Income Tax Appellate Tribunal - Mumbai
Sudhir Thackersey Charitable Trust , ... vs Assessee on 26 April, 2010
IN THE INCOME TAX APPELLATE TRIBUNAL,
MUMBAI BENCH "H",MUMBAI
BEFORE SHRI PRAMOD KUMAR (AM) & SHRI R.S. PADVEKAR (JM)
I.T.A.No.5031/Mum/2010
Sudhir Thackersey Charitable Trust, Director of Income-tax
Sir Vithaldas Chambers, (Exemption),
16, Mumbai Samachar Marg, Room No.616, Piramal Chamber,
Mumbai-400 001. Vs. Lal Baug, Parel, Mumbai-400012.
PAN: AAGTS1971E
Appellant Respondent
Appellant by Shri A.H. Dalal.
Respondent by Shri V.V. Shastri.
Date of hearing 16-08-2011
Date of pronouncement 26-08-2011
O R D E R
PER PRAMOD KUMAR, AM:
By way of this appeal, the assessee appellant has called into question correctness of Director of Income-tax (Exemption)'s order dated 26th April 2010, declining registration, to the assessee appellant, u/s.12AA(1)(b)(ii) r.w.s. 12A of the Income-tax Act, 1961.
2. The issue in appeal lies in a very narrow compass of undisputed material facts. The assessee trust came into existence vide trust deed dated 24th August 2006, and even though assessee trust was carrying out its activities and duly filing its income-tax returns, with claim of exemption u/s.11, all these years, the assessee trust did not apply for registration till 30-10-2009. It was only on 30th 2 ITA No.5031/Mum/2010 Sudhir Thackersey Ch. Trust.
October 2009 that the assessee filed an application, in Form No.10A, seeking registration u/s.12A.
3. On these facts, learned DIT declined the registration, inter alia, on the following grounds :-
"3. The submission of the assessee is considered carefully. From the details filed by the application it has been found that for the A.Y. 2008-09 there were income from interest on F.D. at Rs.10.66 lacs and interest on Bank Saving A/c. at Rs.2,628/-. The applicant has claimed exemption u/s.11 to the extent of Rs.68,709/- and accumulation of income of rest of the amount. Similarly for the A.Y. 2009-10s the income has been shown at Rs.10.70 lacs from interest on F.D. and interest on Bank Saving A/c. at Rs.4,854/-. The applicant has claimed exemption u/s.11 and also claim for accumulation of income u/s.11(1) of the I.T. Act. In fact the applicant has not yet been registered u/s.12AA of the I.T. Act, 1961, it cannot claim exemption u/s.11 of the I.T. Act, 1961. Section 12A(1) of the I.T. Act, 1961 specifically provides that provisions of Sec. 11 and 12 shall not apply in relation to the income of any trust or institution unless the following conditions are fulfilled. The main condition is that it has to be registered u/s.12AA of the I.T. Act, 1961.
4. It clearly shown that the applicant has claimed exemption which cannot be granted. The basic principle in this respect is that, claiming excessive deductions also amounts to concealment of income. Falsehood in accounts can take either of the twos forms : either an item of receipt may be suppressed fraudulently, or, an item of expenditure may be falsely (or in an exaggerated amount) claimed. Both types attempt to reduce the taxable income. Both types amount to concealment of the particulars of one's income as well as furnishing of inaccurate particulars of income. Penalty may be imposed for either or both such attempts.
5. The applicant has started claiming exemption even when it has not been registered u/s.12AA of the I.T. Act, 1961. It is a mandatory provision that the institution has to be registered u/s.12AA of the I.T. Act, 1961, for claiming exemption u/s.11 of the I.T. Act, 1961. As per the provisions of Sec. 12AA of the I.T. Act, 1961, the Commissioner of Income-tax has been granted power to look into the accounts of the institution and come to the conclusion that it is genuine.3 ITA No.5031/Mum/2010
Sudhir Thackersey Ch. Trust.
6. Considering the fact that, the income on which the applicant was supposed to pay tax but it has not been paid and wrong claim of deduction has been made.
7. As per the provisions of section 12AA(1)(b), a Trust is to be registered if the Commissioner is satisfied about the objects of the Trust and the genuineness of its activities. The applicant has not complied properly with the requirements necessary for registration u/s.12A of the Act. There is, thus, no material before me to satisfy myself about the genuineness of its activities, the conditions precedent to grant registration in this case is not satisfied. In view of the above, registration cannot be granted to the applicant trust."
4. The assessee is aggrieved and is in appeal before us.
5. We have heard the rival contentions, perused the material on record and duly considered factual matrix of the case as also the applicable legal position.
6. We find that the only reason because of which learned DIT has declined the exemption is that the assessee had not even applied for registration of trust u/s.12A, and yet the assessee has, in its income-tax returns, claimed exemption u/s.11 of the Act. In our considered view, this objection, whatever be its merits, is not relevant to the consideration on which an application for registration of a trust or charitable institution is to be examined. We have also noted that as clarified by the assessee to the DIT vide letter dated 18-4-2010, non-filing of registration application was an inadvertent lapse on the part of the person looking after affairs of the trust, and that, in any case, the assessee trust had not accepted any donation, other than corpus donation at the time of formation of trust, during this period, even as funds were spent for objectives of the trust. The assessee is stated to have committed this lapse of 4 ITA No.5031/Mum/2010 Sudhir Thackersey Ch. Trust.
not having sought requisite registration u/s.12A in good time, but this lapse cannot be visited with the consequence of its being declined registration later also. Such an approach of the learned DIT is neither supported by any specific legal provisions nor even by plain logic or rationale. All that the DIT was to see was whether objects of the trust are charitable and whether activities of the trust are bona fide. We have noted that the assessee had placed enough relevant details and supportive evidences in support of the trust objects being charitable and trust activities being bona fide - a copy of which material was also placed before us in the paper book, and that learned DIT did not find any infirmities in the material so filed. In our considered view, in these circumstances and bearing in mind entirety of the case, there were no good reasons to decline the registration sought by the assessee. The DIT has not found anything objectionable in the objects of the trust, and the objection he has raised regarding activities of the trust, as we have noticed above, is not germane to the context of granting registration. We, therefore, direct the DIT to grant the registration u/s. 12A in accordance with the law.
7. In the result, the appeal is allowed in the terms indicated above.
Order pronounced in the open Court today i.e. on the 26th day of August, 2011.
Sd/- Sd/- (R.S. PADVEKAR) (PRAMOD KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai: 26th August, 2011. NG: 5 ITA No.5031/Mum/2010 Sudhir Thackersey Ch. Trust. Copy to : 1.Assessee. 2.Department.. 3 DIT(E), Mumbai. 4 DR,"H" Bench, Mumbai. 6.Master file. (TRUE COPY) BY ORDER, Asst.Registrar, ITAT, Mumbai. 6 ITA No.5031/Mum/2010 Sudhir Thackersey Ch. Trust. Details Date Initials Designa tion 1. Draft dictated on 16-08-2011 Sr.PS/ 2. Draft Placed before author 16-08-2011 Sr.PS/ 3. Draft proposed & placed before the Second JM/AM Member 4. Draft discussed/approved by Second Member JM/AM 5. Approved Draft comes to the Sr.PS/PS Sr.PS/ 6. Kept for pronouncement on Sr.PS/ 7. File sent to the Bench Clerk Sr.PS/
8. Date on which the file goes to the Head clerk
9. Date on which file goes to the AR
10. Date of dispatch of order