BHAGWATI FOUNDATION,KOLKATA vs. CIT (EXEMPTION), KOLKATA

The only issue raised by the assessee in the various grounds of appeal is against the order of ld. CIT (E), Kolkata, refusing to grant approval of Section 12A(1)(ac)(iii) of the Income-tax Act, 1961 (the Act), on the ground that the trust deed of the trust is not having irrevocability Clause or Dissolution Clause by ignoring the facts that both the clauses were adopted by the trustees by resolution dated 28.07.1986.

The facts in brief are that the assessee filed application u/s 12A(1)(ac)(iii) of the Act in Form No.10AB on 02.01.2024.

Aggrieved by the order of CIT(E) , the assessee preferred an appeal before the Tribunal and submitted that the CIT(E) has simply rejected the application for registration filed by the assessee on the ground that the trust deed does not contain irrevocability and resolution clause. The ld. AR subsequently submitted before us that this cannot be ground for rejection. The ld. AR submitted the main object of the trust are contain and mentioned in the trust deed and were not doubted at all by the CIT(E) and the application for registration has been rejected on technical ground only. The assessee submitted the trust has been functioning regularly and has been carrying on its activities accordance with the main objects which were never doubted. The ld. AR submitted that merely on the basis that the trust

The ld. DR on the other hand, relied on the order of CIT(E) by submitting, since, the above clauses as regards dissolution / irrevocability were not there, therefore, registration was rightly rejected by the CIT(E).

After hearing the rival contentions and perusing the materials available on record, we find that the trust has regularly functioning since its inception and pursuing its objects as prescribed in trust deed. The trust was registered vide registration no. 1556/CT/BE23486-87 dated 10.07.1989. The Revenue has not either doubted the nature of activities carried on by the assessee trust nor any adverse remarks were ever drawn in the instant case. The registration is rejected merely on the ground trust deed did not contain the dissolution and irrevocability clause. Moreover, we note that the assessee has already filed a resolution adopted by the management committee, wherein the dissolution and irrevocability clause were already adopted and finally incorporated into the trust deed. In our opinion, the case of the assessee was squarely covered by the decision of the Rajasthan High Court in case of Shri Narshinghji Ka Mandir (supra), wherein the Hon'ble court has held that

In the result, the appeal of the assessee is allowed.