Income Tax Appellate Tribunal - Amritsar
Malli Ram Charitable Trust vs Commissioner Of Income-Tax on 18 December, 2002
Equivalent citations: [2003]260ITR118(ASR)
ORDER
1. This is an appeal by the assessee and is directed against the order of the Commissioner of Income-tax-I, Amritsar, dated July 30, 2002, passed under Section 12AA of the Income-tax Act, 1961.
2. In the instant case, the assessee has raised the following grounds :
"1. The Commissioner of Income-tax-I, Amritsar, wrongly refused to register the trust under Section 12AA, when the assessee has completed all the formalities of Section 12A.
2. That it is a covered matter--Fifth Generation Education Society v. CIT [1990] 185 ITR 634 (All).
3. That the registration may kindly be allowed.
4. That the order is bad in law and on facts."
3. In the present case, the assessee had preferred an application under Section 12A(a) of the Income-tax Act, 1961, in the prescribed pro forma, i.e., Form No. 10A, on January 15, 2002. The learned Commissioner of Income-tax-I, observed that the application preferred by the assessee was defective inasmuch as the trust deed filed with the application was neither registered with the Registrar of Societies nor it was registered with the Registrar of Documents. The learned Commissioner of Income-tax required the assessee to remove the defects. In response to the above, the assessee submitted that the registration of document was not necessary and further that the trust fulfilled all the requisites of registration. The learned Commissioner of Income-tax, observed that the defects pointed out have not been removed, and therefore, he rejected the registration application of the assessee. The learned Commissioner of Income-tax concluded that he was not satisfied about the objects of the trust or institution and the genuineness of its activities.
4. We have heard the learned representatives of both the parties at length and have also carefully gone through the order of the learned Commissioner of Income-tax passed under Section 12AA of the Income-tax Act, 1961. The assessee has also filed a copy of the trust deed dated December 26, 2001. The objects of the trust are as under :
"(a) To provide any medical relief by opening hospitals, nursing homes, dispensaries or giving donations to such institutions and for research work and to give scholarships refundable or non-refundable for imparting medical education of all systems of medicine.
(b) To provide education, liberal, scientific or technical, computer, etc., and for that purpose to build school, start institution and to provide stipends, scholarship, refundable or non-refundable, for the poor people.
(c) To purchase any land and/or building to construct any building on any free hold or lease hold land, anywhere in India for dharamsala or resting places for the benefits of the poor people and furnishing the same for that purposes.
(d) To provide for any other charitable purpose or for feeding of poor, blind, dumb, orphans, widows as the trustees shall in their absolute discretion think fit from time to time.
(e) To contribute or donate to children's home run by any charitable institutions.
(f) To open and/or to run, maintain homes for the elders, widows, orphanages, etc.
(g) The trustees may set apart or accumulate the whole or any part of its income, including donations received from the public to be used for carrying out the objects of the trust at a later date and may subsequently utilise the same for such purposes.
(h) Any donations received from the public with specific directions that it shall form part of the corpus of the trust shall not be spent by the trustees, for any other purpose and shall be credited to the special trust fund account as per donor's directions.
(i) The trustees may purchase or acquire or construct or to take on lease or otherwise any immovable property and/or to develop any existing immovable property of the trust.
(j) The trustees may sell, exchange, surrender, give mortgage, charge, pledge, device or dispose of any trust property moveable or immovable and to receive any money equivalent to their value provided that the above transfer is for carrying out the purposes and objects of the trust and is not consistent therewith.
(k) To delegate any power as they can lawfully delegate to any person and to execute such power of attorney as they may think fit for the purpose.
(1) To let any portion of any immovable property forming part of the trust fund, at such rent and for such period not exceeding five years and on such terms and conditions as they think fit and to accept surrender of any lease.
(m) To allow any investments to stand in the name of any bank, in the name of the Trust.
(n) To sell any investment for the purpose of payment of expenditure or for its change to a better investment.
(o) The trustees may appoint, dismiss and reappoint secretaries, manager, clerks, agents and other employees as are required for carrying out the purposes and objects of the trust on such terms and conditions they think fit."
5. In the context of the present case, it is necessary to discuss the conditions as to registration of trusts which have been prescribed in Section 12A of the Income-tax Act, 1961, which states as under:
"12A. The provisions of Section 11 and Section 12 shall not apply in relation to the income of any trust or institution unless the following conditions are fulfilled, namely :--
(a) the person in receipt of the income has made an application for registration of the trust or institution in the prescribed form and in the prescribed manner to the Chief Commissioner or Commissioner before the 1st day of July, 1973, or before the expiry of a period of one year from the date of the creation of the trust or the establishment of the institution, whichever is later and such trust or institution is registered under Section 12AA :
Provided that where an application for registration of the trust or institution is made after the expiry of the period aforesaid, the provisions of Sections 11 and 12 shall apply in relation to the income of such trust or institution,--
(i) from the date of the creation of the trust or the establishment of the institution if the Chief Commissioner or Commissioner is, for reasons to be recorded in writing, satisfied that the person in receipt of the income was prevented from making the application before the expiry of the period aforesaid for sufficient reasons ;
(ii) from the first day of the financial year in which the application is made, if the Chief Commissioner or Commissioner is not so satisfied ;
(b) where the total income of the trust or institution as computed under this Act without giving effect to the provisions of Section 11 and Section 12 exceeds fifty thousand rupees in any previous year, the accounts of the trust or institution for that year have been audited by an accountant as defined in the Explanation below Sub-section (2) of Section 288 and the person in receipt of the income furnishes along with the return of income for the relevant assessment year the report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed."
6. For the instant case, it is also relevant to point out the Rule 17A of the Income-tax Rules, 1962, provides as under :
"17A. An application under Clause (a) of Section 12A for registration of a charitable or religious trust or institution shall be made in duplicate in Form No.10A and shall be accompanied by the following documents, namely :--
(a) where the trust is created, or the institution is established, under an instrument, the instrument in original, together with one copy thereof, and where the trust is created, or the institution is established, otherwise than under an instrument, the document evidencing the creation of the trust or the establishment of the institution, together with one copy thereof :
Provided that if the instrument or document in original cannot conveniently be produced, it shall be open to the Chief Commissioner or Commissioner to accept a certified copy in lieu of the original.
(b) where the trust or institution has been in existence during any year or years, prior to the financial year in which the application for registration is made, two copies of the accounts of the trust or institution relating to such prior year or years (not being more than three years immediately preceding the year in which the said application is made) for which such accounts have been made up."
7. It is also noticed that Form No. 10A has been prescribed for filing the application for registration.
8. Thus, on a combined reading of the above provisions, it would be clear that the application for registration under Section 12A has to be made in Form No. 10A prescribed by Rule 17A of the Income-tax Rules, 1962, before the expiry of one year from the date of the creation of the trust or establishment of the institution whichever is later. It has to be made by the person who is in receipt of the income of the trust. It is well settled law that the learned Commissioner of Income-tax is not required to examine the application of income. All that he may examine is whether the application is made in accordance with the requirements of Section 12A read with Rule 17A of the Income-tax Rules, 1962, and whether Form No. 10A has been properly filled up. He is further required to see as to whether the objects of the trust are charitable or not. In the present case, it is not in dispute that the assessee applied in Form No. 10A within the time allowed under Section 12A read with Rule 17A of the Income-tax Rules, 1962. It is also not in dispute that the documents evidencing the creation of the trust was filed along with Form No. 10A. However, the learned Commissioner of Income-tax has not doubted the objects of the assessee's trust but the only objection of the Commissioner of Income-tax for not granting registration was that the trust deed was not registered either with the Registrar of Societies or with the Registrar of Documents.
9. In view of the clear provisions of law referred to above, we are of the considered view that for refusing registration under Section 12A of the Income-tax act, it cannot be a ground that the trust is not registered with the Registrar of Societies or with the Registrar of Documents. While taking such a view, we are fortified by the decision of the Allahabad High Court in the case of Fifth Generation Education Society v. CIT [1990] 185 ITR, 634 wherein it has been held that the learned Commissioner of Income-tax was required to see as to whether the objects of the trust were charitable or not. He is further required to see as to whether the application was made in accordance with the requirements of Section 12A read with Rule 17A of the Income-tax Rules, 1962. Furthermore, it has been held in the aforesaid case that the Commissioner of Income-tax was not required to examine the application of income. In view of the above discussions, we are of the view that the learned Commissioner of Income-tax was not justified in refusing registration to the assessee merely on the basis that the trust deed was not registered with Registrar of Societies or with the Registrar of Documents. We accordingly reverse his order and direct him to grant registration under Section 12A of the Income-tax Act, 1961.
10. In the result, the appeal of the assessee is allowed.