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Income Tax Appellate Tribunal, BANGALORE BENCH ‘A’, BANGALORE
Before: SMT. ASHA VIJAYARAGHAVAN, JM & SHRI S. RIFAUR REHMAN, AM
This appeal has been filed by the assessee against the order of the CIT(Exemption), Bangalore dated 10-12-2014 passed u/s 12AA(1)(b)(ii) of the IT Act, 1961, wherein the application for registration of the trust was rejected.
The applicant M/s Farohar Global Foundation has filed an application on 03-06-2014 for registration u/s 12A of the IT Act, 1961. The applicant was issued a letter dated 18-11-2014 requesting to furnish details/clarification by the CIT(Exempt.). Subsequently, some details were furnished by the applicant, however, the CIT(Exemptn.) held that the applicant did not furnish the following details;
a) Provisional accounts for the year ended 31/03/2014 b) Inconsistence in trust deed in respect of (a) area of operation para(4)(a) at page 9(b) Irrevocability clause (c) Dissolution clause- page26 c) Show cause as to why your trust should not be treated as religious & restricted one in view of clauses (a)4(a),(b) 9 at page 13.
The CIT(Exemptn.) held that in the absence of relevant details, it is not possible to verify the genuineness of the objects and activities of trust and by placing reliance on certain decisions held as follows;
“ The Hon’ble Karnataka High Court in the case of Ganjam Nagappa & Son Trust Vs DIT(E) reported in 269 ITR 59 have held that “Grant of exemption or renewal is not automatic in character. It is subject to the satisfaction of the authority with regard to charitable character and with regard to the applicant’s activities in terms of sec.80G r.w.r.11AA only on being satisfied, registration or renewal is permissible”. Hon’ble Kerala High Court in the case of Self Employees Institution Vs CIT reported in 247 ITR 18 has held that where there is no material before the Commissioner to be satisfied of the genuineness of the activities of the trust is a valid reason for rejection.
The Hon’ble ITAT, Bangalore in the case of DBA Institution vie its order in dated 27-01-2009, has held that the DIT(E) was within his jurisdiction to reject the application of the assessee trust for grant of registration under section 12AA since the applicant trust ‘could not substantiate its claim by bringing out the carrying on of charitable activity” & proceeded to uphold the order of the DIT(E) in rejecting the application u/s 12AA.
Further, it appears that the applicant is not interested in prosecution of this application and therefore, deserves to be dismissed on this account alone.
The law assists those who are vigilant and not those who sleep over their rights.
This principle is embedded in the well known dictum ‘Vigilanus non- dormentibusjura-subveniunt’. Courts in several cases have upheld this di8ctum.
Lack of diligence and follow up on the part of the assessee has been frowned upon by various Courts asunder; a) 106 ITR 653(SC) (b) 118 ITR 461(SC) c) 286 ITR 688 (MP) (d) 257 ITR 301(Del.)& e) 130 Taxman 61 (Mad.)
Aggrieved, the assessee is in appeal before us.
The learned counsel for the assessee Shri Satish Mody, Advocate submitted before the Bench that the assessee had provided the provisional accounts for the year ended 31-03-2014 in the paper book before us which was also produced before the CIT(Exemptn.). The learned counsel for the assessee stated that there is no inconsistency in the trust deed with respect to the area of operation or irrevocability clause and dissolution clause. Further, the learned counsel submitted as follows;
That the learned CIT(Exemptn.) Bangalore has erred in stating that there is no material before him to be satisfied regarding genuineness of the activities, when the copy of the lease agreement for the property in the city of Bangalore where the education activities for providing primary and secondary education are carried on under Vibgyor High at Survey No.66, 4thMain Road, N.S.Palya, Bannerghatta Road, Bangalore-560 076, has been placed on record together with copies of the accounts etc.
That the learned CIT(Exemptn.) Bangalore has erred in interpreting the Indenture of Trust dated 30-10-2012 known and erred to as Farohar Global Foundation through the objects for which the Trust was settled namely education has been clearly stated in Clause-4 of the Indenture dated 30-10- 2012 and other powers including the area of operation, irrevocability clause, dissolution clause are stated therein the Indenture and when the Trust is not a religious Trust and restricted as assumed by the CIT(Exemptn.)
On a query of the Bench, as to whether one more opportunity should be given to the assessee to satisfy the CIT(Exeptn.), the learned DR had no objection for the same.
In these circumstances, we find that the Trust Deed contains all the details and rejection of the application for registration u/s 12A of the IT Act, 1961 has been done by the CIT(Exemptn.) without looking into the details as
We remand the issue to the file of the CIT(Exemptn.) to examine the Trust Deed afresh, after giving an opportunity to the assessee to present its case. The CIT(Exemptn.) shall thereafter grant registration u/s 12A of the IT Act, 1961.
In the result, the appeal filed by the assessee is allowed for statistical purpose.
Order pronounced in the open court on the 31st August, 2015.