SHRI LALJI MAHARAJ MANDIR TRUST,SURAT vs. THE COMMISSIONER OF INCOME TAX (EXEMPTION), AHMEDABAD

Captioned two appeals filed by separate two assessees, pertaining to same Assessment Year 2022-23, are directed against the separate orders passed by the Commissioner of Income-Tax(Exemption)-Ahmedabad [in short “ld. CIT(Exemption)”] dated 30.03.2023, wherein Ld. CIT(Exemption) has denied registration under section 12AB of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). & 266/SRT/2023 A.Y. 22-23 Sh. Muni Suvrat Swami Jain Daherasar & Sh. Lalji Maharaj Mandir Trust

Since the issues involved in both the appeals are common and identical; therefore, both appeals have been heard together and are being disposed of by this consolidated order. For the sake of convenience, the grounds as well as the facts narrated in for assessment year 2022-23, have been taken into consideration for deciding these two appeals en masse.

Brief facts qua the issue as per “lead” case are that assessee-trust filed application for registration of the trust u/s 12AB of the Act through electronically, on 25.09.2022 in Form No.10AB under Rule 17A of the Income Tax, Rules, 1962. Thereafter a notice was issued to the assessee- trust on 10.12.2022 and sent through ITBA on the e-mail id given by the assessee-trust in its online application, with a request to furnish detailed note on the activities actually caried out by the assessee-trust as well as certain details/documents as mentioned therein. The above-mentioned inquiry about the actual activities of the trust is necessary in view of the mandatory provision of the procedure for registration u/s 12AB of the Act. On perusal of details furnished by the assessee/applicant, it was Page | 2 & 266/SRT/2023 A.Y. 22-23 Sh. Muni Suvrat Swami Jain Daherasar & Sh. Lalji Maharaj Mandir Trust observed by Ld. CIT(Exemption) that the assessee/applicant has not furnished copy of Trust deed/Instrument of creation and in place of the same had submitted copy of re-drafted Trust deed stating that the Trust was established by way of a valid Trust deed to carry out the religious and charitable activities and have been in existence since 26th February, 1986 as per Income Tax Records. It has also been stated by assessee- trust that owing to passage of time, the Trustee have lost trace of the aforementioned Trust Deed and the Trustee were unable to find a copy of the Trust Deed, even after duly inquiring with the Trust's CA and the Charity Commissioner's Office. It has further been stated by the assessee-trust that in the interest of regularizing the Trust's legal standing, it is decided to redraft the Trust deed in the manner that is consistent with the activities carried out by the Trust across several decades, which are purportedly undertaken in consonance with the underlying objects. It has been emphasized by assessee-trust that none of the objects envisaged by the original Trust Deed have been obliterated, Therefore, a notice/letter was issued by Ld. CIT(Exemption) to the assessee/applicant to furnish certain details/documents/clarification and which is reproduced hereunder: “With reference to your application filed in Form 10AB for registration u/s 12A(1)(ac)(iii) of the Income Tax Act, 1961 and subsequently made submission, you are required to furnish the following documents/ clarification/ information: 2. On perusal of the trust deed furnished by you, you have stated that "Owing to passage of time, the Trustees have lost trace of the aforementioned Trust Deed. The Trustees were unable to find a copy of the Trust deed, even after duly inquiring with the Trust's Chartered Accountants and the Charity Commissioner's office. Therefore, in the interest of regularizing the Trust's legal standing, it is decided to redraft the Trust deed in a manner that is consistent with activities carried out by the Trust across several decades, which are purportedly undertaken in consonance with the underlying objects. It is emphasized that none of the objects envisaged by the original Trust Deed have been obliterated."

In this respect, your attention is invited to the Rule 17A of Income tax Rules, 1962, wherein the copy of trust deed/instrument of creation is required to be filed. However, as detailed above, you have stated that the original Page | 3 & 266/SRT/2023 A.Y. 22-23 Sh. Muni Suvrat Swami Jain Daherasar & Sh. Lalji Maharaj Mandir Trust trust deed is not traceable and that's why you have redrafted the trust deed, but you have not explained the basis of redrafting of present deed submitted nor has given proof that the various clauses as appearing in redrafted deed is actually exact copy of clauses appeared in original deed. Therefore, you are requested to submit the self certified copy of original trust deed. Also explain as to whether the said redrafted deed has been submitted to the charity commissioner and the same has been taken on record by the them. If yes, submit a proof thereof.

You are also requested to explain as to whether the trust was granted any registration u/s. 12A or 12AA, if yes, then submit copy thereof.

You are requested to submit your reply on 20/03/2023 by 11:30 A.M. Kindly note that in the event of non-submission, it will be presumed that you have no objection over the rejection of your above-said application. Further, this is final opportunity and no requests for adjournment will be entertained 6. In response to the same, the assessee vide reply dated 17/03/2023 the assessee-trust has submitted the copy of PTR along with other details/documents. The submissions of the applicant/assessee was considered by Ld. CIT(Exemption). On perusal of the PTR submitted, it was noted by the Ld. CIT(Exemption) that the objects of the applicant are "Maintaining the Dehrasar and performing religious worship". However, as per the redrafted trust deed, the objects of the applicant/assessee are as follows: “a. To carry out religious rites, prayers and practices in devotion of the principles of Jainism; b. To spread awareness about customs, traditions, culture, and values, particularly those pertaining to the Jain sect;. c. To assist the community at large in accessing both academic and religious education; d. To provide help to Jain monks in their endeavour to realize the Jain ideals of enlightenment, detachment and 'moksh'; e. To foster a spirit of social and community well-being, harmony and oneness, & 266/SRT/2023 A.Y. 22-23 Sh. Muni Suvrat Swami Jain Daherasar & Sh. Lalji Maharaj Mandir Trust f. To ensure fair treatment and compassion for all lifeforms irrespective of biological species through the Jain belief of Jivdaya' that views all existence as equal; g. To work towards improving the physical and mental health of the society, h. To provide financial and/or medical relief to the poor and those in economic need; h. To provide relief and/or assistance to orphans, widows, disabled, and/or recluse persons; l. To engage in any other activity of general public utility."

The comparison of the objects as stated in PTR and in redrafted deed submitted by the applicant/assessee makes it evident that the same are not identical and not even similar. Since the applicant/assessee has itself admitted that the objects enumerated in the said redrafted trust deed is consistent with the activities carried out by the trust across several decades, the same proves that the applicant/assessee has been engaged in activities which was not otherwise as per the objects of the Trust incorporated in the PTR submitted by the applicant/assessee i.e. "Maintaining the Dehrasar and performing religious worship". The applicant/assessee has not submitted that after incorporating the said objects in the PTR, they have made any modification in its object which was duly intimated/approved by the Charity Commissioner. The applicant/assessee has not submitted any clarification on the above crucial aspect. Therefore, Ld. CIT(Exemption) held that no verification of the objects as per the trust deed with the activities could be carried out. Thus, the genuineness of the activities does not get established, due to non-compliance by the applicant/assessee. Section 12AB makes, it very clear that before granting registration under this section, the Commissioner has to satisfy himself about the genuineness of the activities of the trust or institution and also he has to verify that these activities are in consonance with the objects of the trust or institution. Further, he has to ensure that other laws material for the purpose of Page | 5 & 266/SRT/2023 A.Y. 22-23 Sh. Muni Suvrat Swami Jain Daherasar & Sh. Lalji Maharaj Mandir Trust achieving objects are complied with. Reliance in this regard was also placed on the judgment delivered by the Hon'ble Supreme Court in the case of Commissioner of Income-tax, Ujjain Vs Dawoodi Bohara Jamat Civil Appeal No. 2492 of 2014, wherein the Hon'ble Apex Court while adjudicating similar provisions u/s. 12AA of the Act has held as under: "Section 12AA lays down the procedure to be followed by the Commissioner for grant or refusal of application for registration made under Section 12A. According to procedure so laid down, the Commissioner shall call for documents and information and conduct an enquiry to satisfy himself of the genuineness of the trust and upon reaching satisfaction of the charitable or religious nature of the objects and the authenticity of the activities of the trust, he would grant the registration. If he is not satisfied of the aforesaid, the request made in the application may be declined."

Further, while adjudicating similar provisions u/s 10(23C) of the Act, the Hon'ble Supreme Court in the case of M/s New Noble Educational Society in Civil Appeal No. 3795 of 2014 has held as under. "While considering applications for approval under Section 10(23C), the Commissioner or the concerned authority as the case may be under the second proviso is not bound to examine only the objects of the institution. To ascertain the genuineness of the institution and the manner of its functioning, the Commissioner or other authority is free to call for the audited accounts or other such documents for recording satisfaction where the society, trust or institution genuinely seeks to achieve the objects which it professes. The observations made in American Hotel (supra) suggest that the Commissioner could not call for the records and that the examination of such accounts would be at the stage of assessment Whilst that reasoning undoubtedly applies to newly set up charities, trusts etc. the proviso under Section 10(23C) is not confined to newly set up trusts — it also applies to existing ones. The Commissioner or other authority is not in any manner constrained from examining accounts and other related documents to see the pattern of income and expenditure."

Based on the above factual position, the Ld. CIT(Exemption) noted that the applicant/assessee has failed to file documentary evidences to enable to satisfy about the genuineness of its activities and to verify these activities are in consonance with its objects. Looking to the above facts, Ld. CIT(Exemption) was unable to arrive at the satisfaction of the genuineness of the activities. Hence, application filed & 266/SRT/2023 A.Y. 22-23 Sh. Muni Suvrat Swami Jain Daherasar & Sh. Lalji Maharaj Mandir Trust in Form No. 10AB for the registration u/s. 12AB of the IT. Act, 1961, was rejected by Ld. CIT(Exemption).

Aggrieved by the order of Ld. CIT(Exemption), the assessee is in appeal before us.

The Ld. Counsel for the assessee submitted that objects specified in re-drafted trust deed were to carry out religious rites, prayers and practices in devotion of the principles of Jainism; to spread awareness about customs, traditions, culture and values, particularly those pertaining to the jain Sect; to assist the community at large in accessing both academic and religious education; to provide help to Jain monks in their endeavour to realize the Jain ideals of enlightenment, detachment and ‘moksh’; to foster a spirit of social and community well-being, harmony and oneness; to ensure fair treatment and compassion for all life-forms irrespective of biological species through the Jain belief of ‘Jivdaya’ that views all existence as equal; to work towards improving the physical and mental health of the society; to provide financial and / or medical relief to the poor and those in economic need; to provide relief and / or assistance to orphans, widows, disabled and / or recluse persons; to engage in any other activity of general public utility. The Ld. Counsel submitted that objects specified in re-drafted trust deed are mere elaboration of primary object ‘Maintaining Daherasar and performing religious worship’ specified in PTR. The satisfaction of the Ld. CIT(Exemption) should be whether activities and objects are not other than religious or charitable. For comparing PTR/Trust deed is not served the purpose. The assessee-trust is registered under any other law (in this case with the Charity Commissioner) which Ld. CIT(Exemption) has not disputed. The Ld. CIT(Exemption) could have sought clarification if he is not satisfied with the evidence furnished. & 266/SRT/2023 A.Y. 22-23 Sh. Muni Suvrat Swami Jain Daherasar & Sh. Lalji Maharaj Mandir Trust 12. Learned Departmental Representative relied upon the orders of the authorities below.

We have heard both the parties and perused the materials available on record. We note that objects specified in re-drafted trust- deed are mere elaboration of primary object and we also note that objects of assessee-trust and activities of the assessee-trust are not other than religious or charitable purpose. We note that solitary reason to reject the application of assessee-trust, in Form No.10AAB for registration u/s 12AB of the Act was that on perusal of the PTR by Ld. CIT(Exemption, it was observed by him that the objects of the assessee- trust were “maintaining the Dahrasar and performing religious worship” which were different than the re-drafted Trust Deed. The Ld. CIT(Exemption) reproduced the objects, as per the re-drafted Trust Deed on pages No. 7 and 8 of his order. In these conflicting circumstances, we are of the view that one more opportunity should be given to the assessee-trust to explain the objects of PTR and objects of re-drafted Trust Deed before Ld. CIT(E). Based on these facts and circumstances, we direct the Ld. CIT(Exemption) to examine the objects mentioned in PTR and objects mentioned in re-drafted Trust Deed and pass the order in accordance with law.

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

Since we have adjudicated the assessee’s appeal in “lead” case in and the facts in other assessee’s appeal in is identical and same, therefore our instant adjudication shall apply mutatis mutandis also.

In the result, both appeal of assessee are allowed for statistical purposes in above terms. & 266/SRT/2023 A.Y. 22-23 Sh. Muni Suvrat Swami Jain Daherasar & Sh. Lalji Maharaj Mandir Trust