Income Tax Appellate Tribunal - Pune
Sharadaben Navanitlal Shah Trust, Pune vs Commissioner Of Income Tax ... on 2 December, 2020
आयकर अपील य अ धकरण "बी" यायपीठ पण
ु े म ।
IN THE INCOME TAX APPELLATE TRIBUNAL "B" BENCH, PUNE
(Through Virtual Court)
BEFORE SHRI INTURI RAMA RAO, AM
AND SHRI PARTHA SARATHI CHAUDHURY, JM
आयकर अपील सं. / ITA No.140/PUN/2020
Shardaben Navanitlal Shah Trust,
E-104, Sr.No.587, Hyde Park,
Market Yard, Pune - 411037.
PAN : AATTS5613A. .......अपीलाथ / Appellant
बनाम / V/s.
CIT (Exemption),
Pune. ...... यथ / Respondent
Assessee by : None.
Revenue by : Shri Deepak Garg.
सुनवाई क तारीख / Date of Hearing : 02.12.2020
घोषणा क तारीख / Date of Pronouncement : 02.12.2020
आदे श / ORDER
PER INTURI RAMA RAO, AM:
This is an appeal filed by the assessee trust directed against the order of learned Commissioner of Income Tax (Exemption), Pune dated 18.03.2019 passed under Sec.12AA(1)(b)(ii) of the Income Tax Act, 1961 (for short "the Act") denying the grant of registration under Sec.12AA of the Act.
2. The appellant trust raised the following grounds of appeal :-
"1. The learned CIT erred in not granting the registration u/s 12AA to the appellant trust.
2. The learned CIT erred in holding that because the appellant trust had received corpus donations in F.Y. 2018 - 19, the appellant was indulging in profit making activities and the charitable objects were not proved and hence, the appellant trust is not entitled to registration u/s 12AA. 2 ITA No.140/PUN/2020
3. The learned CIT failed to appreciate that -
a. The objects of the appellant trust are charitable in nature as per section 2(15) of the Act and therefore, registration u/s 12AA ought to have been granted to the trust.
b. The appellant had not carried out any non charitable activity. c. The appellant had already applied for registration on 17.09.2018 and the registration was not granted as the appellant had not submitted certain details.
d. In view of the fact that the appellant had filed the first application for registration on 17.09.2018, registration u/s 12AA ought to have been granted w.e.f. F.Y. 2018 - 19 onwards.
e. Without Prejudice, the second application having been made on
03.05.2019, registration u/s 12AA ought to have been granted w.e.f. F.Y. 2019 - 20.
4. The learned CIT was not justified in holding that simply because the appellant trust had received corpus donations in the earlier year, the objects of the trust were not charitable.
5. The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal.
3. The brief facts of the case are as under :-
The appellant is a trust registered under the provisions of Bombay Public Trust Act, 1950 on 15.12.2017. The applicant trust made an application in Form No.10A for grant of registration under Sec.12AA of the Income Tax Act on 23.05.2019. The ld. Commissioner of Income Tax (Exemptions) called upon the assessee to file certain details on 23.05.2019 which was duly complied with by the appellant trust. The ld. Commissioner of Income Tax (Exemptions) on perusal of the information filed by the appellant trust had concluded that the receipt of Rs.52,00,000/- during the Financial Year 2018 -19 towards "Trust Funds or Corpus Fund" is nothing but a voluntary donation which forms part of the income as per Sec.2(24)(iia) of I.T. Act. According to the ld.
Commissioner of Income Tax (Exemptions), on account of the conduct of appellant trust in not showing said receipt as part of voluntary donation escaped the assessment of the income to tax and gave a finding the appellant 3 ITA No.140/PUN/2020 trust had indulged in activities from which huge receipts have been generated. Accordingly, the ld. Commissioner of Income Tax (Exemptions), concluded that the genuineness of the charitable nature of the activities of the trust are not established and therefore denied the registration under Sec.12AA of the Act vide impugned order.
4. Being aggrieved by the above order of ld. Commissioner of Income Tax (Exemptions), denying the registration under Sec.12AA of the Act, the appellant trust is before us in the present appeal.
5. Before us, when the matter was called upon, none appeared on behalf of the assessee / appellant trust. On the other hand, ld. CIT-DR had relied on the order of the ld. Commissioner of Income Tax (Exemptions).
6. We heard the ld. CIT-DR and perused the material on record. On perusal of the impugned order, it is crystal clear that it is not the case of ld. Commissioner of Income Tax (Exemptions), the objects of the appellant trust are not charitable in nature. The ld. Commissioner of Income Tax (Exemptions) had denied the registration under Sec.12AA of the Act by merely re-characterizing the donations received towards "Corpus Fund" of the trust as a voluntary donations falling within the ambit of provisions of Sec.2(24)(iia) of the Act. In our considered opinion, this is an item for examination during the course of assessment proceedings of the trust and no re-characterization of any receipt is permissible during the course of proceedings for grant of the registration under Sec.12AA of the Act. It is a trite law that when the ld. Commissioner of Income Tax (Exemptions) found that the objects of the trust are charitable in nature, the denial of registration under Sec.12AA of the Act is 4 ITA No.140/PUN/2020 improper. Furthermore, there is no material brought on record by the ld. Commissioner of Income Tax (Exemptions) which suggests that genuineness of activities are in doubt. The finding of the ld. Commissioner of Income Tax (Exemptions) that the genuineness of the activities is not established is mere bald finding without any material on record. In the circumstances, the findings of ld. Commissioner of Income Tax (Exemptions) cannot be sustained under law. Therefore, we direct ld. Commissioner of Income Tax (Exemptions), Pune to grant the registration from the date of the application i.e., 23.05.2019.
7. The grounds of appeal raised by the appellant seeking grant of registration earlier to date of application cannot be allowed for the reason that w.e.f 1st day of June, 2007, it is clearly provided vide sub-section (2) of Sec.12A of the Income Tax Act that the provisions of Sec.11 and 12 shall apply in relation to income of the trust from the assessment year immediately following the Financial Year in which the application for grant of registration is made. Impliedly, the ld. Commissioner of Income Tax (Exemptions) is not empowered to grant the registration with retrospective effect, there are no provisions providing exceptions to the sub-section (2) of Sec.12A under the statute. In the light of this discussion, these grounds of appeal are dismissed.
8. In the result, the appeal of the assessee is partly allowed.
Order pronounced on this 2nd day of December, 2020.
Sd/- Sd/-
(PARTHA SARATHI CHAUDHURY) (INTURI RAMA RAO)
याियक सद य/JUDICIAL
य MEMBER लेखा सद य/ACCOUNTANT
य MEMBER
पुणे / Pune; दनांक / Dated : 2nd December, 2020.
Yamini
5
ITA No.140/PUN/2020
आदेश क ितिलिप अ ेिषत / Copy of the Order forwarded to :
1. अपीलाथ / The Appellant.
2. यथ / The Respondent.
3. The CIT (Exemption), Pune.
4. िवभागीय ितिनिध, आयकर अपीलीय अिधकरण, "बी" ब च, पुणे / DR, ITAT, "B" Bench, Pune.
5. गाड फ़ाइल / Guard File.
आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.