Income Tax Appellate Tribunal - Chennai
Founder Ramachandra Iyer Trust, ... vs Assessee on 30 September, 2010
IN THE INCOME TAX APPELLATE TRIBUNAL
CHENNAI BENCH 'D'
BEFORE DR.O.K.NARAYANAN, VICE PRESIDENT AND
SHRI HARI OM MARATHA, JUDICIAL MEMBER
I.T.A. No. 2143 & 2144/Mds/2010
Founder Ramachandra Iyer The Director of Income Tax,
Trust Vs [Exemptions]
No. 5, Main Road Chennai-34
Dr. Subbaraya Nagar
Kodambakkam
Chennai 600 024.
(Appellant) (Respondent)
Assessee by Smt. Pushya Sittaraman
Department by : Shri Anirudh Rai
ORDER
PER HARI OM MARATHA, JUDICIAL MEMBER:
These two appeals filed by the assessee-trust are directed against the order of the Commissioner of Income-tax (Exemptions) at Chennai dated 30.09.2010.
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ITA No. 2143 & 2144/Mds/2010
2. Briefly stated the facts of the case are that the assessee trust applied for registration u/s 12AA of the Income-tax Act, 1961 [in short, the Act] on 15.3.2010 in Form 10A and in Form No. 10% for grant of approval u/s 80G of the Act. The trust was created vide a trust deed, dated 05.03.2010. After verifying the records, the DIT[Exemptions] found that the trust has not done any effective activity so far, so, it was not possible to satisfy whether the objects of the trust are carried in the manner they are incorporated in the deed or not. In these circumstances, he observed that it was premature case for registration of the trust u/s 12AA of the Act, hence, he rejected the application by observing that the trust can apply after it had done significant activities. Aggrieved, the trust has filed these appeals.
3. We have heard both the sides, vis-a-vis the obtaining facts and the circumstances of the case. It was argued by the ld. A.R. that after the trust was constituted on 05.3.2010 application in Form 10-A was filed on 15.3.10 u/s 12AA, application in Form No. 10A and for grant of approval u/s 80G of the Act. The DIT [Exemptions], through his letter dated 06.8.2010 sought certain clarifications and the trust immediately furnished requisite :- 3 -:
ITA No. 2143 & 2144/Mds/2010 additional information on 17.8.2010. Still the DIT[Exemptions] rejected the application u/s 12AA of the Act vide his order dated 30.9.2010. She argued that when the trust was having charitable objects and the concerned authority has not found anything contrary which can bring the objects of the trust out of the purview of section 12AA of the Act, it is not justified to seek information regarding application of either the funds or regarding pursuing its objects within a short span of time.
4. On the other hand, the ld. D.R. argued that from the inception of section 12AA of the Act, the DIT[Exemptions] or Commissioner of Income-tax [Appeals], on receipt of an application for registration of trust filed under clause (a) of section 12AA of the Act may call for such documents or information from the trust as he thinks necessary for satisfying himself about the genuineness of the activities of the trust and may also make such enquiries as he may deem necessary in this behalf. It is only after satisfying himself about the objects of the trust and the genuineness of its activities he shall pass order in writing registering the trust and shall, if he is not satisfied, pass an order in writing refusing registration.
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ITA No. 2143 & 2144/Mds/2010
5. After considering the rival submissions and going through the objects of the trust, we do not portray that the CIT/DIT[Exemptions] has no power to call for such documents or information from the trust as he thinks necessary in order to satisfy himself about the genuineness of the activities of the trust and also to make such enquiries as he deems necessary in this behalf. But such satisfaction has to be objective and not subjective in nature. From the records available before us, it is found that the trust was constituted on 5.3.2010 and it filed application on 15.3.10 in Form No. 10A for grant of registration u/s 12AA of the Act. Undeniably, during this short span, the assessee has paid ` 1,05,958/- towards educational assistance. The objects of the trust as per deed, were educational, amelioration of poverty and certain others.
6. The circumspection of the objects clearly suggest that they are charitable in nature. The ld. DIT [Exemptions] has also not even whispered that these objects are not charitable in nature. Therefore, the objects of the trust are definitely charitable in nature. In so far as genuinity of the activities of :- 5 -:
ITA No. 2143 & 2144/Mds/2010 the trust is concerned, it has paid ` 1,05,958/- towards educational assistance, which activity is definitely a charitable one and in consonance with the objects of the trust. The appellate authority has mentioned in his order that this application is premature, but we are afraid that this is not a correct observation because there is no time for applying for registration is provided in the Act, rather filing of an application immediately after the trust comes into operation is a pointer towards genuinity of the trust and intention of the trustees. There is section 12AA(3) under which the registration once granted can be withdrawn if the trust is found to not carrying out the activities in accordance of its objects or if it found to be non genuine. So, in our considered opinion, ld. DIT[Exemptions] has wrongly refused to grant registration to the trust. Hence we order that registration u/s 12AA be granted to the trust immediately from the date of application. We may observe that vide order appealed against the authority refused to approve the trust u/s 80G of the Act but the Trust has not taken specific ground before us in this regard. Nevertheless, we may observe :- 6 -:
ITA No. 2143 & 2144/Mds/2010 since the approval was refused because he had denied registration, so it can now be considered afresh.
7. In the result, both the appeals filed by the assessee are allowed.
Order pronounced in the open court at the time of hearing on Tuesday, the 10th day of May, 2011 at Chennai.
Sd/- Sd/-
( DR.O.K.NARAYANAN) (HARI OM MARATHA)
Vice-President Judicial Member
Chennai : 10th May, 2011
Vl.
Copy to:
1. Appellant
2. Respondent
3. CIT(A)
4. CIT
5. DR