Matushri Javerben Shivaji Shah ... vs Assessee
- CitationI.T.A. No.3124/Mum/2013
Ratio decidendi
The rule this decision rests on
The Tribunal holds that where the Director of Income Tax (Exemption) rejects an application for registration under section 12A without examining the assessee's contention that the Bombay Public Trusts Act, 1950 binds the trust to a dissolution-type distribution of its net assets, the rejection cannot stand; the matter must be restored to the authority for fresh examination of the application in light of that contention. Where the authority rejects a registration application for want of a dissolution clause in the trust deed, but does not state why the governing public trust statute is inapplicable and does not give the assessee an opportunity to amend the trust deed if it considers the clause necessary, the omission vitiates the order, and the authority must afford that opportunity on remand. Where the authority's rejection rests on the assessee not having carried on activities, and the assessee shows the trust was newly created and has since commenced activities, that ground is not sufficient by itself to reject the application without the authority considering the material on activities as it stands on remand.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
आयकर अपील य अ धकरण, मुंबई यायपीठ "ई" मुंबई IN THE INCOME TAX APPELLATE TRIBUNAL" E" BENCH, MUMBAI BEFORE S/SHRI B.R.BASKARAN (AM) AND AMIT SHUKLA, (JM) सव ी बी.आर.बा करन, लेखा सद य एवं अ मत शु ला, या यक सद य के सम
आयकर अपील सं./I.T.A. No.3124/Mum/2013 ( नधारण वष / Assessment Year :2012-13)
Matushri Javerben Shivji Shah बनाम/ Director of Income Tax th Charitable Trust, Vs. (Exemption),6 floor, M/s Mehta Kothari and Co., Piramal Chambers, CAs, Lower Parel, 17, Swastik Society road Mumbai-400013 No.2, JVPD Scheme, Vile Parle (W), Mumbai-400056 (अपीलाथ /Appellant) .. ( यथ / Respondent)
थायी ले ख ा सं . /जीआइआर सं . /PAN/GIR No. :AADTM4032F
अपीलाथ ओर से / Assessees by Shri V P Kothari यथ क ओर से/Revenue by Shri S J Singh
सुनवाई क तार ख / Date of Hearing : 22.4.2015 घोषणा क तार ख /Date of Pronouncement : 24.4.2015
आदे श / O R D E R
PER B.R. BASKARAN (AM)
The assessee has filed this appeal challenging by the decision of Ld DIT in rejecting the application filed by the assessee seeking registration u/s 12A of the Act.
2. The Ld A.R submitted that the assessee had filed application seeking registration u/s 12A of the Act in the prescribed form on 21.08.2012. However, the Ld DIT rejected the application on the following grounds:-
(a) The trust deed did not have dissolution clause.
2 I T A N o . 3 1 2 4 / Mu m / 2 0 1 3
(b) The assessee has not carried out any activities. The Ld A.R submitted that the provisions of Bombay Public Trusts Act, 1950 are applicable to the assessee, since it is registered with the Charity commission. Further as per the provisions of the above said Act, the net assets shall be given to another trust having similar objects and under no circumstances they cannot be distributed amongst the trustees. He submitted that the above said provision is binding upon the assessee trust and hence there was no requirement for the assessee to have the dissolution clause. With regard to the activities, the ld A.R submitted that the trust was created on 18.7.2011 and it was in its inception stage at the relevant point of time. He submitted that the assessee has been carrying on activities thereafter and in any case, it cannot be a ground for rejecting the application.
3. The Ld CIT(DR) strongly defended the order passed by Ld DIT.
4. On a perusal of the order passed by Ld DIT, we notice that the ld DIT did not state as to how the provisions of Bombay Public Trusts Act is not applicable to the assessee. We have noticed that the assessee has submitted that the provisions relating to dissolution of trusts as provided in Bombay Public Trusts Act are binding upon the assessee. However, this contention has not been examined by Ld CIT. Further, if the Ld DIT felt that the said provisions are not binding, then he could have given an opportunity to the assessee to amend the trust deed. No such action has been taken. With regard to the activities, the Ld A.R submitted that the assessee trust has started carrying on activities. In view of the above, we are of the view that the assessee should be given one more opportunity. Accordingly, we set aside the order of Ld DIT and restore the matter to his file with the direction to examine the application filed by the afresh in the light of discussions made supra.
3 I T A N o . 3 1 2 4 / Mu m / 2 0 1 3
5. In the result, the appeal filed by the assessee is treated as allowed for statistical purposes.
The above order was pronounced in the open court on 24th Apr, 2015.
घोषणा खल ु े यायालय म दनांकः 24th Apr, 2015 को क गई ।
Sd sd (अ मत शु ला / AMIT SHUKLA) (बी.आर.बा करन / B.R. BASKARAN) या यक सद य / JUDICIAL MEMBER लेखा सद य / ACCOUNTANT MEMBER
मुंबई Mumbai: 24th Apr,2015.
व. न.स./ SRL , Sr. PS
आदे श क त ल प अ े षत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent.
3. आयकर आयु त(अपील) / The CIT(A)- concerned
4. आयकर आयु त / CIT concerned
5. वभागीय त न ध, आयकर अपील य अ धकरण, मुंबई / DR, ITAT, Mumbai concerned
6. गाड फाईल / Guard file.
आदे शानुसार/ BY ORDER,
True copy सहायक पंजीकार (Asstt. Registrar) आयकर अपील य अ धकरण, मुंबई /ITAT, Mumbai
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