Vishwa Nath & Santosh Bakshi Charitable Educational Trust, New Delhi v. CIT(E), New Delhi

ITA 8498/DEL/2019 | misc
Pronouncement Date: 10-05-2021 | Result: Allowed

Appeal Details

RSA Number 849820114 RSA 2019
Assessee PAN AABTV5728K
Bench Delhi
Appeal Number ITA 8498/DEL/2019
Duration Of Justice 1 year(s) 6 month(s) 10 day(s)
Appellant Vishwa Nath & Santosh Bakshi Charitable Educational Trust, New Delhi
Respondent CIT(E), New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 10-05-2021
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted F
Tribunal Order Date 10-05-2021
Last Hearing Date 01-02-2021
First Hearing Date 01-02-2021
Assessment Year misc
Appeal Filed On 31-10-2019
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F NEW DELHI (THROUGH VIDEO CONFERENCING) BEFORE SHRI AMIT SHUKLA JUDICIAL MEMBER AND SHRI B.R.R. KUMAR ACCOUNTANT MEMBER I .T.A. NO.8498/DEL/2019 M/S VISHWA NATH & SANTOSH BAKSHI CHARITABLE EDUCATIONAL TRUST 6/22 SHANTI NIKETAN NEW DELHI-110021 VS. COMMISSIONER OF INCOME TAX (EXEMPTION) CIVIC CENTRE NEW DELHI TAN/PAN: AABTV5728K (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI K. SAMPATH ADV. RESPONDENT BY: SHRI SUSHMA SINGH CIT-D.R. DATE OF HEARING: 19/02/2021 DATE OF PRONOUNCEMENT: 10/05/2021 O R D E R PER AMIT SHUKLA JM THE AFORESAID APPEAL IS DIRECTED AGAINST THE O RDER DATED 29.09.2019 PASSED U/S 12AA (1)(B) R/W SECTIO N 12A OF THE INCOME-TAX ACT 1961 (THE ACT FOR SHORT ) DATED 29.09.2019 WHEREBY LD. COMMISSIONER OF INCOME-TAX (EXEMPTIONS) [CIT(E)] REFUSED TO GRANT REGISTRATION TO THE TRUST. FOLLOWING GROUND OF APPEAL HAS BEEN TAKEN B Y THE APPELLANT TRUST:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (EXEMPTION) DELHI REJECTING THE APPLICATION FOR G RANT OF REGISTRATION MADE UNDER SECTION 12AA(1)(B) READ WIT H I.T.A. NO. 8498/DEL/2019 2 SECTION 12A OF THE INCOME TAX ACT 1961 IS ARBITRAR Y MISCONCEIVED FALLACIOUS AND ILLEGAL WHICH MUST BE QUASHED WITH FURTHER DIRECTIONS TO GRANT THE REGIST RATION AS SOUGHT. 2. BRIEF FACTS QUA THE ISSUE ARE THAT THE APPE LLANT TRUST HAD FILED APPLICATION ON 06.03.2019 IN FORM 10A SEE KING REGISTRATION U/S 12AA OF THE ACT. THE LD. CIT(E) VI DE LETTER DATED 27.05.2019 ASKED THE ASSESSEE TO SUBMIT DOCUM ENTS IN SUPPORT OF ITS CLAIM FOR REGISTRATION U/S 12A AND E XEMPTION U/S 80G OF THE ACT. IN RESPONSE THE APPELLANT TRUS T FILED A COPY OF THE TRUST DEED AND THE FINANCIAL STATEMENTS FOR THE YEARS 2017-18 AND 2018-19 WITH A NOTE ON ITS ACTIVI TIES. THE CIT(E) VIDE NOTICE DATED 17.09.2019 ASKED THE TRUST TO PROVIDE PROVISIONAL FINANCIAL STATEMENT FOR THE YEA R 2019-20 ALSO ALONG WITH DETAILS OF THE RESIDENTIAL STATUS O F THE TRUSTEE SH. SHARAD MALIK AND ALSO THE DETAILS OF THE MEETIN GS OF THE TRUST. SIMULTANEOUSLY THE CIT(E) ASKED THE TRUST T O SHOW CAUSE AS TO WHY IN THE ABSENCE OF ADEQUATE CHARITAB LE ACTIVITIES ITS APPLICATION FOR REGISTRATION U/S 12A OF THE ACT SHOULD NOT BE REJECTED. IN ANSWER THERETO IT WAS S UBMITTED BY THE TRUST THAT SH. SHARAD MALIK WAS A NON-RESIDENT INDIAN. SINCE HE WAS THE SOLE TRUSTEE MEETINGS OF THE TRUS T WERE NOT REQUIRED TO BE HELD. 3. THE TRUST INFORMED THE CIT(E) THAT IT WA S CREATED WITH A LIMITED CORPUS OF RS. 10 000/- WITH A FURTHER DEPOS ITION THAT THE PROPERTY AT 6/22 SHANTI NIKETAN NEW DELHI WOU LD WITH CERTAIN RESTRICTIONS DEVOLVE ON THE TRUST AFTER THE DEMISE OF I.T.A. NO. 8498/DEL/2019 3 THE SETTLOR SMT. SANTOSH BAKSHI. THIS WAS AS PER T HE DEPOSITIONS IN THE WILL OF SMT. SANTOSH BAKSHI DATE D 18.11.2010. THE WILL FURTHER PROVIDED FOR SH. SHARA D MALIK THE SON OF HER BROTHER SH. SATISH CHANDER MALIK TO BE AN EXECUTOR OF THE TRUST. THE WILL ALSO PROVIDED THAT THE PROPERTY AT 6/22 SHANTI NIKETAN NEW DELHI COULD B E SOLD ONLY AFTER THE DEMISE OF HER OTHER BROTHER SH. SUDE RSHAN KUMAR MALIK WHO HAD BEEN GIVEN THE RIGHT THROUGH THE WILL TO LIVE IN THAT PROPERTY TILL HIS LIFE-TIME. A COPY OF THE SAID WILL HAD BEEN FILED WITH THE CIT(E). 4. THE CIT(E) COLLATED THE FINANCIAL DETAILS FROM THE STATEMENTS PROVIDED BY THE TRUST:- S.NO. FINANCIAL YEAR VOLUNTARY CONTRIBUTION / DONATION RS. CHARITY EXPENSES RS. 1. 2017 - 18 5100 1575 2. 2018 - 19 5100 1850 3. 2019 - 20 (AS ON 15.09.2019) 125000 100000 ON AN EXAMINATION OF THE FINANCIAL STATEMENT S THE CIT(E) FOUND THAT NO CHARITABLE ACTIVITY HAD BEEN UNDERTAK EN BY THE TRUST THOUGH DURING 2019-20 AN AMOUNT OF RS. 1 00 0 00/- HAD BEEN SHOWN AS A DONATION. I.T.A. NO. 8498/DEL/2019 4 5. THE CIT(E) OBSERVED THAT THE DETAILS SUBMITTE D BY THE TRUST REVEALED THAT SMT. SANTOSH BAKSHI (THE SETTLO R) AND HER HUSBAND LATE VISHWA NATH BAKSHI OWNED THE PROPERTY LOCATED AT 6/22 SHANTI NIKETAN NEW DELHI. HER HUS BAND PASSED AWAY ON 29.05.1996 WHERE AFTER SMT. SANTOSH BAKSHI BECAME THE SOLE OWNER OF THAT PROPERTY. ON 18.11.20 10 SMT. SANTOSH BAKSHI HAD EXECUTED THE WILL WHICH ASSIGNED THE SAID PROPERTY TO THE TRUST AFTER HER DEATH BUT WITH THE FURTHER CONDITION THAT DURING THE LIFETIME OF HER BROTHER S H. SUDERSHAN KUMAR MALIK WHO WAS THEN RESIDING WITH H ER IN THE SAID PROPERTY THAT HE WOULD CONTINUE TO LIVE I N THAT PROPERTY TILL HIS DEMISE. SUBSEQUENTLY SMT. SANTOS H BAKSHI ON 03.01.2012 CREATED THE TRUST AS SETTLOR TO WHICH SHE APPOINTED SH. SHARAD MALIK AS THE SOLE TRUSTEE. THE SETTLOR WAS DIRECTED TO DONATE THE SHANTI NIKETAN PROPERTY TO THE SAID TRUST. IT WAS PROVIDED THAT THE PROCEEDS FROM THE S ALE OF THE SAID PROPERTY WERE TO BE USED FOR THE PURPOSE OF RE ALISING THE OBJECTIVES OF THE TRUST. THE SETTLOR SMT. SANTOSH BAKSHI PASSED AWAY ON 22.12.2012. 6. IN THE BACKGROUND OF THE FACTS AND MATERIAL A S CITED ABOVE THE CIT(E) OPINED THAT AS PER THE TRUST DEED THE PROPERTY WAS TO BECOME THE TRUST PROPERTY ON THE DE MISE OF THE SETTLOR. ON THE OTHER HAND AS PER THE WILL (WH ICH HAD BEEN EXECUTED PRIOR TO THE TRUST DEED) THE PROPERTY OF THE TRUST ON THE DEMISE OF THE SETTLOR WOULD BE UTILI SED BY HER BROTHER SH. SUDERSHAN KUMAR MALIK WHO IS THE UNCLE OF THE TRUSTEE DURING HIS LIFETIME. THE ABOVE CONDITION M ADE THE I.T.A. NO. 8498/DEL/2019 5 TRUST AS ONE FOR PRIVATE PURPOSE AND NOT FOR PUBLIC CHARITABLE PURPOSES WHICH WAS A PRECONDITION FOR THE GRANT OF REGISTRATION U/S 12A OF THE ACT. THE LD. CIT(E) FUR THER OBSERVED THAT THE UTILIZATION OF THE SAID PROPERTY BY SH. SUDERSHAN KUMAR MALIK WAS IN VIOLATION OF SECTION 13(1)(C) R/W SECTION 13(3) OF THE ACT. 7. IN THE AFOREMENTIONED BACKGROUND THE LD. CIT(E) HELD THAT THE TRUST DID NOT SATISFY THE CONDITIONS FOR G RANT OF REGISTRATION U/S 12A OF THE ACT AS THE TRUST PROPER TY HAD NOT BEEN UTILIZED FOR PUBLIC CHARITABLE PURPOSES AND IT WAS IN VIOLATION OF SECTION 13 OF THE ACT. IN THIS WAY THE TRUST DID NOT QUALIFY FOR REGISTRATION U/S 12AA OF THE ACT AND SO ITS APPLICATION FOR GRANT OF REGISTRATION U/S 12A HAD T O BE REJECTED. 8. THE LD. COUNSEL FOR THE APPELLANT TRUST SU BMITTED THAT THE REJECTION OF THE APPLICATION FOR REGISTRATION A S FILED BY THE TRUST HAD BEEN WRONGLY REFUSED ON A COMPLETE MISUNDERSTANDING OF THE SEQUENCE OF THE EVENTS LEAD ING TO THE FORMATION OF THE TRUST AND THE INDUCTION OF FUNDS I NTO THE TRUST ON THE SALE OF THE HOUSE SHANTI NIKETAN PROPE RTY. LD. COUNSEL SUBMITTED THAT THE DESIRE TO FORM A TRUST C AME TO THE SETTLOR OF THE TRUST SMT. SANTOSH BAKSHI THROUGH TH E WILL EXECUTED BY HER ON 18.11.2010 WHICH DECLARED THAT S HE WAS THE SOLE OWNER AND IN POSSESSION OF THE PROPERTY BE ARING NO. 6/22 SHANTI NIKETAN NEW DELHI TO WHICH SHE APPOIN TED SH. SHARAD MALIK SON OF HER LATE BROTHER SH. SATISH CH ANDER I.T.A. NO. 8498/DEL/2019 6 MALIK TO BE THE EXECUTOR AND TRUSTEE. SHE DECLARED THAT SHE HAD VESTED IN THE EXECUTOR OF THE WILL WITH THE PRO PERTY AT SHANTI NIKETAN TO HOLD IT UPON TRUST TO SELL THE S AME WITH THE POWER IN HIS ABSOLUTE DISCRETION TO POSTPONE TH E SALE SO LONG AS HE THOUGHT FIT WITHOUT HIS BEING LIABLE FO R ANY LOSS. SHE FURTHER ADDED THAT THE TRUSTEE WOULD NOT SELL T HE SAID PROPERTY DURING THE LIFETIME OF HER BROTHER SH. SU DERSHAN KUMAR MALIK WHO AT THE RELEVANT TIME WAS LIVING WI TH HER IN THAT PROPERTY. SHE FURTHER PROVIDED THAT THE TRUSTE E SH. SHARAD MALIK WOULD HOLD THE PROCEEDS OF SALE OF THE PROPERTY WHICH AMOUNT WITH THE CONCURRENCE OF THE OTHER CLOS E RELATIVES OF THE FAMILY WOULD BE USED FOR THE SPRE AD OF KNOWLEDGE AND EDUCATION THROUGH DISBURSALS TO APPRO PRIATE CHARITIES EDUCATIONAL INSTITUTIONS OR INDIVIDUALS AS THEY DEEMED FIT AND PROPER. LD. COUNSEL HAS PLACED A COP Y OF WILL ON RECORD. 9. SMT. SANTOSH BAKSHI FOLLOWED UP HER WILL W ITH THE EXECUTION OF A TRUST DEED ON 03.01.2012 WHEREIN SHE APPOINTED SH. SHARAD MALIK THE EXECUTOR OF HER WIL L AS THE TRUSTEE. SHE HAD HANDED OVER TO THE TRUSTEE A SUM O F RS. 10 000/- AS CORPUS OF THE TRUST. SHE PROVIDED FOR T HE TRUST TO EVENTUALLY RECEIVE DONATION OUT OF THE SALE OF THE PROPERTY AT SHANTI NIKETAN. IMPLIEDLY THE TRUST CAME TO POSSESS THE FUNDS FROM THE SALE OF THE PROPERTY AFTER THE DEATH OF THE BROTHER OF THE SETTLOR. UNTIL THE SETTLORS BROTHER WAS ALIVE THE DEVOLUTION OF THE PROPERTY TO THE TRUST HAD BEEN KE PT IN I.T.A. NO. 8498/DEL/2019 7 ABEYANCE BY THE SETTLOR. LD. COUNSEL HAS PLACED A C OPY OF TRUST DEED ON RECORD. 10. THE LD. COUNSEL FURTHER STATED THAT THE PRO PERTY AT SHANTI NIKETAN CAME TO BE VESTED WITH THE TRUST AS A DONATION ONLY AFTER THE OCCURRENCE OF TWO INCIDENTS NAMELY THE DEMISE OF SH. SUDERSHAN KUMAR MALIK AND THE REC EIPT OF THE SALE PROCEEDS OF THE PROPERTY THEREAFTER. THUS THE CONTENTION OF THE LD. CIT(E) THAT THE RELATIVE OF T HE TRUSTEE HAD STAYED IN THE TRUST PROPERTY WAS FACTUALLY INCO RRECT. THOUGH THE SETTLORS RELATIVE DID INDEED STAY IN TH E DEMISED PROPERTY THE PROPERTY ITSELF AT THE RELEVANT TIME D ID NOT BELONG TO THE TRUST. THE HOUSE PROPERTY GOT VESTED IN THE SUBJECT TRUST ONLY AFTER THE DEATH OF SH. SUDERSHAN KUMAR M ALIK ON 11.02.2015. CLEARLY THEREFORE LD. COUNSEL SUBMITT ED THAT ALL THE WHILE SH. SUDERSHAN KUMAR MALIK STAYED IN THE P ROPERTY IT HAD NOT DEVOLVED ON THE TRUST. DEVOLUTION WAS SP ECIFICALLY KEPT PENDING BY THE TESTAMENTARY TRUST DEED. IN THI S WAY THERE WAS NO EXPLOITATION OF THE TRUST PROPERTY FOR ANY PRIVATE PURPOSES BY ANYONE RELATED TO THE TRUSTEE. 11. LD. COUNSEL FURTHER INFORMED THAT AFTER T HE DEMISE OF SH. SUDERSHAN KUMAR MALIK ON 11.02.2105 THE PROPER TY ITSELF WAS TRESPASSED USURPED AND THE PROPERTY DEE DS WERE FORGED AND MANIPULATED FOR SALE BY SOME MISCREANTS. IT WAS ONLY AFTER SETTLEMENT OF ALL COURT CASES IN THIS BE HALF IN JULY 2017 THAT THE PROPERTY CAME TO THE HANDS OF THE TRU STEE FOR SALE. IMMEDIATELY AFTER THE SALE OF THE PROPERTY CA RRIED OUT IN I.T.A. NO. 8498/DEL/2019 8 TERMS OF ORDER DATED 04.07.2019 OF HONBLE DELHI HI GH COURT IN CS(OS) 119/2019 UNDER CHARITABLE AND RELIGIOUS T RUSTS ACT 1920 THE ENTIRE SALE CONSIDERATION WAS PLACED WITH THE TRUST FOR THE PURSUIT OF ITS ACTIVITIES AND SOLE TR USTEE SH. SHARAD MALIK. IN THIS CONNECTION THE SOLE TRUSTEE H AD FILED AFFIDAVIT DATED 19.12.2019 BEFORE HONBLE DELHI HIG H COURT REGARDING UTILISATION OF SALE PROCEEDS FOR CHARITAB LE OBJECTS OF THE TRUST. LD. COUNSEL HAS PLACED THE SALE DEED AND THE AFFIDAVIT ON RECORD. 12. AS TO THE OTHER OBJECTION OF THE LD. CIT(E ) OF THE TRUST NOT CARRYING OUT SUBSTANTIAL ACTIVITIES AFTER ITS INCORPORATION THE LD. COUNSEL SUBMITTED THAT THE ACTIVITIES AS CA RRIED ON WERE COMMENSURATE WITH THE MODEST FUNDS AVAILABLE W ITH THE TRUST. IT WAS FURTHER STATED THAT ANY TRUST IS PERM ITTED BY LAW TO DONATE MONIES FOR PROMOTING THE ACTIVITIES OF AN Y OTHER LIKE TRUST. SUCH DONATIONS TO APPROVED TRUSTS ARE TREATE D AS APPLICATION OF THE INCOME OF THE TRUST EXIGIBLE TO EXEMPTION. 13. OUR ATTENTION WAS DRAWN TO THE DECISION O F THE APEX COURT IN ANAND SOCIAL EDUCATIONAL TRUST VS. CIT & ORS. (2020) 426 ITR 340 (SC) WHEREIN THE HONBLE COURT HAD RULED THAT A NEWLY FORMED TRUST COULD BE REGISTERED EVEN THOUGH NO ACTIVITIES HAD BEEN CARRIED OUT BY IT. AD VERTING TO THE DECISION IN THE CASE OF DIT VS. FOUNDATION OF OPHTHALMIC & OPTOMETRIC EDUCATION RESEARCH CENTRE (2013) 355 ITR 361. LD. COUNSEL SUBMITTED THAT THE NON- COMMENCEMENT OF CHARITABLE ACTIVITIES BY THE TRUST WAS NO I.T.A. NO. 8498/DEL/2019 9 JUSTIFICATION FOR THE AUTHORITIES TO REJECT THE CLAI M FOR REGISTRATION. LD. COUNSEL ALSO RELIED UPON THE DECI SIONS OF THE KARNATAKA HIGH COURT IN SANJEEVAMMA HANUMANTHE GOWDA CHARITABLE TRUST VS. DIRECTOR OF INCOME-TAX (EXEMPT IONS) (2006) 285 ITR 327 (KAR) AND OF THE PUNJAB AND HARYANA HIGH COURT IN CIT VS. SURYA EDUCATIONAL AND CHARITA BLE TRUST (2013) 355 ITR 280 (P&H) TO SUBMIT THAT IF THE OBJECTS ENVISAGED BY A TRUST WERE CHARITABLE IN NATURE REGI STRATION COULD NOT BE REFUSED BY THE COMMISSIONER ON GROUNDS OF CHARITABLE ACTIVITIES NOT HAVING BEEN CONDUCTED BY THE TRUST. 14. LD. COUNSEL URGED THAT THE SEVERAL OBJECT IVES ENVISIONED BY THE TRUST WERE PURELY CHARITABLE AND HONBLE DELHI HIGH COURT HAD ALSO PASSED ORDERS FOR SALE OF TRUST PROPERTY UNDER THE CHARITABLE AND RELIGIOUS TRUSTS ACT 1920 AFTER CONSIDERING THOSE OBJECTIVES. THE LD. CIT (E) HAD NOT MADE ANY ADVERSE COMMENTS ON ANY OF THESE ASPECTS I N THE IMPUGNED ORDER. BEING SO THE REFUSAL TO REGISTER T HE TRUST ON THE ALLEGED VIOLATION OF SECTION 13(1)(C) R/W SECTI ON 13(3) OF THE ACT AND ALSO ON THE IMPRESSION THAT THE GENUINE NESS OF THE ACTIVITIES WERE NOT BEING SATISFACTORILY EXPLAI NED WERE BOTH WRONG. SINCE THE TRUST HAD THUS BEEN WRONGLY REFUSE D REGISTRATION U/S 12AA OF THE ACT HE PLEADED FOR DIR ECTIONS TO THE LD. CIT (E) TO GRANT REGISTRATION TO THE TRUST U/S 12A OF THE ACT. 15. PER CONTRA THE LD. CIT (DR) VEHEMENTLY S UBMITTED THAT THE REGISTRATION U/S 12A OF THE ACT HAD BEEN CORREC TLY REFUSED I.T.A. NO. 8498/DEL/2019 10 BY THE LD. CIT (E) BECAUSE THE PROPERTY DEVOLVED ON THE TRUST NO SOONER THE WILL OF SMT. SANTOSH BAKSHI BECAME OP ERATIVE. THAT PROPERTY WAS ADMITTED BEING PUT TO PRIVATE USE BY SH. SUDERSHAN KUMAR MALIK A RELATIVE OF THE TRUSTEE. SU CH USE WAS IN CLEAR VIOLATION OF SECTION 13(1)(C) R/W SECT ION 13(3) OF THE ACT. 16. IT WAS FURTHER SUBMITTED THAT EVEN OTHE RWISE THE TRUST HAD NOT CARRIED OUT ANY SIGNIFICANT CHARITABLE ACTI VITIES DURING FINANCIAL YEARS 2017-18 AND 2018-19. EVEN IN THE FY 2019-20 (UPTO 15.09.2019) THE ACTIVITY OF THE TRUST WAS PAS SIVE IN AS MUCH AS IT HAD SIMPLY DONATED A SUM OF RS. 1 LAC T O ANOTHER TRUST. 17. LASTLY IT WAS SUBMITTED THAT ON FINDI NG THAT THE MATERIAL ON RECORD AND THE EXPLANATIONS AS GIVEN BY THE TRUST WERE UNSATISFACTORY AND ALSO THAT THE ACTIVITIES CA RRIED OUT BETWEEN THE FINANCIAL YEARS 2017-18 UP TO 15.09.201 9 WERE NOT INSPIRING CONFIDENCE ABOUT THE GENUINENESS OF T HE ACTIVITIES OF THE TRUST THE REJECTION OF THE REGIST RATION APPLICATION BY THE CIT(E) WAS QUITE IN ORDER AND WH ICH COULD NOT BE FAULTED. 18. ACCORDING TO THE LD. CIT (DR) THE CASES CITE D ON BEHALF OF THE TRUST WERE ALL DISTINGUISHABLE ON FACTS. 19. WE HAVE CONSIDERED THE REVIVAL CONTENTIONS THE MATERIAL ON RECORD AND THE CASE LAWS CITED BEFORE U S. LD. CIT (E) HAS INVOKED TWO GROUNDS FOR REFUSING TO REGISTE R THE TRUST. I.T.A. NO. 8498/DEL/2019 11 FIRSTLY ACCORDING TO THE LD. CIT (E) THE RELATIVE OF THE SETTLOR OF THE TRUST HAD UTILISED THE TRUST SHANTI NIKETAN PROPERTY FOR HIS PRIVATE USE; SECONDLY THE LD. CIT (E) OBSERVED THAT THE TRUST HAD NOT CARRIED OUT ANY CHARITABLE ACTIVITIES DURING THE PERIOD OF ITS EXISTENCE. IN OUR OPINION BOTH THE CO NTENTIONS LEADING THE LD. CIT (E) TO REFUSE REGISTRATION TO T HE TRUST ARE NOT CORRECT. 20. THE PROPERTY AT SHANTI NIKETAN ORIGINALLY BELONGED TO THE SETTLOR SMT. SANTOSH BAKSHI. IN TERMS OF HER WI LL DATED 18.11.2010 SMT. BAKSHI HAD PROVIDED FOR THE AFORES AID PROPERTY IN WHICH SHE RESIDED TO DEVOLVE ON THE T RUST AFTER THE DEMISE OF HER BROTHER. THE TRUST ITSELF HAD BEE N FORMED WITH RS. 10 000/- BY HER AS CORPUS. THAT WAS THE SO LE INVESTITURE TO THE TRUST. THE PROPERTY AT SHANTI NI KETAN WAS NOT THE PROPERTY WITH WHICH THE TRUST WAS CREATED. THE DEVOLUTION OF THAT PROPERTY TO THE TRUST WAS RESERV ED BY THE SETTLOR OF THE TRUST FOR A LATER OCCASION. THAT WAS TO ARISE AFTER THE OCCURRENCE OF TWO INCIDENTS. THE FIRST WAS THE PASSING AWAY OF HER BROTHER SH. SUDERSHAN KUMAR MALIK WHO H AD BEEN GIVEN A LIFE TIME RIGHT OF RESIDENCE IN IT AND THE SECOND CONDITION TRUSTEE SHOULD SELL THE PROPERTY. IN EFFE CT THEREFORE THE PROPERTY AT SHANTI NIKETAN CAME TO BE REPOSED I N THE TRUST ONLY AFTER RECEIPT OF ITS SALE CONSIDERATION. TILL THE TIME SH. SUDERSHAN KUMAR MALIK WAS STAYING IN THE PROPER TY THE PROPERTY HAD NOT BEEN BEQUEATHED TO THE TRUST. CONS EQUENTLY THERE WAS NO EXPLOITATION OF TRUST PROPERTY FOR PRI VATE USE BY I.T.A. NO. 8498/DEL/2019 12 ANYONE CONNECTED WITH THE TRUST SO AS TO ATTRACT AN Y SORT OF DISQUALIFICATION. 21. AS TO THE OTHER OBJECTION OF THE CIT (E) O F THE TRUST NOT HAVING CARRIED OUT CHARITABLE ACTIVITIES DURING THE PERIOD OF ITS EXISTENCE IT NEEDS TO BE APPRECIATED THAT ANY TRUST CAN PURSUE ITS ACTIVITIES ONLY IF IT HAS FUNDS. THE FUN DS CAME TO THE POSSESSION OF THE TRUST AFTER SALE OF THE PROPE RTY AT SHANTI NIKETAN. THE APEX COURT AND THE HIGH COURT OF DELHI PUNJAB AND HARYANA KARNATAKA HAVE ALL APPRECIATED THIS PR ACTICAL ASPECT OF THE MATTER. THE APEX COURT HAS RULED IN A NAND EDUCATIONAL TRUST VS. CIT & ORS. (SUPRA) THAT A NEW LY FORMED TRUST CAN BE REGISTERED EVEN THOUGH NO ACTIVITIES H AD BEEN CARRIED OUT BY IT IN THE INTERREGNUM PERIOD. WHAT I S ESSENTIAL IS THAT THE OBJECTS OF THE TRUST ARE CHARITABLE AND ITS ACTIVITIES IF ANY ARE GENUINE. THE ACTIVITIES OF THE TRUST AS STATED IN THE TRUST DEED FALL DULY UNDER THE DEFINI TION OF CHARITY AS PROVIDED U/S 2(15) OF THE ACT. THERE IS NO MATERIAL ON RECORD TO BETRAY THE GENUINENESS OF THE TRUST AC TIVITIES. IN POINT OF FACT THE TRUST HAS WITH ITS MODEST RESOURC ES DONATED A SUM OF RS. 1 00 000/- TO ANOTHER TRUST WHICH IS N OT ONLY REGISTERED UNDER THE INCOME-TAX ACT 1961 BUT IS AL SO REGISTERED UNDER THE FCRA. DONATIONS SO MADE TESTIF Y TO THE GENUINENESS OF THE TRUST. MOREOVER THE PROPERTY OF THE TRUST WAS SOLD UNDER ORDERS PASSED BY THE HONBLE DELHI H IGH COURT WHILE EXERCISING POWERS UNDER THE CHARITABLE AND RELIGIOUS TRUSTS ACT 1920 THUS TREATING THE TRUST AS A CHARITABLE TRUST AND ALSO DIRECTING UTILISATION OF SALE PROCEEDS I.T.A. NO. 8498/DEL/2019 13 FOR CHARITABLE OBJECTIVES OF TRUST. IN THIS MANNER THE OBJECTION AS RAISED BY THE LD. CIT (E) ON THE ABSENCE OF ANY SIGNIFICANT CHARITABLE ACTIVITIES IS WITHOUT MERIT. 22. IN THE CIRCUMSTANCES WE FIND THAT THE REASONS CANVASSED BY THE LD. CIT (E) TO REFUSE REGISTRATION TO THE TRUST ARE NEITHER FACTUALLY CORRECT NOR ARE IN ACCO RDANCE WITH THE PROVISIONS OF THE ACT. THE CHARITABLE NATURE OF THE OBJECTS OF THE TRUST HAS NOT BEEN CALLED TO QUESTION. THE G ENUINENESS OF THE ACTIVITIES EVEN THOUGH MINIMAL CONFORMS TO CHARITY. WE THEREFORE DIRECT THE LD. CIT (E) TO GRANT THE REGISTRATION AS SOUGHT FOR U/S 12A OF THE ACT BY THE APPELLANT T RUST. THE APPEAL IS ALLOWED. 23. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10/05/2021 SD/- SD/- [B.R.R. KUMAR] [AMIT SHUKLA] [ACCOUNTANT MEMBER] JUDICIAL MEMBER DATED: 10/05/2021 PKK: