Commissioner Of Income Tax (Exemptions), 3Rd Floor, Kailash Heights, Lal Kothi, Tonk Road, Jaipur v. M/S Tej Karan Dandia Suraj Bai Dandia Memorial Trust, B

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH ATJAIPUR D.B. Income Tax Appeal No. 58 / 2018 Commissioner of Income Tax (exemptions), 3rd Floor, Kailash Heights, Lal Kothi, Tonk Road, Jaipur 302015) ----Appellant Versus M/s Tej Karan Dandia Suraj Bai Dandia Memorial Trust, B-18, Rajendra Marg, Bapu Nagar, Jaipur Rajasthan ----Respondent _____________________________________________________For Appellant(s) : Mr. R.B. Mathur For Respondent(s) : _____________________________________________________ HON'BLE MR. JUSTICE K.S.JHAVERI HON'BLE MR. JUSTICE VIJAY KUMAR VYASOrder 20/02/2018 By way of this appeal, the appellant has challenged thejudgment and order of the Tribunal whereby the Tribunal hasallowed the appeal of the assessee. Counsel for the appellant framed the following questions of law:- “i) Whether, on the facts and in the circumstancesof the case and in law the Hon’ble ITAT is right inallowing appeal of the assessee for statisticalpurposes by setting aside the order u/s 12AA (1)(b) of CIT(E), Jaipur? ii) Whether, on the facts and in the circumstancesof the case and in law the Hon’ble ITAT is right inholding that it is not necessary that theInstitution/Trust should be established under aninstrument, inspite of the facts that as perRajasthan Public Trust Act 1959, the trust within aperiod of two years from the date of creation is tobe registered by the office of Assistant Commissioner having jurisdiction over suchplaces? iii) Whether, on the facts and in the circumstancesof the case and in law the Hon’ble ITAT is right insetting aside the order of CIT(E) Jaipur in refusingregistration u/s 12AA to the trust, which is not alegal trust in the State of Rajasthan in view ofsection 17(1) of the Rajasthan Public Trust Act,1959?” Now, the issue is squarely covered by the decision of thiscourt in case of Commissioner of Income Tax (Exemptions) vs. M/sArihanth Charitable Trust in DBITA No. 279/2017 decided on 14[th]November, 2017 wherein it has been held as under:- “Learned counsel for the appellant framed thefollowing substantial questions of law:- “i. Whether on the facts and circumstances of thecase an in law the Hon’ble ITAT is justified in allowingthe appeal of the assessee for statistical purposes bysetting aside the order under Section 12AA (1) (b) ofCIT (E), Jaipur? ii. Whether on the facts and circumstances of thecase and in law the Hon’ble ITAT is justified in holdingthat it is not necessary that the trust should beestablished under an instrument, in spite of the factthat as per the Rajasthan Public Trust Act, 1959, thetrust within the period of two years from the date ofits creation it to be registered by the office of Asst.Commissioner having jurisdiction over such places? iii. Whether on the facts and circumstances of thecase and in law the Hon’ble ITAT is justified in settingaside the order of CIT(E), Jaipur in refusing theregistration u/s 12AA to the trust, which is not a legaltrust in the state of Rajsthan in view of Section 17(1)of the Rajasthan Public Trust Act, 1959?” 3. While considering the matter of assessee, theTribunal in Paragraph 3.2 which reads as under:- “3.2. We have heard rival contentions, perused thematerial available on record and gone through theorder of id. CIT (Exemptions). We find that under theidentical facts, the Coordinate Bench of the Tribunalin ITA No. 4941/Del/2011 & 3061/Del/2013 has heldas under:- “13. A plain reading of Rule 17A(a) makes it clearthat where the Trust is created, or the institution is iii. Whether on the facts and circumstances of thecase and in law the Hon’ble ITAT is justified in settingaside the order of CIT(E), Jaipur in refusing theregistration u/s 12AA to the trust, which is not a legaltrust in the state of Rajsthan in view of Section 17(1)of the Rajasthan Public Trust Act, 1959?” 3. While considering the matter of assessee, theTribunal in Paragraph 3.2 which reads as under:- “3.2. We have heard rival contentions, perused thematerial available on record and gone through theorder of id. CIT (Exemptions). We find that under theidentical facts, the Coordinate Bench of the Tribunalin ITA No. 4941/Del/2011 & 3061/Del/2013 has heldas under:- “13. A plain reading of Rule 17A(a) makes it clearthat where the Trust is created, or the institution is established, under an instrument, the instrument inoriginal, together with one copy thereof, has to befiled along with prescribed Form No. 10A forregistration of the institution/Trust u/s 12A of theAct. However, the second limb of Rule 17A(a)provides that where the Trust is created, or theInstitution is established, otherwise than under aninstrument, the document evidencing the creation ofthe trust or the establishment of the institution,together with one copy thereof, has to be filed alongwith the statutory Form No. 10A for registration ofthe Institution/ Trust u/s 12AA/12A of the Act. Thus,the applicable Rule 17A itself provides that it is notnecessary that the Institution/ Trust should beestablished under an instrument. The Rule 17A doesnot prescribe that in case the Institution/Trust isestablished otherwise than under an instrument,what type of document evidencing the creation of theTrust or the establishment of the Institution, has tobe filed, meaning thereby that the documentevidencing the creation of Trust of the establishmentof Institution could be of any type. As per theprovisions of the Indian Trust Act, the trust can becreated even orally and if the assessee is able to givesome evidence of creation of such Trust by a word ofmouth, the same shall be eligible for registration u/s12AA/12A of the Act, provided such evidence is filedand the other conditions under the statute aresatisfied.” In view of the decision of the Coordinate Bench, wedeem it proper to restore this appeal of the assesseebefore the id. CIT (Exemptions) to decide inaccordance with law laid down by the CoordinateBench.” The Delhi High Court has confirmed the judgment byDivision Bench on 01.08.2016, wherein, the DivisionBench of Delhi High Court in Paras 5 to 9 observed asunder:- “5. It was sought to be urged before the ITAT by theRevenue that there is a specific requirement of filingdocuments for creation of a Trust along with anapplication for grant of exemption. In the impugnedorder, the ITAT referred to Rule 17A (a) of theIncome Tax Rules, 1962 which itself envisages thepossibility of the Trust being created “otherwise thanunder an instrument” in which event it is sufficient if“the document evidencing the creation of the trust orthe establishment of the institution, together withone copy thereof’ is provided. The proviso to Rule17A(a) permits the Commissioner to accept even acertified copy in lieu of the original if the instrumentor document in original cannot conveniently be produced. It was rightly pointed out by the ITAT thatit is therefore not essential that there must be aninstrument evidencing the creation of a Trust. produced. It was rightly pointed out by the ITAT thatit is therefore not essential that there must be aninstrument evidencing the creation of a Trust. 6. The fact of the matter was that the Assesseeclaimed that it is an institution/trust created in theyear 1159AD and no formal deed of trust wasexecuted at that time. The 17th Karmapa, who is thesupreme spiritual Head of Karma Kagyu Lineage,made a declaration of Trust on stamp paper on 29thday of March, 2011 at Delhi setting out the entirehistory of the Trust along with aims, objects andpurposes. Various provisions with regard to themanagement of the Trust and its properties and themaintenance of accounts etc. were also set out. Itwas stated that the objects of the trust were whollycharitable and religious in nature. The ITAT has in itsimpugned order set out in some detail the contents ofthe said affidavit regarding the creation of the Trustin Central Tibet in 1159 AD and its objectives andactivities over the years. The Court concurs with theITAT that a formal deed of trust was not necessaryfor the grant of registration under Section 12A/12AAof the Act. 7. On the question whether the objects and purposesof the Trust were charitable thereby qualifying forregistration, the ITAT has set out in its impugnedorder in detail, the objects of the Trust as declared inthe affidavit filed by the 17th Karmapa. It concludedfrom reading of the various aims and objects thatthey were charitable in nature. It has been rightlypointed out by the ITAT that it is not necessary thatpresent aims and objects of the Trust should be thesame at the time of its establishment. As furtherrightly pointed out, the stage for examining if theincome of the Trust was being applied for its objectswould arise only when a return of income is filed bythe Trust. The said issue would not affect the grant ofregistration. 8. The ITAT also examined whether the fact that theTrust was for the benefit of a particular communitywould debar it from exemption and registration underSection 12AA/12A of the Act. The said question was,and in the view of this Court rightly, answered in thenegative. In particular the Court concurs with theconclusion of the ITAT that “It is now well-settled thatan objects beneficial to a section of the public is anobjects of general utility. The intention of theinstitution/trust should be impersonal in nature andfor a sufficiently defined and identifiable section of the public.” 9. Lastly, the question was whether the fact that the17[th] Karmapa who is the supreme head of the Trustwas taking food and clothes and meeting his basicneeds from the funds of the Trust resulted in aviolation of Section 13 of the Act? The ITAT correctlyheld that “Section 13 does not debar the main whole-time trustee/trustee from meeting their basic needsfrom the funds of the institution/trust particularlywhen they are not deriving any monetary benefitfrom the institution/trust.” 5. In our considered opinion the view taken by theTribunal is just and proper and no interference iscalled for. No substantial question of law arises.” In view of the above, no substantial question of law arises. Hence, the appeal stands dismissed. (VIJAY KUMAR VYAS)J. (K.S.JHAVERI)J. A.Sharma/57