Income Tax Appellate Tribunal - Ahmedabad
Panna Lalbhai Foundation, Ahmedabad vs Assessee on 11 July, 2012
IN THE INCOME TAX APPELLATE TRIBUNAL
'A' BENCH - AHMEDABAD
(BEFORE SHRI D. K. TYAGI, JM AND A. MOHAN ALANKAMONY, AM)
ITA No.1012/Ahd/2012
A. Y.: N.A.
Panna Lalbhai Foundation, Vs The DIT (Exemption),
'Akshay', 53, Shrimali Society, 2nd Floor, Nature View Building,
Navrangpura, Ahmedabad 09 Ashram Road,
P. A. No. AACTP 0691 A Ahmedabad
(Appellant) (Respondent)
Appellant by Mrs. Urvashi Shodhan, AR
Respondent by Shri Rahul Kumar, Sr. DR
Date of hearing: 11-07-2012
Date of pronouncement: 20-07-2012
ORDER
PER A. MOHAN ALANKAMONY: This appeal is filed by the assessee trust aggrieved by the order of the learned DIT (Exemption), Ahmedabad dated 04-04-2012 passed u/s 12AA of the IT Act, denying registration applied for u/s 12A of the Act due to non- compliance of the provisions of section 12AA (1) of the Act.
2. The assessee trust had filed an application on 25-01-2012 in Form No.10A for registration of the assessee trust u/s 12A of the Act. The learned DIT (Exemption) required the assessee trust to furnish the details of its actual activities conducted since inception along with bank account which was partly complied by the assessee trust. Therefore, for further verification, the learned DIT (Exemption) ITA No.1012/Ahd/2012 (AY: N. A.) 2 Panna Lalbhai Foundation Vs DIT (E), Ahmedabad directed his Inspector to ascertain the activities of the assessee trust. Accordingly the Inspector submitted a report to the learned DIT (E) and the same is extracted herein bellow:
"As directed I had visited the address shown in the application of the abovementioned Trust i.e. at 1st floor, Akshay, 53 Shrimali Society, Near Railway Crossing, Navrangpura, Ahmedabad. This building is occupied by various companies owned by the Lalbhai (Arvind) Group. No signboard of any company was seen, so the name of the trust also was nowhere to be seen. No activity relating to the trust was as such going on and none of the trustees were present. However, I was directed to meet one o the staff members working in an organization operating here. He told me the Lalbhai Group had many trusts operating and that they were into a lot of charitable activities. He said he would however, ask the people responsible for dealing with trust matters to give a short brief on the work which would be carried out once registration was given to the Trust. A letter dated 29/3/2012 was submitted to me at the office after I visited them (placed on record)."
3. Drawing strength from the Inspector's report, the learned DIT (Exemption) arrived at a view that the activities of the assessee trust were not in conformity with the terms of object of the trust being educational, medical, advancement of music, art, drama, dance and literatures etc., and therefore refused to grant registration applied u/s 12A of the Act.
4. The learned AR vehemently argued before us that the assessee trust was at infant stage and, therefore, the view opined by the learned DIT (Exemption) is unjustified. The trust deed of the assessee trust consists of activities such as educational, medical, promotion of art, music and drama etc., to be conducted in a ITA No.1012/Ahd/2012 (AY: N. A.) 3 Panna Lalbhai Foundation Vs DIT (E), Ahmedabad charitable manner and, therefore, the assessee trust deserves to be granted registration u/s 12AA of the Act.
5. The learned DR opposed to the submission of the learned AR and prayed that the order of the learned DIT (Exemption) may be sustained.
6. We have heard the rival submissions and carefully perused the materials on record. We have also perused the trust deed produced by the learned AR before us and the decision of ITAT Chennai "D" Bench in the case of Saraswathi Swetha Educational Trust Vs DIT (Exemption) in ITA No. 495/Mds/2011 dated 09-02-2012 wherein the Tribunal relying on the decision of the co-ordinate Bench dated 19-10-2011 in the case of M/s. M. L. Meyyappan Charitable Trust Vs DIT (E) in ITA Nos. 2073 & 2074/Mds/2010 and DIT (E) Vs Meenakshii Amma Endowment Trust (2011) 50 DTR (Kar.) 243, on a similar fact and situation allowed the appeal of the assessee trust directing the learned DIT(E) to grant registration. The relevant portions of the above orders are reproduced herein below for reference:
(1) Meenakshi Amma Endowment Trust (2011) 50 DTR (Kar) 243:
"The trust was formed on 23rd Jan. 2008, and within a period of nine months they had filed an application under s. 12A for issuance of the registration claiming exemption. The fact that the corpus of the trust is nothing but the contribution of 1,000 by each of the trustees as corpus fund goes to show that the trustees were contributing the funds by themselves in a humble way and were intending to commence charitable activities. It is not even the case of the Revenue that by the time the application of the assessee came to be considered by them, the assessee had collected lots of donations for the activities of the trust. On the other hand the grievance of the concerned authorities seems to be that there was no activity which could ITA No.1012/Ahd/2012 (AY: N. A.) 4 Panna Lalbhai Foundation Vs DIT (E), Ahmedabad be termed as charitable as per the details furnished by the assessee, therefore, such registration could not be granted. When the trust itself was formed in January 2008 with the money available with the trust, one cannot expect them to do activity of charity immediately and because of that situation the authority cannot come to a conclusion that trust was not intending to do any activity of charity. In such a situation the objects of the trust have to be taken into consideration by the authority and the objects of the trust could be read from the trust deed itself. In the subsequent returns filed by the trust, if the Revenue comes across that factually trust has not conducted any charitable activities, it is always open to the authorities concerned to withdraw the registration already granted or cancel the said registration under s. 12AA(3). A trust could be formed today and within a week registration under s. 12A could be sought as there is no prohibition under the Act seeking such registration. The activities of the trust have to be considered if such registration is sought much later than the formation of the trust or after expiry of the earlier registration granted in favour of the trust. Therefore in a case of this nature where the trust has approached the authority for registration under s. 12A within a span of eight months of its formation, the above-mentioned criteria namely, the objects of the trust for which it was formed will have to be examined to be satisfied about its genuineness and activities of the trust cannot be the criterion, since it is yet to commence its activities. The conclusion arrived at by the Tribunal is just and there is no substantial question that could be gone into in the present appeal. "
(2) M/s. M. L. Meyyappan Charitable Trust Vs DIT (E) in ITA Nos. 2073 & 2074/Mds/2010 dated 19-10-2011:
".... Accordingly, the legal position on the issue becomes crystallized that at the time of consideration of registration, it is not a sine qua non that the Trust must have started its activities. In case the Trust has started its activities, the ld. CIT can examine them as has been envisaged in the Act. This above conclusion is safeguarded by sub-clause (3) incorporated in section 12AA vide this if after granting registration it is found by the ld. CIT that the ITA No.1012/Ahd/2012 (AY: N. A.) 5 Panna Lalbhai Foundation Vs DIT (E), Ahmedabad activities of the Trust are not carried out in furtherance of its charitable objects, he can cancel the registration granted to the Trust. So, when these provisions are read in conjunction, and a harmonious interpretation is given to them, we find that the view taken by the Co-ordinate Benches in numerous successive cases, some of which we have mentioned herein above, is very logical, and the same we are found to follow.
23. Accordingly, we cannot sustain the order of ld. DIT (E) in refusing to grant registration and consequent refusal to grant approval u/s 80 G of the Act. No fruitful purpose will be served by restoring the issue to the file of ld. DIT (E) and direct him to grant registration u/s 12AA and also to grant approval u/s 80 G to the assessee - Trust."
6.1 Further, we reproduce herein below the objects of the assessee trust for reference, by which we are of the view that the Trust should be construed as a charitable trust:-
"2. OBJECTS:
The Objects of the Trust hereby created shall be Public Charitable purposes and shall be maintained and administered as .such. Charitable purpose shall include:
1) Relief to the poor
2) Medical relief
3) Education
4) Social upliftment & spiritual development of Society
5) Civic amenity
6) Environment protection
7) Help to physically handicapped / mentally retarded
8) National importance
9) Help in natural and manmade calamities
10) Consumer protection
11) Sports / youth development
12) Research in any field
13) Wildlife Conservation
14) Advancement of Music, Art, Drama, Dance, Literature, etc., and
15) Advancement of any other object of general public utility.
It is further made clear that public charitable purpose ensure for the benefit of the public in India without any distinction of caste, colour or ITA No.1012/Ahd/2012 (AY: N. A.) 6 Panna Lalbhai Foundation Vs DIT (E), Ahmedabad creed and shall not be for the benefit of any particular religion, community or caste and shall not involve the , carrying on of any activity for profit.
WITHOUT in any way limiting the generality of the main object stated above but always "'n conformity with the said main object, the objects of the Trust hereby created, when specifically stated, may be as under:
(a) To assist poor individuals in their need of food or foodgrains or cloths or other necessities of life or establish, contribute to or maintain alms houses, homes or institutions for the needy, the poor or the, infirmity,
(b) Establishment and/or construction and/or maintenance, running or support of Sanatorium, Convalescent Homes, Hospitals, Dispensaries, Maternity Homes, Clinics and/or contributing for support. of such institutions and also to assist any individuals afflicted with disease or suffering in epidemics;
(c) To assist, encourage and/or impart education of any menial, physical, technical or moral kind in any manner by giving .scholarships, loans, school fees, college fees and for the purpose of books to deserving and/or needy students.
(d) Establishing) educational institutions and/or aiding schools, colleges, libraries or other institutions for imparting any type of education;
(e) To contribute, for the upliftment of society by imparting education to the poor development of slums or assisting any organization or institute having its objective of upliftment and development of society be educating masses.
(f) Establishment and/or construction and/or maintenance or running independently or support to any organization contributing in building of civic amenities like public toilets, proper drainage system, water & electric supply in slum areas etc;
g) To work independently and/or with .a organization having a similar objective of protecting the environment by educating people in that regard, planting trees, holding industrial conferences regarding various ways of curbing industrial pollution etc;
h) To render financial help to the physically handicapped and/or mentally retarded people as well as to the orphan houses maintaining the disabled persons.
i) To impart knowledge and make people aware regarding the national importance and the position of our country in the world scenario by holding ITA No.1012/Ahd/2012 (AY: N. A.) 7 Panna Lalbhai Foundation Vs DIT (E), Ahmedabad public meetings, distributing pamphlets, producing, purchasing and/or showing documentaries etc.
j) To provide financial assistance to organizations taking initiatives, assisting or contributing in any other possible way during any natural or manmade calamities such as earthquake, fire, floods, riots or accident.
k) To provide financial assistance for acquiring, construe on or maintenance of places of public utility and making it available for public purpose including housing. Also to provide financial assistance to spiritual organizations, contributing towards imparting spiritual knowledge amongst the people in the society.
l) To directly or through an organization dedicated towards the same provide consumer awareness, make the people aware of their rights against seller, render assistance to affected poor people and help them in securing their rights.
m) Establishing and/or aiding any institution for carrying on any activities towards advancement of arts like music, dance, drama, literature and in the allied activities.
n) To render assistance of financial or of any other nature for research and development related activities to an individual or organization, which are beneficial to the society at 1arge.
(o) To render all possible assistance for the advancement of any other object of general public utility, which has not been mentioned above, and which is in conformity with the scope and object of the trust.
7. In the present case before us the Trust is formed on 19/12/2011. Subsequently the Trust applied in form 10A for grant of registration under the Act on 25/01/2012. This shows that the Trust is at infant stage and the Trust needs to be registered under the provisions of the Act in order to derive benefit under it. The facts of this case are identical to the decisions cited by the Ld.AR mentioned above. Further on perusing the report of the Inspector we are of the view that no adverse inference could be gathered from it for refusing the registration under the Act. Considering the objects of the trust and the decisions of the Hon'ble ITA No.1012/Ahd/2012 (AY: N. A.) 8 Panna Lalbhai Foundation Vs DIT (E), Ahmedabad Karnataka High Court and the Tribunal cited (supra) we do not have any hesitation to direct the learned DIT (Exemption) to grant registration on its application u/s 12A and 12 AA of the Act. It is ordered accordingly.
8. In the result, the appeal of the assessee is allowed.
Order pronounced in the open Court on 20-07-2012 Sd/- Sd/-
(D. K. TYAGI) (A. MOHAN ALANKAMONY)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Lakshmikant Deka/
Copy of the order forwarded to:
1. The Appellant
2. The Respondent
3. The CIT concerned
4. The CIT(A) concerned
5. The DR, ITAT, Ahmedabad
6. Guard File
BY ORDER
Dy. Registrar, ITAT, Ahmedabad
1. Date of Dictation: 19-07-2012
2. Date on which the typed draft is placed before the Dictating Member: 19-07-2012 other Member:
3. Date on which approved draft comes to the Sr.P.S./P.S.:
4. Date on which the fair order is placed before the Dictating Member for pronouncement:
5. Date on which the fair order comes back to the Sr. P.S./P.S.:
6. Date on which the file goes to the Bench Clerk:
7. Date on which the file goes to the Head Clerk:
8. The date on which the file goes to the Assistant Registrar for signature on the order:
9. Date of Despatch of the Order: