Income Tax Appellate Tribunal - Pune
Usha-Panna Pitaliya Charitable Trust, ... vs Assessee on 2 April, 2014
IN THE INCOME TAX APPELLATE TRIBUNAL
PUNE BENCHE "B", PUNE
BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER
AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER
ITA No.716/PN/2013
Usha-Panna Pitaliya Charitable Trust,
"Panna" Sr.No.567,
Vastunagar Society,
Bibwewadi-Kondhwa Road,
Opp. Zhala Complex,
Pune - 411 037.
PAN : AAATU4858L .... Appellant
Vs.
Commissioner of Income Tax-I, Pune. .... Respondent
Assessee by : Mr. Suhas P. Bora
Department by : Mr. A.K. Modi
Date of hearing : 02-04-2014
Date of pronouncement : 21-04-2014
ORDER
PER G. S. PANNU, AM
The captioned appeal by the assessee is directed against an order of the Commissioner of Income Tax-I, Pune (in short "the Commissioner") dated 26.02.2013 declining the grant of registration u/s 12AA(1)(b) of the Income-tax Act,1961 (in short "the Act").
2. In brief, the facts are that the assessee is a Trust set up on 28.04.2012 and was registered under the Bombay Public Trust Act, 1950 vide notification dated 27.07.2012. On 22.08.2012, assessee approached the Commissioner in prescribed Form No.10A seeking registration u/s 12A of the Act. The Commissioner has denied the registration on the ground that the activities in relation to the objects of the Trust were not started. As per the Commissioner, though the objects of the assessee, as per the Memorandum of Association, are charitable in nature but in the absence of any activity whatsoever no satisfaction could be formed as regards the genuineness of the activities and therefore he denied registration u/s 12A of the Act.
2 ITA No.716/PN/2013
3. Before us, the learned counsel for the assessee submitted that once the Commissioner was of the opinion that the objects of the assessee Trust are charitable in nature, mere absence of starting of the activities cannot be a ground to deny the registration u/s 12A of the Act. It is pointed out that there is no such condition prescribed in section 12AA(1) of the Act which would require the assessee to start his activity and only thereafter approach the Commissioner for registration u/s 12AA(1) of the Act, and therefore the Commissioner erred in denying registration on an unsustainable ground. The learned counsel also pointed out that identical issue has been considered by the Pune Bench of the Tribunal in the case of Advik Foundation vs. CIT-V, Pune vide ITA No.1617 & 1618/PN/2011 dated 24.06.2013 in favour of the assessee.
4. On the other hand, learned CIT-DR has not controverted the assertion of the assessee that a similar issue has been decided by the Pune Bench of the Tribunal in the case of Advik Foundation (supra) in favour of the assessee but he has pointed point out that a contrary view has been expressed by the Hon'ble Punjab & Haryana High Court in the case of Amar Shiv Mandir Trust (Regd.) vs. CIT, (2008) 296 ITR 415 (P&H) and also by the Hon'ble Kerala High Court in the case of Self Employers Services Society vs. CIT, (2001) 247 ITR 18 (Ker). In this manner, the reason advanced by the Commissioner to deny the registration has been sought to be justified.
5. In reply, the learned counsel submitted that the Pune Bench of the Tribunal in the case of Advik Foundation (supra) has noted the divergent views of the High Courts and ultimately followed the judgement of the Hon'ble Gujarat High Court in the case of CIT vs. Kutchi Dasa Oswal Moto Pariwar Ambama Trust vide Tax Appeal No.918/2011 order dated 10.12.2012 and decided the issue in favour of the assessee. Apart therefrom, it has been pointed out that the Hon'ble Delhi High Court in the case of DIT vs. Foundation 3 ITA No.716/PN/2013 of Ophthalmic & Optometry Research Education Centre vide order dated 16.08.2012 has also upheld a similar view. It is submitted that in view of the contrary views of different High Courts and in the absence of any judgement of the Hon'ble Jurisdictional High Court, a view which is favourable to the assessee be preferred, as done by the Pune Bench of the Tribunal in the case of Advik Foundation (supra).
6. We have carefully considered the rival submissions. In the present case the only reason weighing with the Commissioner to deny registration u/s 12AA of the Act is the absence of any of the activities stated in the Memorandum of Association. The Commissioner has not doubted that the objects of the assessee Trust as contained in the Memorandum of Association are charitable in nature. Section 12AA of the Act prescribes the procedure for registration, whereby it is required that the Commissioner shall satisfy himself about the objects of the Trust and the genuineness of its activities in order to grant registration. Quite clearly, the phraseology of section 12AA of the Act which lays down the procedure for registration does not contain any prohibition that a Trust or Institution cannot seek registration unless it starts its activities as manifested its objects clause. Therefore, the objection of the Commissioner, in our considered opinion, is quite extraneous to the statutory provisions contained in Section 12AA(1) of the Act, which govern the procedure of registration. The Pune Bench of the Tribunal in the case of Advik Foundation (supra) has considered a similar situation and following the ratio of the judgement of the Hon'ble Delhi High Court in the case of Foundation of Ophthalmic & Optometry Research Education Centre (supra) and that of the Hon'ble Gujarat High Court in the case of Kutchi Dasa Oswal Moto Pariwar Ambama Trust (supra) negated the stand of the Revenue denying registration merely due to the absence of any activity by the Trust. Following the said precedent, which has been rendered under identical circumstances, we are 4 ITA No.716/PN/2013 inclined to disagree with the stand of the Commissioner contained in the impugned order. We hold so.
7. In so far as the reliance placed by the Ld. CIT-DR on the judgement of the Hon'ble Kerala High Court in the case of Self Employers Services Society (supra) and that of the Hon'ble Punjab & Haryana High Court in the case of Amar Shiv Mandir Trust (Regd.) (supra) are concerned, ostensibly the views expressed therein are in variance to the views expressed by the Hon'ble Delhi High Court in the case of Foundation of Ophthalmic & Optometry Research Education Centre (supra) and also by the Hon'ble Karnataka High Court in the case of DIT (Exemptions) vs. Meenakshi Amma Endowment Trust, (2013) 354 ITR 219 (Karn). In-fact, the Hon'ble Delhi High Court while ruling in favour of the assessee has considered the contrary views expressed by the Hon'ble Punjab & Haryana High Court in the case of Amar Shiv Mandir Trust (Regd.) (supra) and also by the Hon'ble Kerala High Court in the case of Self Employers Services Society (supra), and, thereafter it has adopted the view expressed by the Hon'ble Karnataka High Court in the case of Meenakshi Amma Endowment Trust (supra) in preference to the view of the Hon'ble Punjab & Haryana High Court and the Hon'ble Kerala High Court. The said judgement of the Hon'ble Delhi High Court has been followed by the Pune Bench of the Tribunal in the case of Advik Foundation (supra). Be that as it may, since there are contrary views of different High Court and in the absence of any judgement of the Hon'ble Jurisdictional High Court, we deem it fit and proper to follow a view which is favourable to the assessee following the parity of reasoning laid down by the Hon'ble Supreme Court in the case of CIT vs. Vegetable Products Ltd., 88 ITR 192 (SC).
8. In view of the aforesaid discussion, following the precedent by way of the decision of our co-ordinate Bench of the Tribunal in the case of Advik Foundation (supra), we hold that the Commissioner was not justified in 5 ITA No.716/PN/2013 denying registration u/s 12AA of the Act to the assessee merely on account of non-starting of the activities as manifested by the objects of the Memorandum of Association of assessee. Accordingly, noticing that the objects as per the Memorandum of Association of the assessee have been found to be otherwise charitable by the Commissioner, we set-aside the impugned order and direct him to grant registration to the assessee u/s 12AA of the Act in terms of its application dated 22.08.2012.
9. In the result, the appeal of the assessee is allowed.
Order pronounced in the open Court on 21 st April, 2014.
Sd/- Sd/-
(R.S. PADVEKAR) (G.S. PANNU)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Pune, Dated: 21 st April, 2014.
Sujeet
Copy of the order is forwarded to: -
1) The Assessee;
2) The Department;
3) The CIT-I, Pune;
4) The DR "B" Bench, I.T.A.T., Pune;
5) Guard File.
By Order
//True Copy//
Sr. Private Secretary
I.T.A.T., Pune