Surat Maisuriya Bhatia Nayi Panch Vs CIT (ITAT Surat)
ITAT Surat held that the assessee trust is very old trust, and because of slight difference in the name of assessee, in various documents should not be resulted into disentitlement from getting registered under section 12AB of the Income Tax Act.
Facts- The assessee-trusts has preferred the present appeal against the orders passed by the Commissioner of Income Tax (Exemption), [CIT(E)], wherein, CIT(E) has rejected the application filed by assessees in Form No. 10AB for registration under registration 12AB of the Act, on account of mismatch of assessee’s trust name, and on account of genuineness of activities of the assessee`s trusts.
Conclusion- Held that the assessee trust is very old trust, and because of slight difference in the name of assessee, in various documents should not be resulted into disentitlement from getting registered under section 12AB of the Act.
Before us, assesse has submitted documents and details in the paper book, which contains trust deed, balance sheets, bank statements, PAN and other documents related to income tax proceedings. We direct the Ld. CIT(E) to go through the relevant documents and evidences to verify the objects of the trust and activities of the trust and pass the order in accordance with law. The assessee is also directed to submit before the Ld. CIT(E), the documents and evidences, as and when called by ld CIT(E).
FULL TEXT OF THE ORDER OF ITAT SURAT
1. Captioned six appeals filed by different assessee-trusts, are directed against the separate orders passed by the Learned Commissioner of Income Tax (Exemption), [in short ‘the Ld. CIT(E)’], wherein the Ld. CIT(E) has rejected the application filed by assessees in Form No. 10AB for registration under registration 12AB of the Act, on account of mismatch of assessee’s trust name, and on account of genuineness of activities of the assessee`s trusts.
2. Since, the issues involved in all these appeals are common and identical; therefore, these appeals have been clubbed and heard together and are being disposed of by this consolidated order for the sake of convenience and brevity. The facts as well as the grounds narrated in assessee’s appeal, in ITA No.213/SRT/2020 (Surat Maisuriya Bhatia Nayi Panch), have been taken into consideration for deciding these appeal en masse.
3. The grounds of appeal raised by the assessee in lead case (ITA No. 213/SRT/2023, are as follows:
“(1) On the facts and circumstances and in law, the learned Commissioner of Income-tax (Exemption) was not justified in rejecting application u/s 12A, particularly when the appellant complied with all the details as also rendered evidence of activities undertaken in consonance with the objects.
(2) The learned Commissioner of Income-tax (Exemption) was driven by extraneous considerations while rejecting application.
(3) The learned Commissioner of Income-tax (Exemption) ought to have taken a judicious and liberal view rather than a hyper technical view.
(4) The appellant craves leave to add, alter or vary any of the grounds of appeal.”
4. Brief facts of the issue in dispute are stated as under.The assesseetrust filed an application for registration of the trust u/s 12AB of the Income Tax Act, 1961, on 26.09.2022, in Form No. 10AB under Rule 17A of the I.T. Rule, 1962. Therefore, a notice was issued to the assessee on 10.12.2022 with a request to furnish detailed note on the activities actually carried out by the trust as well as certain details/documents as mentioned in the notice of ld CIT(E). The ld CIT(E) noted that inquiry about the actual activities of the trust was necessary in view of the mandatory provisions of the procedure for registration u/s 12AB of the Income Tax Act, 1961. However, in response to the said notice, the assessee has furnished part detail/document, before ld CIT(E). Therefore, one more opportunity was given to the assessee by issuing another notice on 02/01/2023 to furnish pending details. In response to the same, the assessee has furnished details/documents. From perusal of details and documents, available on records, it was observed by Ld. CIT(E) that the name of the applicant/assessee as per PAN is “SURAT MAISURIYA BHATIA NAYI PANCH”, whereas in the copy submitted of Trust deed, in Gujarati the name appearing therein is “MASURIYA BHATIA NAYI PANCH”. Similarly, the certificate of Registration with the Charity Commissioner the name has been mentioned as “MAHESURIYA BHATIA NAYI PANCH SURAT”. There is obvious mismatch in name, as per PAN database vis-a-vis Certificate of Registration and other documents, as detailed above and therefore it was incumbent on the part of the applicant/assessee to submit the reasons and explanation for the same. However, the applicant/assessee has not submitted any explanation in this regard.
5. The Ld. CIT(E) also noted that no verification of the objects as per the trust deed with the activities could be carried out. Thus, the genuineness of the activities does not get established, due to lack of details/explanations submitted by the applicant/assessee. Then ld CIT(E) narrated the provisions of section 1 2AB of the Act, which makes, it very clear that before granting registration under this section, the Commissioner has to satisfy himself about the genuineness of the activities of the trust or institution and also he has to verify that these activities are in consonance with the objects of the trust or institution. Further, he has to ensure that other laws, for the purpose of achieving objects are complied with. For this, ld CIT(E ) relied on the judgment delivered by the Hon’ble Supreme Court, in the case of Commissioner of Income-tax, Ujjain Vs Dawoodi Bohara Jam at Civil Appeal No. 2492 of 2014, wherein the Hon’ble Apex Court while adjudicating similar provisions u/s 12AA of the Act has held as under:
“Section 12AA lays down the procedure to be followed by the Commissioner for grant or refusal of application for registration made under Section 12A. According to procedure so laid down, the Commissioner shall call for documents and information and conduct an enquiry to satisfy himself of the genuineness of the trust and upon reaching satisfaction of the charitable or religious nature of the objects and the authenticity of the activities of the trust, he would grant the registration. If he is not satisfied of the aforesaid, the request made in the application may be declined.”
6. The Ld. CIT(E) also noted that while adjudicating similar provisions u/s 10(23C) of the Act, the Hon’ble Supreme Court in the case of M/s New Noble Educational Society in Civil Appeal No. 3795 of 2014 has held as under.
“While considering applications for approval under Section 10(23C), the Commissioner or the concerned authority as the case may be under the second proviso is not bound to examine only the objects of the institution, To ascertain the genuineness of the institution and the manner of its functioning, the Commissioner or other authority is free to call for the audited accounts or other such documents for recording satisfaction where the society, trust or institution genuinely seeks to achieve the objects which it professes. The observations made in American Hotel (supra) suggest that the Commissioner could not call for the records and that the examination of such accounts would be at the stage of assessment. Whilst that reasoning undoubtedly applies to newly set up charities, trusts etc. the proviso under Section 10(23C) is not confined to newly set up trusts – it also existing ones. The Commissioner or other authority is not in any manner constrained from examining accounts and other related documents to see the pattern of income and expenditure.”
7. Considering above facts and precedents, the Ld. CIT(E) noted that the applicant/assessee has failed to file documentary evidences to enable to satisfy about the genuineness of its activities and to verify these activities, whether these activities, are in consonance with its objects. Looking to the above facts, the Ld. CIT(E) was unable to arrive at the satisfaction of the genuineness of the activities. Hence, application filed in Form No. 1 0AB for the registration u/s 1 2AB of the IT. Act, 1961, was rejected by Ld. CIT(E).
8. Aggrieved by the order of the Ld. CIT(E), the assessee is in appeal before us.
9. The Ld. Counsel for the assessee submitted a chart which explains the mismatch in the name of the assessee-trust, which is reproduced below:
