M/s A.K.S.Charitable Trust, CHENNAI v. DIT, CHENNAI

ITA 1193/CHNY/2011 | 2011-2012
Pronouncement Date: 29-11-2011 | Result: Allowed

Appeal Details

RSA Number 119321714 RSA 2011
Assessee PAN AACTA9780H
Bench Chennai
Appeal Number ITA 1193/CHNY/2011
Duration Of Justice 5 month(s) 4 day(s)
Appellant M/s A.K.S.Charitable Trust, CHENNAI
Respondent DIT, CHENNAI
Appeal Type Income Tax Appeal
Pronouncement Date 29-11-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted D
Tribunal Order Date 29-11-2011
Date Of Final Hearing 29-11-2011
Next Hearing Date 29-11-2011
Assessment Year 2011-2012
Appeal Filed On 24-06-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH CHENNAI BEFORE SHRI ABRAHAM P. GEORGE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN JUDICIAL MEMBER I.T.A. NO. 1193/MDS/2011 M/S A.K.S. CHARITABLE TRUST NEW NO.6 OLD NO.43 MAHARAJA SURYA ROAD ALWARPET CHENNAI 600 018. PAN : AACTA9780H (APPELLANT) V. THE INCOME TAX OFFICER (EXEMPTIONS) CHENNAI 600 034. (RESPONDENT) APPELLANT BY : SHRI J. CHANDRASEKARAN CA RESPONDENT BY : SHRI K.E.B. RAN GARAJAN JUNIOR STANDING COUNSEL DATE OF HEARING : 29.11.2011 DATE OF PRONOUNCEMENT : 29.11.2011 O R D E R PER ABRAHAM P. GEORGE ACCOUNTANT MEMBER : IN THIS APPEAL FILED BY THE ASSESSEE IT ASSAILS THE ORDER DATED 18.4.2011 OF DIRECTOR OF INCOME TAX (EXEMPTIONS) C HENNAI DENYING REGISTRATION UNDER SECTION 12AA OF INCOME-TAX ACT 1961 (IN SHORT THE ACT). I.T.A. NO. 1193/MDS/11 2 2. SHORT FACTS APROPOS ARE THAT THE ASSESSEE-TRUST ESTABLISHED THROUGH A TRUST DEED DATED 5.5.2010 HAD FILED AN AP PLICATION IN FORM 10A ON 27.10.2010 FOR REGISTRATION UNDER SECTION 12 AA OF THE ACT. LD. DIT(E) REQUIRED THE ASSESSEE TO FILE CERTAIN AD DITIONAL INFORMATION ON 25.2.2011 AND THE ASSESSEE SUBMITTED ITS REPLY V IDE LETTER DATED 14.3.2011. FROM THE REPLY SUBMITTED IT WAS NOTICED THAT ASSESSEE HAD NOT COMMENCED ITS ACTIVITIES. AS PER LD. DIT(E ) UNLESS ACTIVITIES HAD COMMENCED IT WAS NOT POSSIBLE TO EXAMINE THE G ENUINENESS OF THE ACTIVITIES AND THEREFORE THE SECOND LIMB OF SE CTION 12AA OF THE ACT COULD NOT BE SATISFIED. HE THUS CAME TO A CONC LUSION THAT IT WAS A PREMATURE CASE FOR REGISTRATION UNDER SECTION 12AA AND DENIED THE REGISTRATION. 3. NOW BEFORE US LEARNED A.R. ASSAILING THE ORDER OF LD. DIT(E) SUBMITTED THAT LD. DIT(E) NEVER QUESTIONED THE CHAR ITABLE NATURE OF OBJECTS OF THE ASSESSEE-TRUST. AS PER LEARNED A.R. THE QUESTION REGARDING EXAMINATION OF THE ACTIVITIES WOULD ARISE ONLY WHEN THE ASSESSEE HAD COMMENCED ACTIVITIES. RELIANCE WAS PL ACED ON THE DECISION OF HON'BLE KARNATAKA HIGH COURT IN THE CAS E OF DIT(E) V. I.T.A. NO. 1193/MDS/11 3 MEENAKSHI AMMA ENDOWMENT TRUST (2011) 50 DTR (KAR) 243. LEARNED A.R. SUBMITTED THAT ACTIVITIES OF A TRUST H AD TO BE CONSIDERED IF ONLY SUCH REGISTRATION WAS SOUGHT LONG AFTER FOR MATION OF THE TRUST OR AFTER THE EXPIRY OF AN EARLIER REGISTRATION. AS PER THE LEARNED A.R. THE ASSESSEE-TRUST HAS JUST BEEN ESTABLISHED AND IT COULD NOT BE EXPECTED TO HAVE VOLUMINOUS ACTIVITIES IN THE SHORT PERIOD SINCE IT WAS ESTABLISHED ON 5.5.2010. NEVERTHELESS ACCORDING T O HIM IT HAD GIVEN A CHARITY OF ` 12 000/- TO SIVANANDA SARASWATHI SEVASHRAM DONATI ON OF ` 12 000/- TO SIVANANDA ORPHANAGE FOR MAINTENANCE OF TWO CHILDREN AND DONATION OF ` 10 000/- TO UDAVUM KARANGAL WITHIN THE SHORT SPAN AND THEREFORE LD. DIT(E) BY DENYING SUC H REGISTRATION WAS NIPPING IN THE BUD AN ORGANIZATION WHICH WAS ESTABL ISHED FOR CHARITABLE CAUSE. HE HAS ALSO RELIED ON THE DECISI ON OF HON'BLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF CIT V. SURYA EDUCATIONAL & CHARITABLE TRUST [2011] 15 TAXMANN.CO M 123. 4. PER CONTRA LEARNED D.R. SUPPORTED THE ORDER OF LD. DIT(E) AND SUBMITTED THAT UNLESS ACTIVITIES HAD COMMENCED REG ISTRATION SOUGHT WAS PREMATURE AND COULD NOT BE CONSIDERED. I.T.A. NO. 1193/MDS/11 4 5. WE HAVE PERUSED THE ORDER OF LD. DIT(E) AND HEAR D THE RIVAL SUBMISSIONS CAREFULLY. THE ONLY REASON WHY THE REG ISTRATION WAS DENIED WAS THAT ASSESSEE HAD NOT COMMENCED ITS ACTI VITIES AT THE TIME WHEN LD. DIT(E) WAS CONSIDERING THE APPLICATIO N OF THE ASSESSEE FOR REGISTRATION. IT IS IMPORTANT TO NOTE THAT ASS ESSEE-TRUST WAS ESTABLISHED ONLY ON 5.5.2010 AND ITS APPLICATION WA S FILED ON 27.10.2010 BEFORE LD. DIT(E). THE HEARING WAS COND UCTED ON 18.3.2011. SO ONLY TEN MONTHS HAD ELAPSED FROM TH E DATE OF ESTABLISHMENT OF THE TRUST AND THE DATE ON WHICH TH E CASE WAS TAKEN UP FOR HEARING BY LD. DIT(E). IN THE CASE OF MEENA KSHI AMMA ENDOWMENT TRUST (SUPRA) WHICH WAS RELIED ON BY LEA RNED A.R. IT WAS HELD THAT DIT(E) WAS NOT JUSTIFIED IN DENYING REGIS TRATION ON THE GROUND THAT ASSESSEE HAD NOT YET COMMENCED ITS ACTI VITIES WHEN THE TRUST WAS OF RECENT ORIGIN. THEIR LORDSHIPS OBSERV ED THAT WHEN THE TRUST WAS JUST FORMED WITH A CONTRIBUTION OF ` 1000 BY EACH OF THE TRUSTEES ONE COULD NOT EXPECT IT TO START ITS CHAR ITABLE ACTIVITY IMMEDIATELY AND CONCERNED AUTHORITY FOR THAT REASON SHOULD NOT COME TO A CONCLUSION THAT THE TRUST WAS NOT INTENDING TO DO ANY CHARITABLE I.T.A. NO. 1193/MDS/11 5 ACTIVITY AT ALL. THEIR LORDSHIPS OBSERVED THAT IN SUCH A SITUATION THE OBJECTS OF THE TRUST ALONE WAS TO BE CONSIDERED FOR THE PURPOSE OF DECIDING ON AN APPLICATION FOR REGISTRATION UNDER S ECTION 12AA OF THE ACT. IN THE CASE GIVEN BEFORE US THE OBJECTS WERE NOT FOUND TO BE NOT CHARITABLE. IN FACT THE OBJECTS AS GIVEN UNDER CL AUSE 3 OF THE TRUST DEED DATED 5 TH MAY 2010 WERE VERY MUCH CHARITABLE. ASSESSEE- TRUST OUGHT NOT HAVE BEEN REFUSED REGISTRATION JUST BECAUSE IT HAD NOT COMMENCED ITS ACTIVITIES. IN ANY CASE IT WAS ABLE TO SHOW THAT IT HAD STARTED DOING CHARITY. THE VOLUME OF CHARITY IS NO T RELEVANT FOR THE PURPOSE OF CONSIDERING AN APPLICATION FOR REGISTRAT ION UNDER SECTION 12AA OF THE ACT. IN TAKING THIS VIEW WE ARE SUPPO RTED BY THE DECISION OF HON'BLE PUNJAB AND HARYANA HIGH COURT I N THE CASE OF SURYA EDUCATIONAL & CHARITABLE TRUST (SUPRA). WE A RE OF THE OPINION THAT LD. DIT(E) HAD UNJUSTIFIABLY DENIED THE REGIST RATION SOUGHT BY THE ASSESSEE. ORDER OF LD. DIT(E) IS QUASHED AND HE IS DIRECTED TO GRANT REGISTRATION TO THE ASSESSEE-TRUST UNDER SECTION 12 AA OF THE ACT FROM THE DATE OF ITS APPLICATION. 6. IN THE RESULT APPEAL FILED BY THE ASSESSEE IS A LLOWED. I.T.A. NO. 1193/MDS/11 6 ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF HEARING ON 29 TH NOVEMBER 2011. SD/- SD/- (GEORGE MATHAN) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI DATED THE 29 TH NOVEMBER 2011. KRI. COPY TO: APPELLANT/RESPONDENT/DIT(E) CHENNAI/D.R. / GUARD FILE