Income Tax Appellate Tribunal - Mumbai
Organisation For Autistic Individuals ... vs Assessee
IN THE INCOME TAX APPELLATE TRIBUNAL,
MUMBAI BENCH "C", MUMBAI
BEFORE SHRI RAJENDRA SINGH, ACCOUNTANT MEMBER AND
SHRI SANJAY GARG, JUDICIAL MEMBER
ITA No.1935/M/13
M/s. Organisation for Autistic Office of the Directorate of
Individuals (OAI), Income Tax (E),
805-806 Meghdoot-A, 6th Floor,
Vs.
Lokhandwala Back Road, Piramal Chambers,
Andheri (W), Parel,
Mumbai- 400 053 Mumbai - 400 012
PAN: AAATO3486E
(Appellant) (Respondent)
Assessee by : Shri Vipul Joshi
Revenue by : Shri Abhijit Patankar, D.R.
Date of Hearing : 25.07.13
Date of Pronouncement : 30.09.13
ORDER
Per Sanjay Garg, Judicial Member:
This appeal has been preferred by the assessee against the order of the DIT (Exemptions) dated 31.01.13 refusing the Registration u/s.12AA of the Income Tax Act, 1961 read with rule 17 A to the assessee-trust.
2. The ld. counsel for the assessee has submitted that the registration has been refused u/s.12AA of the Act by the DIT(Exemptions) on two grounds:
i) That at the Trust-deed of the assessee does not have any clause that the trust will not be dissolved and it is perpetual and that there is no dissolution clause in the trust-deed of the assessee.
ii) That the trust has not been able to bring any evidence on record to establish that any activity of the trust/association has been taken for 2 ITA No.1935/M/13 M/s. Organisation for Autistic Individual (OAI) the charitable purposes as a result genuineness of the activities cannot be verified.
3. The ld.AR has submitted that so far the first ground for refusal regarding no dissolution clause in the trust deed is concerned, the issue is covered in favour of the assessee with the decision of ITAT Delhi in the case of 'Shri Sai Samarpan Trust Co. vs. CIT' [2009] 27 SOT 423 (Delhi), wherein the Tribunal has held that once the trust is registered with the Sub-Registrar as a charitable trust, in the event of failure of the trust the net assets/income would obviously be taken over by the Charity Commissioner and, therefore, the registration of the trust could not be rejected by the DIT(Exemptions) and the registration was granted to the assessee-trust by the Tribunal.
4. His contention on the second ground has been that objectives of the appellant-trust are charitable in nature and further that for a newly created/established trust like the appellant one should not expect that the activities will begin immediately. By and large the activities shall commence after the grant of registration under section 12AA and exemption under section 80G(5)(vi). He has further submitted that the appellant trust has been formed in the current year itself and the carrying out of charitable activities at commencement stage are not relevant for grant of registration. The ld. DR has opposed the submission of the ld. counsel for the assessee and has relied on the orders of the DIT(Exemptions).
5. We have considered the rival submissions carefully and perused the orders of the DIT(Exemptions) as well as the decision of the ITAT Delhi in the case of 'Shri Sai Samarpan Trust Co.'(supra). The issue of refusing registration in the absence of dissolution clause in the trust-deed is covered in favour of the assessee with the decision of Co-ordinate Bench of Delhi Tribunal in the case of 'Shri Sai Samarpan Trust Co.'(supra), wherein it has 3 ITA No.1935/M/13 M/s. Organisation for Autistic Individual (OAI) been held that when the assessee trust is registered with the sub-registrar as a charitable trust, in the event of failure of the trust the net assets/income would obviously be taken over by the Charity Commissioner and the rejection of registration on this ground was held not on a sound footing and the orders of the DIT(Exemptions) were reversed.
6. The ld. AR before us has further submitted that while granting registration under the BPT Act, the provisions of the trust deed were thoroughly examined by the Charity commissioner. Even the office of charity commissioner had suggested for inclusion of a clause relating to mode of succession in the trust deed which was included vide clause 22 of the deed. He has further submitted that trust shall be irrevocable and in the most unlikely situation, if trust practically stops functioning, it can only be merged/amalgamated with other one or more public charitable trusts or bodies having similar objects subject to the approval of the Office of the Public Charity Commissioner, etc. No other material has been produced on behalf of the Revenue before us to suggest that the aims and objects of the trust are not charitable in nature or that there is any clause in the trust deed which may show that the trust is revocable.
7. So far the second issue that the trust has not been able to bring any evidence on record to establish that any activity of the trust/association has been taken for the charitable purposes is concerned, the Delhi Bench of the Tribunal, in the case of 'Dharma Sansthapak Sangh (Niyas) vs. CIT' (2008) 118 TTJ (Del) 823 : (2008) 13 DTR (Del) (Trib) 589; has held that carrying on of charitable activity, at the stage of commencement is not relevant to decide whether such trust/institution is entitled for registration. Again in the case of 'Sardari Lal Oberai Memorial Charitable Trust vs. ITO' (2005) 3 SOT 229 (Del), the Delhi Bench of the Tribunal has held that section 12AA takes 4 ITA No.1935/M/13 M/s. Organisation for Autistic Individual (OAI) care of a situation where activities have been carried out by a trust whereas it does not lay down anything negative in cases where no activities have been carried out, like in the instant case. In such a case, the sole criterion of grant/non-grant of registration would be for the CIT to see the objects of the trust. If the objects of the trust are charitable, the fact that no activity has been carried out by the trust, does not entitle the CIT to hold that the trust is not entitled to registration.
8. In view of our above observations, we hold that there was no justification for the DIT(exemptions) for refusing the registration u/s.12AA of the Act to the assessee, which is accordingly allowed to the assessee and the orders of the DIT(Exemptions) are reversed. The DIT(Exemptions) hereby directed to grant the registration u/s.12AA of the Act to the assessee.
9. In the result appeal of the assessee is hereby allowed.
Order pronounced in the open court on 30.09.2013.
Sd/- Sd/-
(Rajendra Singh) (Sanjay Garg)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Mumbai, Dated: 30.09.2013.
* Kishore
Copy to: The Appellant
The Respondent
The CIT, Concerned, Mumbai
The CIT (A) Concerned, Mumbai
The DR "C" Bench
//True Copy// [
By Order
Dy/Asstt. Registrar, ITAT, Mumbai.