Indian Kanoon - Search engine for Indian Law

Income Tax Appellate Tribunal - Bangalore

Gautam Budh Vidya Sagar Charitable ... vs Assessee on 29 June, 2009

              IN THE INCOME TAX APPELLATE TRIBUNAL
                       "B" BENCH : BANGALORE


       BEFORE SHRI GEORGE GEORGE K., JUDICIAL MEMBER
     AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER


                          ITA No.863/Bang/2009
                          Assessment year : N.A.


      Gautam Budh Vidya Sagar
      Charitable Trust,
      No.30, Cauvery Nagar,
      Near Swayam Prabha Kalyana
      Mantap,
      Kamakshi Palya,
      Bangalore - 560 079.                :                APPELLANT

        Vs.

      The Director of
      Income-tax (Exemptions),
      Bangalore.                          :              RESPONDENT


               Appellant by          :   Shri Muralidharan
               Respondent by         :   Smt. Swati S. Patil


                                  ORDER

Per A. Mohan Alankamony, Accountant Member

This appeal is filed by the assessee directed against the order of the DIT(Exemptions), Bangalore dated 29.06.2009 rejecting the application for registration u/s. 12AA of the Income-tax Act, 1961.

2. The assessee has raised the following grounds of appeal :

"1. The order of the Learned Director of Income Tax (Exemptions) is opposed to Law and Facts of the case.

2. The Learned Director of Income Tax (Exemptions) has erred in not considering the facts submitted before him.

3. The Learned Director of Income Tax (Exemptions) has erred in rejecting the application on the ground that no records have been maintained for the courses undertaken by beneficiaries where as there is no requirement u/s 11, 12 and 13 of the Income Tax Act 1961 to maintain any such records in this respect.

4. The Learned Director of Income Tax (Exemptions) has erred in presuming that the trust management under the sole trustee will not be democratic where as neither the provisions of sections 11, 12, 13 of the Income Tax Act 1961 nor the Indian trust Act mention that the trust cannot carry on its objectives with a single trustee. Where as the Learned Director of Income Tax (Exemptions) has not looked into the clause (5) of the trust deed where the powers have been given to the founder trustee to co-opt up to 5 trustees.

5. The Learned Director of Income Tax (Exemptions) has erred in not looking into the facts of the trust that all the conditions mentioned in Sec 12A for granting registration have been complied with.

6. With these and such other grounds that may be urged at the time of hearing the appellant prays for the grant of registration sought for."

3. The assessee is a charitable trust whose main object is to provide help to the needy people in the field of Education, Rural Upliftment and Environmental protection and other objects as mentioned in the trust deed. The assessee submitted an application in Form No.10A for grant of registration u/s 12AA of the Income Tax Act 1961 on 18.12.2008. Certain details were called for and the assessee filed the same on 23.03.2009. The ld. DIT(Exemptions) rejected the application for registration u/s. 12AA of the Act by holding as under:

Page 3 of 6

" The trust is registered since 01.03.2008. No substantial activity has been reported. The trust has been floated by Sri Vinod Kumar Dingra who is a businessmen and sole trustee of the trust. There has been two instances of scholarships awarded which would not suffice to form a satisfactory opinion about a charitable activity of the trust. No evidence has been provided about how the beneficiaries are selected so as to adhere to the criteria of benefits of the charity enuring for the general public. No records have been maintained for course undertaken by beneficiaries, reason for scholarship etc. The management of the trust is not democractic and has lies the hands of the sole trustee who is a businessman.

Hence, in the above said circumstances, it is not possible to verify the genuineness of the trust, as also of its objects and activities. Accordingly, the application for Registration u/s 12A of the Income-tax Act, 1961 has to be rejected.

Accordingly, the application for Registration u/s 12A is hereby rejected."

Aggrieved by the order of the ld. DIT(Exemptions), the assessee trust is in appeal before the Tribunal.

4. The ld. AR submitted that the appellant trust's main object is to provide help to the needy people in the field of education, rural upliftment, environmental protection etc. The trust is in the budding stage and have commenced its activities with its limited resources. The assessee trust had provided the details of the donation made during the period and submitted explanations called for. However, without considering all these facts and without providing opportunity to clarify the inhibitions construed by the ld. DIT(E), the application was rejected. Ld. AR pleaded that the assessee trust deserves to obtain registration u/s. 12AA(1)(b)(ii) of the Act or at the most the case may be remitted back to the ld. DIT(E) for consideration and the assessee shall co-operate and provide any clarification sought for. ITA No.863/Bang/ 09 Page 4 of 6

5. Ld. DR supported the findings of the ld. DIT(E) and opposed to the plea of the ld. AR for remitting back the case to the ld. DIT(E) as the ld. DIT(E) had deliberated the issue in detail and had passed a just order as per law and facts.

6. We have heard the rival submissions and carefully perused the records presented before us. We have also examined the paperbook submitted by the ld. AR which contain the following details:

(1) Letter from office of DIT(E) dated 9.3.09. (2) Letter from the assessee's AR providing information called for.

(3) Income & Expenditure account for year ending 31.3.09. (4) Disbursement details of scholarships for the F.Y. 2008-09.

(5) Trust deed.

7. After examining the trust deed submitted by the ld. AR, we are of the firm opinion that all the objects of the trust falls within the ambit of charity as defined in section 2(15) of the Act. The objects of the trust are extracted hereinbelow for reference:

(a) To start, run adopt and support industrial training institute schools, educational institutions and research centers etc., and take all steps necessary for further the cause of education.

(b) To start, run and adopt support project in semi urban/rural areas or slums for the general uplift of society like water conservation/recirculation, waste management, rain water harvesting, solid waste management, carbon food print reductions, tree plantations, etc. To take all necessary steps for furthering the cause in these fields and their awareness.

(c) To render financial help to any educational, medical or charitable Organizations, which the Trustee in his opinion think, are in need of help:

(d) To render financial help to institution for poor and disable persons, who in his opinion require and deserve such help.

(e) To provide for payment of scholarships to students.

(f) To provide for payment of school or college fees, Boarding and/or Lodging charges and purchases of educational books or stationary for Students.

(g) To provide general medical relief by subscribing to or establishing, if funds so permit, charitable dispensaries hospitals, clinics or to give Medical relief to poor.

(h) To give monetary aid or otherwise provide relief for flood or famine or any other natural calamities like earthquake and cyclones.

(i) To provide for educational and maintenances of poor widows.

(j) To open orphanage homes or assists in the conduct of any institutions for protection of orphans.

(k) To provide for the constructions of buildings for the accommodation of and Conduct schools, colleges, research institutions, medical clinics and dispensaries.

(l) To feed poor and disabled persons or for maintenance of beggar homes or institutions, for beggars and disabled persons.

(m) To do such act of public charity not involving the carrying on of an activity for profit, as may be deemed fit and necessary by the Trustee.

Further from the conduct of the assessee as evident from the paperbook submitted, the assessee trust had made an attempt to pursue some charitable activities to achieve the objects of the trusts with its limited resources. Moreover the trust has not undertaken any business/commercial activity. This is apparent from the statement of account furnished by the assessee trust forming part of the paperbook.

8. The Act does not envisage any condition that the charitable trust should have more than one trustee. Therefore, this ground raised by the ITA No.863/Bang/ 09 Page 6 of 6 revenue is not good in law for rejection of the application of the assessee. The ld. DIT(E) had issued a letter dated 9.3.09 seeking for a list of documents and information, for which the assessee has submitted a detailed reply furnishing the required information. However, the ld. DIT(E) has proceeded to reject the application of the assessee without granting proper opportunity to the assessee of being heard. On perusing the objects and affairs of the trust, we are of the firm opinion that this is a fit case for grant of registration under section 12AA(1)(b)(ii) of the Act and we hold accordingly.

9. In the result, the appeal of the assessee is allowed.

Pronounced in the open court on this 22nd day of January, 2010.

              Sd/-                                      Sd/-

( GEORGE GEORGE K. )                     (A. MOHAN ALANKAMONY )
     Judicial Member                            Accountant Member

Bangalore,
Dated, the 22nd January, 2010.

Ds/-

Copy to:
1.   Appellant 2. Respondent 3. CIT      4. CIT(A)
5.   DR, ITAT, Bangalore. 6. Guard file (1+1)


                                                By order



                                          Assistant Registrar
                                           ITAT, Bangalore.