for grant of 2 ITA No.19/Kol/16 registration u/s. 12AA of the Act and without making any adverse reference to its objectives as well as genuineness of its activities.
On the other hand, the ld. DR has relied on the order of the CIT(E) in rejecting the same.
Heard rival submissions and perused the material available on record. We find that the assessee has filed an application dt. 14-07-2015 before the CIT-E for obtaining grant of registration. The assessee Trust filed all the details as required by the CIT(E) vide letter vide a letter dated 9-10-2015, placed at page 21 of the assessee’s paper book. From the said letter dt. 09-10- 2015, it is observed that the assessee Trust has only immovable asset i.e. a Temple at Kankhal (Haridwar) and the trustees of the Trust are not deriving any profit from the said temple and the local people are managing the affairs of the said temple. It is also observed that all the assets of the Trust will be handed over to any trust having similar objects in case of dissolution or in the case of any Trust not found, the property shall be vested to respective Govt. Relevant details as already filed by the assessee vide letter dt. 9-10-2015 before the CIT-A for obtaining registration u/s. 12A of the Act are reproduced herein below for better understanding:-
1. 1. Copy of PAN card of Trust and Trustees are enclosed. Annex. I 2. Trust Deed with a copy thereof has been submitted along with the application.
3. Geographical area of operation of the Trust is in India.
4. PAN card of the Trustees are enclosed being Annex as above. Under taking from the Trustees with other detail is enclosed. Annex. 2 5. Detail of relationship of all trustees with the Settler. Annex. 3 6. The Trust is a Public Charitable Trust. The immovable a set is a Temple at Kankhal (Haridwar) for the general public. Local people worship in the temple and in the evening local people gathers at the temple and chant "Bhajan" for hours toghter. No Trustee and their relative are entitled for any profit in profits and any asset I property in the event of dissolution of the Trust. In case of dissolution of the trust, local people shall not spare the temple but they shall maintain the same for worship. However, the trust has 3 passed a resolution stating that, in the event of dissolution of the trust, all available funds, including all movable and immovable assets of the Trust to be handed over to any other Trust having similar objects and operating within the union of India. If no such trust is found, the property shall be vested to the Government. Annex 4. 7 A copy of letter from the trustee, Sri S.S.Khemka is enclosed confirming of providing a space in his office to the trust to carry on its activities. Annex. 5 8 Computerized Books of Accounts are maintained and are produced. 9 The Trust is not doing any business activities 10 Trust has only one employee called "PUJARl". He maintains the temple. Salary paid to Pujari is verifiable from the cash book produced. 11 A copy of Statement of Current Account No. 000605027783 with ICICI Bank, R.N. Mukherjee Road, Kolkata is enclosed. Annex. 6 12 Detail of donation along with Donor's confirmation letters are enclosed Annex.? 13 The Trust as per its object has many charitable activities but for lack of fund it could not be possible to under-take charitable activities in present period. Trust maintains a temple where people of the area perform puja. 14 The settler by a Sale Deed dated 24th April 1947 purchased a piece of land at Kankhal (Haridwar) and erected the Temple. The Trust maintains the said temple. Besides that the Trust has no other assets. Photo of the temple is enclosed Annex.8 15 As submitted in Para 13 above the temple maintained by the Trust is for the local people at large for worship and for meditation in the basement of the temple. 16 The Trust, at present, for lack of fund, cannot carry other charitable activity as desired by the founder in the Trust Deed. 17 The Trust did not receive any foreign contribution. 18 The Trust was allotted PA 11-101-AZ0718/CALlW-20(2). Xerox of the PAN card is enclosed. As per old records available, last return of income was filed for the Assessment year 1992-93 and assessment was completed lVs.143(3)/13(l) of the IT Act by an order dated 30-09-1994 and it was subsequently rectified u/s.154 by order dated 11-01-1996 and the tax demand was vacated. Copy of both the orders are enclosed and marked as Annex.
At present, the income of the trust is far below the maximum amount chargeable to income tax. As such, trust is not submitting return of Income The temple is maintained by meager offerings of the devotees / pilgrims.
The Trust has no Corpus Fund. The small donation amount received has been deposited in the bank account. A copy of bank statement is enclosed being Annex. 6 herein before.
Computerized Books of accounts are produced for the kind perusal of your honour. “
Coming to the order dt. 18-07-2014 of the ITAT, Mumbai Bench, Mumbai in the case of Tara Educational & Charitable Trust supra as relied on by the ld.AR of the assessee before us with regard to scope of the CIT(E) u/s. 12A of the Act, it is noticed that the Co-ordinate Bench, ITAT, Mumbai dealt the similar issue and opined that the power to exercise in granting registration for a religious or charitable institution the Commissioner has to satisfy himself about the objects of the trust and genuineness of its activities and without there being finding adverse to that effect the CIT(E) cannot refuse to grant registration u/s. 12A of the Act. Relevant finding at para 4 of that order supra to that effect is reproduced herein below for better understanding:-
We have heard the arguments of both the sides and also perused the relevant material available on record. It is observed that the application filed by the assessee u/s 12A of the Act has been rejected by the ld. DIT (Exemptions) mainly on the ground that the relevant Trust Deed does not contain the so-called "dissolution clause". As per the provisions of section 11 & 12 of the Act, income derived from property held for charitable or religious purposes and income of Trusts or Institutions from contributions are exempt from tax provided such Trusts or Institutions are registered u/s 12A of the Act. The procedure for registration u/s 12A is prescribed in section 12AAof the Act which provides that the Commissioner, on the receipt of an application for registration of a Trust or Institution made u/s 12A, shall call for such information from the Trust/Institution as he thinks necessary in order to satisfy himself about the genuineness of activities of the Trust/Institution and may also make such inquiries as deemed necessary on this behalf. It further provides that after satisfying himself about the objects of the Trust/Institution and the genuineness of its activities, the Commissioner shall pass an order in writing registering the Trust/Institution u/s 12A and if he is not so satisfied, he shall pass an order in writing refusing to register the Trust/Institution. The scope of enquiry contemplated u/s 12AA of the Act thus is limited to the extent of Commissioner getting himself satisfied about object of the Trust and the genuineness of its activities so as to grant or refuse the registration u/s 12A of the Act. A perusal of the impugned order of the ld. DIT (Exemptions), however, shows that he has not recorded any adverse comment or dis-satisfaction about the object of the 4 ITA 1247/M/13 Trust or genuineness of the Trust activities. He has refused to grant the registration u/s 12A of the Act on the ground that its Trust Deed does not contain "dissolution clause". In our opinion, the ld. DIT (Exemptions) thus has clearly gone beyond the scope of enquiry contemplated u/s 12A of the Act and has refused to grant the registration u/s 12A of the Act to the assessee Trust on a totally irrelevant ground without pointing out as to how he was not satisfied either about the object of the Trust or the genuineness of its activities. We therefore set aside the impugned order of the ld. DIT (Exemptions) and direct that the registration u/s 12A of the Act as applied by the assessee Trust be granted.
In the present case it is observed that the CIT(E) did not make any adverse reference to the objects of the trust and its genuineness of the activities. The CIT(E) refused to grant registration as original trust deed was not produced before him and dissolution clause was not found in the copy of said deed. In our opinion that the decision of the ITAT Mumbai in the case of supra as relied on by the ld.AR of the assessee is applicable to the present facts of the case in hand. Therefore, relying on the same in the case of supra, we set aside the impugned order of the CIT(E) in rejecting the grant of registration. Accordingly, we direct the CIT(E) to grant registration taking into consideration the submissions as made before him vide letter dt. 09-10-2015.
9 In the result, the appeal of the assessee is allowed. ORDER PRONOUNCED IN OPEN COURT ON 17/03/2017
Sd/- Sd/- M. Balaganesh S.S. Viswanethra Ravi Accountant Member Judicial Member Dated 17-03-2017 *PP/SPS: Copy of the order forwarded to: 1. The Appellant/Assessee: M/s. Seth Jagannath Bajoria Charitable Trust C/o Sri S.S Khemka, 4th Floor, 15 Chittaranjan Avenue, Kolkata-700 007. 2 The Respondent/Department: The Commissioner of Income Tax (Exemptions), 10 B Middleton Row, 6th Floor, Kolkata-700 071. 3 The CIT(A) The CIT 4. DR, Kolkata Bench 5.