BRAMHAN SABHA TRUST, MUMBAI v. CIT-1THANE, THANE

ITA 1944/MUM/2010 | misc
Pronouncement Date: 22-03-2011 | Result: Allowed

Appeal Details

RSA Number 194419914 RSA 2010
Assessee PAN AAATB7436K
Bench Mumbai
Appeal Number ITA 1944/MUM/2010
Duration Of Justice 1 year(s) 12 day(s)
Appellant BRAMHAN SABHA TRUST, MUMBAI
Respondent CIT-1THANE, THANE
Appeal Type Income Tax Appeal
Pronouncement Date 22-03-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted G
Tribunal Order Date 22-03-2011
Date Of Final Hearing 17-03-2011
Next Hearing Date 17-03-2011
Assessment Year misc
Appeal Filed On 11-03-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES G MUMBAI BEFORE SHRI R V EASWAR PRESIDENT AND SHRI PRAMOD KUMAR ACCOUNTANT MEMBER I T A NO: 1944/MUM/2010 BRAHMAN SABHA TRUST DOMBIVALI APPELLANT (PAN: AAATB7436K) VS COMMISSIONER OF INCOME TAX I THANE RESPONDENT APPELLANT BY: SHRI JAYANT BHAT & SHRI SANJIV BRAHME RESPONDENT BY: SHRI A PANAN VED O R D E R R V EASWAR PRESIDENT: THIS IS AN APPEAL BY THE ASSESSEE AGAINST AN ORDER PASSED BY THE CITI THANE WITHDRAWING REGISTRATION GRANT ED TO THE ASSESSEE-TRUST ON 22.02.2002 UNDER SECTION 12A OF THE INCOME TAX ACT 1961 BY THE IMPUGNED ORDER PASSED ON 11.01.20 10 UNDER SECTION 12AA(3) OF THE ACT. 2. THE FACTS MAY BE NOTICED VERY BRIEFLY. THE ASSE SSEE IS A CHARITABLE TRUST ESTABLISHED ON 07.10.1935. IT WAS REGISTERED UNDER THE BOMBAY TRUST ACT ON 06.01.1953. THE ASSESSEE-T RUST HAS BEEN CARRYING ON VARIOUS ACTIVITIES SUCH AS RUNNING A ME DICAL CENTRE HELPING POOR AND NEEDY STUDENTS IN THEIR EDUCATION LIBRARY CULTURAL ACTIVITIES HELPING POOR PERSONS CONDUCT THREAD CER EMONIES RUNNING A MARRIAGE BUREAU ETC. IT HAS A WOMENS WING FOR THE BENEFIT OF WOMEN IRRESPECTIVE OF CASTE CREED AND RELIGION. I T ALSO OWNS A BUILDING WHICH IS LET OUT FOR VARIOUS CEREMONIES AN D FUNCTIONS FOR RENT. ITA NO: 1944/MUM/2010 2 3. THE TRUST APPLIED FOR REGISTRATION UNDER SECTION 12A(A) OF THE ACT ON 06.12.2001 SEEKING REGISTRATION FROM THE DAT E OF ITS ESTABLISHMENT. BY ORDER DATED 22.02.2002 THE CITI II THANE REFUSED TO CONDONE THE DELAY OF ABOUT 66 YEARS IN F ILING THE APPLICATION HOLDING THAT THE TRUST WAS NOT PREVENT ED BY SUFFICIENT CAUSE FOR THE DELAY. HE HOWEVER GRANTED REGISTRATI ON FROM 01.04.2001 WHICH WAS THE FIRST DAY OF THE FINANCIA L YEAR IN WHICH THE APPLICATION WAS MADE. THE APPLICATION WAS ENTE RED AS NO.K-31 IN THE REGISTER OF APPLICATIONS MAINTAINED IN THE O FFICE OF THE CITIII THANE UNDER SECTION 12A(A) OF THE ACT. 4. BY MEANS OF AN ORDER DATED 16.07.2002 THE CITII I THANE ALSO GRANTED EXEMPTION CERTIFICATE UNDER SECTION 80 G IN RESPECT OF DONATIONS MADE TO THE ASSESSEE-TRUST. THE EXEMPTIO N AS PER THE CERTIFICATE WAS VALID UP TO 31.03.2004. 5. ON 04.06.2009 THE ASSESSEE-TRUST FILED AN APPLIC ATION BEFORE THE CIT FOR RENEWAL OF THE EXEMPTION UNDER SECTION 80G OF THE ACT. WHILE GOING THROUGH THE SAID APPLICATION THE CIT W AS OF THE VIEW THAT THERE WAS A VIOLATION OF SECTION 13(1)(B) OF T HE ACT INASMUCH AS THE ASSESSEE-TRUST ACCORDING TO HIM HAD BEEN CREA TED FOR THE BENEFIT OF THE BRAHMIN COMMUNITY. SEVERAL ARGUMENT S WOULD APPEAR TO HAVE ADVANCED BY THE ASSESSEE IN AN ATTEM PT TO PERSUADE THE CIT TO CHANGE HIS VIEW BUT THEY WERE N OT SUCCESSFUL. THE CIT ALSO PROCEEDED TO HOLD THAT THE RUNNING OF A KALYAN MANDAPAM WAS NOT A CHARITABLE OBJECT ACCORDING TO S ECTION 2(15) AS AMENDED WITH EFFECT FROM 01.04.2009. HE ALSO HE LD THAT IN VIEW OF THIS AMENDED PROVISION SOME OF THE OTHER ACTIVI TIES OF THE TRUST ITA NO: 1944/MUM/2010 3 HAVE ALSO BECOME NON-CHARITABLE AND THE INCOME FROM THOSE ACTIVITIES CANNOT BE EXEMPT UNDER SECTION 11 OF THE ACT. SINCE THE TRUSTEES WERE GIVEN ABSOLUTE LIBERTY TO APPLY THE I NCOME OF THE TRUST TO ANY OBJECT OF THE TRUST WHICH INCLUDED THE OBJE CTS WHICH ARE NOT CHARITABLE THE CIT HELD THAT THE ENTIRE INCOME OF THE TRUST CANNOT BE GIVEN THE EXEMPTION. CONSEQUENTLY HE REFUSED TO R ENEW THE CERTIFICATE EARLIER ISSUED UNDER SECTION 80G(5) OF THE ACT. HE ALSO WITHDREW THE REGISTRATION GRANTED TO THE TRUST UNDE R SECTION 12A OF THE ACT BY ORDER DATED 22.02.2002. 6. IT IS THE LEGALITY OF THE AFORESAID ORDER WHICH IS BEING CHALLENGED BEFORE US IN THIS APPEAL. ONE OF THE PR ELIMINARY OBJECTIONS OF THE APPELLANT IS THAT THERE IS NO PRO VISION IN SECTION 12AA TO ENABLE THE CIT TO CANCEL THE REGISTRATION E ARLIER GRANTED UNDER SECTION 12A OF THE ACT. WE ARE OF THE VIEW T HAT THE OBJECTION IS WELL FOUNDED. SECTION 12AA(3) PROVIDES THAT WHE RE A TRUST OR AN INSTITUTION HAS BEEN GRANTED REGISTRATION UNDER CLA USE (B) OF SUB- SECTION (1) THEREOF AND SUBSEQUENTLY THE CIT IS SAT ISFIED THAT THE ACTIVITIES OF THE TRUST WERE NOT GENUINE OR THEY WE RE BEING CARRIED OUT NOT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST HE SHALL PASS AN ORDER IN WRITING CANCELLING THE REGISTRATION OF THE TRUST. SUB-SECTION (3) OF SECTION 12AA WAS INSERTED BY THE FINANCE (NO .2) ACT 2004 WITH EFFECT FROM 01.10.2004. THIS SUB-SECTION AS IT WAS ORIGINALLY INSERTED IS NOT APPLICABLE TO THE PRESENT CASE BEC AUSE HEREIN THE ASSESSEE-TRUST WAS NOT GRANTED REGISTRATION UNDER C LAUSE (B) OF SUB- SECTION (1) OF SECTION 12AA OF THE ACT. IT WAS GRA NTED REGISTRATION UNDER SECTION 12A(A) OF THE ACT BY ORDER DATED 22.0 2.2002. IT WAS ITA NO: 1944/MUM/2010 4 HOWEVER POINTED OUT ON BEHALF OF THE INCOME TAX DEP ARTMENT THAT THE FINANCE ACT 2010 HAS INTRODUCED AN AMENDMENT TO SECTION 12AA(3) TO THE EFFECT THAT THE CIT CAN CANCEL REGIS TRATION OBTAINED BY THE ASSESSEE AT ANY TIME UNDER SECTION 12A AS I T STOOD BEFORE BEING AMENDED BY THE FINANCE (NO.2) ACT 1996. IT IS ACCORDINGLY CONTENDED THAT THE CIT CAN EVEN CANCEL REGISTRATION GRANTED TO THE TRUST UNDER SECTION 12A OF THE ACT. WE HOWEVER FIN D THAT THIS AMENDMENT WAS MADE BY THE FINANCE ACT 2010 WITH E FFECT FROM 01.06.2010 WHICH MEANS THAT AN ORDER CANCELLING RE GISTRATION GRANTED UNDER SECTION 12A CAN BE PASSED BY THE CIT UNDER SECTION 12AA(3) ONLY ON AND FROM 01.06.2010. THE PRESENT O RDER HAS BEEN PASSED BY THE CIT ON 11.01.2010 AND THEREFORE CANNO T BE SUSTAINED. 7. THE LEARNED CIT DR DREW OUR ATTENTION TO SECTION 293C OF THE ACT. IN FACT EVEN THE CIT HAS RELIED ON THIS P ROVISION IN THE LAST PARAGRAPH OF THE IMPUGNED ORDER. THIS SECTION IS T ITLED POWER TO WITHDRAW APPROVAL. IT WAS INTRODUCED BY THE FINAN CE (NO.2) ACT 2009 WITH EFFECT FROM 01.10.2009. CIRCULAR NO.5 O F 2010 ISSUED BY THE CBDT ON 03.06.2010 (2010) 324 ITR (STATUTES) 2 93 EXPLAINS THE PROVISIONS OF THE SAID FINANCE ACT. PARAGRAPH 57 EXPLAINS THE PROVISIONS OF SECTION 293C AND THE SAME IS AS UNDER : - 57. POWER TO WITHDRAW APPROVALS 57.1 UNDER THE EXISTING PROVISIONS OF I NCOME-TAX ACT AN APPROVAL IS REQUIRED TO BE GRANTED BY INCOME-TAX AUTHORITY FOR AVAILING OF VARIOUS INCENTIVES BY THE ASSESSEES. WHILE SOME PROVISIONS OF INCOME-TAX ACT SPECIFICALLY CONTAIN PROVISIONS FOR WITHDRAWAL OF APPROVAL BUT IN MANY CASES THERE IS NO SUCH SPECIFIC PROVISIONS CONTAINING POWER OF WITHDRAWAL. ITA NO: 1944/MUM/2010 5 57.2 IN ORDER TO PROVIDE SUCH EXPLICIT P ROVISIONS FOR POWER TO WITHDRAW APPROVAL A NEW SECTION 293C HAS BEEN INSERTED TO PROVIDE THAT THE CENTRAL GOVERNMENT OR THE BOARD OR AN INCOME- TAX AUTHORITY WHO HAS AUTHORITY TO GRANT APPROVAL SHALL ALSO HAVE THE POWER TO WITHDRAW THE APPROVAL AT ANY TIME. HOWEVER SUCH WITHDRAWAL CAN BE MADE ONLY AFTER GIVING A REASONABLE OPPORTUNITY OF SHOWING CAUSE AGAINST THE PROPOSED WITHDRAWAL TO THE CONCERNED ASSESSEE. 57.3 APPLICABILITY THIS AMENDMENT HAS BEEN MADE APPLICABLE WITH EFFECT FROM 1 ST OCTOBER 2009 AND WILL ACCORDINGLY APPLY IN RELATION TO ASSESSMENT YEAR 2010-11 AND SUBSEQUENT ASSESSMENT YEARS. THERE IS A DISTINCTION BETWEEN AN APPROVAL AND R EGISTRATION. THE ACT ITSELF USES BOTH THE EXPRESSIONS. SECTION 12A SPEAKS OF REGISTRATION. THERE ARE OTHER SECTIONS IN THE AC T WHICH SPEAK OF APPROVAL. FOR EXAMPLE SECTION 80G(5)(VI) SPEAKS OF THE INSTITUTION OR FUND BEING APPROVED BY THE COMMISSIO NER. AGAIN SECTION 35(2) SPEAKS OF ANY SURVEY OR ENGINEERING S ERVICES CARRIED OUT BY THE ASSESSEE HIMSELF OR BY A CONCERN WHICH I S FOR THE TIME BEING APPROVED IN THIS BEHALF BY THE BOARD. SECTIO N 35CCB(2) SPEAKS OF THE DEDUCTION UNDER THAT SECTION BEING AL LOWED SUBJECT TO THE CONDITION THAT THE PAYMENT OF THE AMOUNT BY THE ASSESSEE SHALL BE TO AN ASSOCIATION OR INSTITUTION WHICH IS FOR TH E TIME BEING APPROVED IN THIS BEHALF BY THE PRESCRIBED AUTHORITY . SECTION 35CCA(2A) ALSO REFERS TO AN APPROVAL GRANTED TO THE ASSOCIATION OR INSTITUTION TO WHOM THE ASSESSEE HAS PAID THE AMOUN T IN RESPECT OF WHICH A CLAIM FOR DEDUCTION IS MADE UNDER THE SECTI ON. IT IS NOT NECESSARY TO MULTIPLY INSTANCES. SECTION 293C USES THE EXPRESSION ITA NO: 1944/MUM/2010 6 APPROVAL. IT CANNOT THEREFORE APPLY TO A CASE OF REGISTRATION. THEREFORE THE SECTION CANNOT INFUSE VALIDITY TO TH E IMPUGNED ORDER. 8. FOR THE ABOVE REASONS WE UPHOLD THE PRELIMINARY OBJECTION RAISED BY THE ASSESSEE AND ANNUL THE IMPUGNED ORDER WHICH HAS BEEN PASSED WITHOUT JURISDICTION. THE APPEAL OF TH E ASSESSEE IS ALLOWED WITH NO ORDER AS TO COSTS. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND MARCH 2011. SD/- SD/- (PRAMOD KUMAR) (R V EASWAR) ACCOUNTANT MEMBER PRESID ENT MUMBAI DATED 22 ND MARCH 2011 SALDANHA COPY TO: 1. BRAHMAN SABHA TRUST WATWE BUILDING NEAR SHIVAJI STATUE MANPADA ROAD DOMBIVALI (EAST) 2. COMMISSIONER OF INCOME TAX I VARDAN BUILDING 1 ST FLOOR MIDC WAGALE ESTATE THANE 400 066 3. CIT(A)- 4. DR H BENCH TRUE COPY BY ORDER ASSTT. REGISTRAR ITAT MUMBAI