IN THE ITAT AMRITSAR BENCH (THIRD MEMBER)
Ramanujam Spiritual Public Charitable Trust
v/s.
Commissioner of Income-tax-I, Amritsar
IT Appeal No. 378 (Asr.) of 2009
June 8, 2012
ORDER
H.S. Sidhu, Judicial Member
The assessee has filed the present appeal against the order dated July, 2009 passed by the learned Commissioner of Income-tax-I, Amritsar under section 80G(5) read with section 254 of the Income-tax Act, 1961 (hereinafter referred as ‘the Act’).
2. The facts narrated by the learned CIT-I, Amritsar are that the assessee-trust filed its application dated 26-3-2008 for renewal of approval under section 80G(5) of the Act, which was rejected by the learned CIT-I, Amritsar vide his order dated 26-8-2008 on the ground that one of the objects No.4 made it absolutely clear that the trust has been established for a particular religious purpose for the followers of the deity who have to be only “Hindus” because the said object makes it clear that if any trustee renounces the Hindu religion or transfers of any portion of trust property in violation of the conditions herein before recited, then “he or she shall for the purpose of this deed be considered to be dead and the person next after him or her entitled to succeed as Trustee, shall succeed”. The learned CIT-I, Amritsar also observed in the order dated 26-8-2008 that before rejecting the trust’s application, its reply along with a paper written on 20-12-1993 but signed on 1-8-2008 stated to be corrigendum to the trust deed were duly considered and the same are an afterthought and self-serving document, which has no legal binding.
2.1 The assessee challenged the order dated 26-8-2008 before the Tribunal, who vide its order dated 19-12-2008 passed in I.T.A. No. 512(ASR)/2008 remitted back the issue to the Commissioner of Income-tax-I, Amritsar to decide afresh in accordance with law after taking into consideration the corrigendum filed by the assessee and the effect thereof on the objects of the Trust for the purpose of renewal of approval under section 80G(5) of the Act.
2.2 In compliance of the same, the learned CIT-I, Amritsar issued notice to the assessee asking the assessee-trust to produce books of account for the assessment years 2007-08, 2008-09 and 1-4-2009 onwards, minute book and details of other charitable activities done in addition to construction of temple along with original copy of corrigendum.
2.3 In compliance of the same, the authorized representative of the assessee appeared and produced cash book and other information required by the learned CIT-I, Amritsar and also submitted its reply dated 22-3-2009 mainly stated that on 1-8-2008 as per minute book and the corrigendum of the Trust Deed dated 1-8-2008, the objects of the trust was changed and one of the new object was construction of the Dharamshala and the trust has started construction of Dharamshala right thereafter on land measuring 10000 sq. ft. already with the trust and the donations received after 1-8-2008 have been spent on the construction of Dharamshala. The assessee further stated in its reply dated 24-3-2009 that since the trust is doing charitable work w.e.f. 1-8-2008 as per the provisions of law of the land and the judgment pronounced by the Hon’ble Supreme Court of India, the assessee requested that the renewal of registration u/s.80G of the Act may kindly be granted.
2.4 After going through the reply filed by the assessee, the learned CIT-I, Amritsar is of the view that the corrigendum dated 1-8-2008 is an attempt to delete the clause 4 of the original Trust Deed. Needless to mention that original Trust Deed contained provision for spending the income or assets of the Trust for purposes other than charitable. The learned CIT-I, Amritsar in the impugned order specifically held that the Trust was expressly established for the benefit of a particular religious community. These are prohibited by the conditions laid down in clauses (iii) and (iv) of section 80G (5) of the Act. The corrigendum aforesaid brought into existence virtually a new trust which has totally changed the complexion and objectives of the Trust, In fact, a new trust should have been constituted which the assessee has not done to reap the benefits of section 80G retrospectively. The learned CIT-I, Amritsar also held in the impugned order that the corrigendum submitted later on is an afterthought and a self serving document submitted especially when put to question by this office and it is just to enjoy the benefits under section 80G of the Act retrospectively. The learned CIT-I, Amritsar also supported his view by the decision of the Hon’ble Allahabad High Court in the case of Shervani Charitable Trust v. CIT [1968] 69 ITR 750 wherein it is held that the trustees do not have any power to override the Trust Deed through a resolution by virtue of which the non-charitable portion of the income could also be applied to charitable purposes.
2.5 Keeping in view the aforesaid finding, the learned CIT-I, Amritsar finally rejected the application filed by the assessee by passing the impugned order in the month of July, 2009.
3. Aggrieved by the same, the assessee has filed the present appeal.
4. The learned counsel for the assessee stated that the learned CIT-I, Amritsar has passed an illegal order, which is bad in law and liable to be cancelled because the learned CIT-I, Amritsar has wrongly treated the corrigendum to the original Trust Deed is nothing but an afterthought and not treating in letter and spirit the judgment of ITAT, Amritsar Bench dated 19-12-2008 passed in the case of the assessee while challenging the order dated 27-8-2008 passed by the same CIT-I, Amritsar in which he has rejected the assessee’s application for the renewal of approval under section 80G(5) of the Act by giving exactly similar finding as he has given in the impugned order. He further stated that the learned CIT-I, Amritsar has not appreciated the order dated 19-12-2008 and wrongly rejected the application of the assessee, which is contrary to the decision of the jurisdictional Bench passed in the case of Maj. Gen. (Retd.) Kanwarjit Singh v. Asstt. CIT, [2006] 10 SOT 19 (ASR) (URO), which he has attached at page 12 of the paper book. He stated that in the aforesaid case, this Bench has held that the decision of the higher judicial authority must be followed and practice of treating the precedent as absolutely binding is necessary to secure certainty of law. But in the present case, the learned CIT-I, Amritsar has not followed the order dated 19-12-2008 passed by the I.T.A.T., Amritsar and passed the impugned order, as he has already passed on 27-8-2008 while rejecting the assessee’s application for renewal of approval under section 80G(5) of the Act. He has also filed a copy of supplementary deed of Ramanujam Spiritual Public Charitable Trust and copy of affidavit of Shri Ravi Sharma S/o Shri Bishan Dass, Accountant of the Trust. He has also filed a paper book containing pages 1 to 27 in which he has attached a copy of Tribunal’s order dated 19-12-2008 at pages 1 to 6, copy of CIT’s order dated 27-8-2008 at pages 7 to 10, copy of letter dated 23-3-2009 at page 11, copy of letter dated 7-4-2009 at page 12, copy of cash book for period ending 31-3-2008 at page 13, copy of ledger for the period ending 31-3-2008 at page 14, copy of cash book from 1-4-2009 onwards (1-4-2009 to 30-5-2009) at page 15, copy of ledger from 1-4-2009 onwards at pages 16 to 17, copy of balance sheet as on 31-3-2008 at page 18, copy of original trust deed dated 20-12-1993 at pages 19 to 24, copy of corrigendum dated 1-8-2008 at page 25 and copy of Minute book dated 1-8-2008 at pages 26 to 27 of the paper book. He has also filed Paper Book No.2 containing pages 1 to 17 in which he has attached brief facts at page 1, Notes on Public Charitable Trust at pages 2 to 9, section dealing with donation u/s.80G at pages 10 to 11 and copy of judgment of ITAT, Amritsar Bench, Amritsar at pages 12 to 17 of the Paper Book No.2.
4.1 He further argued that the learned CIT-I, Amritsar has already granted many times exemption under section 80G of the Act to the assessee trust on the unamended deed of the Trust and lastly granted the same exemption on 14-9-2005 w.e.f. 1-4-2005 to 31-3-2008 but he has wrongly rejected the exemption under section 80G of the Act to the assessee without any valid reason. He further stated that when the ITAT at page 5, para 9 of the order dated 19-12-2008 has already held that there is nothing preventing the assessee from filing such corrigendum and thereby amending its objects. He further stated that the Bench also held that the learned CIT-I, Amritsar erroneously rejected such corrigendum as merely an afterthought and not having any binding force and this cannot be sustained in the absence of any provision of law prohibiting the assessee from amending the original Trust Deed by way of corrigendum. The learned counsel for the assessee stated that the learned CIT-I, Amritsar has not followed the order of the jurisdictional I.T.A.T., which is violation of judicial discipline, therefore, the impugned order deserves to be cancelled and the direction may be issued to the learned CIT-I, Amritsar to grant exemption under section 80G of the Act as requested by the assessee-trust.
5. On the contrary, the learned D.R. relied upon the impugned order passed by the learned CIT-I, Amritsar, specifically the finding given at page No. 5 of the impugned order. No other argument has been advanced by the learned D.R.
6. We have heard both the parties and perused the relevant material available with us. We have also thoroughly gone through the supplementary Deed of the Trust in which the assessee had rectified the Trust Deed dated 20-12-1993 and decided to change the objects of the Trust by passing a resolution on 1-8-2008 and also corrigendum written on 1-8-2008 w.e.f. 1-8-2008. An affidavit filed by Shri Ravi Sharma, Accountant of the Trust along with the order of the ITAT dated 19-12-2008 and various other documentary evidence filed by the assessee in the paper books. It is an admitted fact that the assessee has made a deed of public charitable trust on 20-12-1993, which is registered one. It is also admitted that the assessee has made one supplementary deed stating therein that the objects stated in the Trust Deed dated 20-12-1993 is not possible to continue in future and it has been decided to change the objects. Accordingly, a resolution was passed and recorded in the minute book on 1-8-2008 and also corrigendum was written on 1-8-2008 w.e.f. 1-8-2008 wherein it has been decided to involve this trust in the acts of service to the society. The assessee has also added additional four objects which include construction of Dharamshalas, Community Halls, setting up and running of charitable hospital and others. In the Supplementary Deed, the assessee also deleted right from the beginning clause 4 of the original Trust Deed dated 20-12-1993. For the sake of convenience, clause 4 of the original Trust Deed dated 20-12-1993 and the relevant portion of the Supplementary Deed are reproduced as under:-
“Clause 4 of the original Trust Deed dated 20-12-1993:-
4. If any Trustee renounces the Hindu religion or transfers any portion of the Trust Properties in violation of the condition hereinbefore recited, then he or she shall for the purpose of this deed be considered to be deed and the person next after him or her entitled to succeed as Trustee, shall succeed. The Trustees for the time being shall hold the Trust Properties and mange the same to the best advantage of the Trust.”
“Relevant portion of the Supplementary Deed:-
Whereas it has been felt that the object stated in the trust deed dated 20-12-1993 is not possible to continue in future and it has been decided to change the objects accordingly a resolution was passed and recorded in the minute book on 1-8-2008 and also corrigendum was written on 1-8-2008 w.e.f. 1-8-2008 wherein it has been decided to involve this trust in the acts of service to the society which includes-
(i) Construction of Dharamshalas, Community Halls.
(ii) Setting up and running of charitable hospital.
(iii) Helping the deserving parents to solemnize the marriage of their daughters.
(iv) Advancement of any other objectives of general public utility, not involving the carrying of any activity for profits, as the law may regard as public charitable purposes.
That the clause No.4 of the original Trust deed dated 20th December, 1993 stands deleted right from beginning as if it was never been the part of the trust deed.
This supplementary deed is executed on 20-4-2010 w.e.f. from 1-8-2008 is signed by the trustees in the presence of the following witnesses. Self drat CB Acharya.
