Commissioner Of Income Tax (Exemptions), Kolkata v. M/S Seth Jagannath Bajoria Charitable Trust

IN THE HIGH COURT AT CALCUTTASPECIAL JURISDICTION (INCOME TAX)ORIGINAL SIDE IA NO.GA/2/2017 (OLD NO. GA/3645/2017)InITAT/366/2017 COMMISSIONER OF INCOME TAX (EXEMPTIONS), KOLKATAVS.M/S SETH JAGANNATH BAJORIA CHARITABLE TRUST BEFORE :THE HON’BLE JUSTICE T.S. SIVAGNANAMA N DTHE HON’BLE JUSTICE HIRANMAY BHATTACHARYYADate: January 3, 2022. [Via video conference] Appearance :Mr. Debashis Chowdhury, Adv.… for the appellant/revenueMr. Akhilesh Gupta, Adv.… for the respondent The Court : This appeal by the revenue filed under Section260A of the Income Tax Act, 1961 (the Act) is directed against theorder dated 17[th] March, 2017 passed by the Income Tax AppellateTribunal, “A” Bench, Kolkata (Tribunal) in ITA No. 19/Kol/2016 forthe assessment year 2006-07. The Revenue has raised the following substantial questionsof law raised for our consideration; 1.Whether on the facts and in the circumstances of thecase, the Learned Tribunal erred in law in allowingregistration under Section 12AA of the Income Tax Act inthe absence of dissolution clause and the original copyof the Trust Deed since the absence of such clause inthe Trust Deed takes away the charitable nature of thetrust.case, the Learned Tribunal erred in law in allowingregistration under Section 12AA of the Income Tax Act inthe absence of dissolution clause and the original copyof the Trust Deed since the absence of such clause inthe Trust Deed takes away the charitable nature of thetrust. 2.Whether on the facts and in the circumstances of thecase, the Learned Tribunal erred in law in relying on thedecision of the ITAT, Mumbai passed in the case of TaraEducational and Charitable Trust in ITA no.1247/Mum/2013 which does not apply in the facts ofthe instant case.case, the Learned Tribunal erred in law in relying on thedecision of the ITAT, Mumbai passed in the case of TaraEducational and Charitable Trust in ITA no.1247/Mum/2013 which does not apply in the facts ofthe instant case. We have heard Mr. Debashis Chowdhury, learned standingCounsel appearing for the appellant/revenue and Mr. Akhilesh Gupta,learned Counsel for the respondent/assessee. The respondent/assessee is a Trust having been constitutedby a Deed of Trust dated 12[th] July, 1944. It filed an application inForm No. 10A for registration on 14[th] July, 2015. The said applicationwas rejected by the Commissioner of Income Tax (Exemptions),Kolkata CIT(E), by order dated 4[th] November, 2015 under Section12AA of the Act on the sole ground that the Deed of Trust did notcontain a dissolution clause. We have heard Mr. Debashis Chowdhury, learned standingCounsel appearing for the appellant/revenue and Mr. Akhilesh Gupta,learned Counsel for the respondent/assessee. The respondent/assessee is a Trust having been constitutedby a Deed of Trust dated 12[th] July, 1944. It filed an application inForm No. 10A for registration on 14[th] July, 2015. The said applicationwas rejected by the Commissioner of Income Tax (Exemptions),Kolkata CIT(E), by order dated 4[th] November, 2015 under Section12AA of the Act on the sole ground that the Deed of Trust did notcontain a dissolution clause. On perusal of the order dated 4[th] November, 2015, we findthat CIT(E) did not doubt the genuineness of the activities of therespondent/Trust. The assessee Trust carried the matter on appealbefore the Tribunal, specifically by producing a certified copy of theDeed of Trust. Further stating that the Trust is a public charitabletrust, the immovable property has been set apart for a temple atHaridwar for the general public and no trustee or the Trust are thererelated or entitled for any profits from the assets and usufructs of theTrust and the Trustee has passed a resolution stating therein that inthe event of dissolution of Trust, all available funds including theimmovable and movable assets of the Trust to be handed to any otherTrust having similar objects and operating within the Union of India.Further, if no such Trust is found, the property shall be vested to theGovernment. This resolution was annexed as Annexure No. IV to thegrounds. The Tribunal after considering the factual position and onexamining the records placed before it allowed the appeal filed by theassessee. We find that there is no error in the order passed by theTribunal. As already pointed out the CIT(E) did not doubt thegenuineness of the activities of the Trust but merely stated thatdissolution clause was not found and/or available in the Deed ofTrust. The order passed by the CIT(E) dated 4[th] November, 2015 is anon-speaking order. Had the CIT(E) examined the entire recordsincluding the resolution passed by the Trust which came into being asearly in the year 1944 then in all probability the application would not have been rejected. In any event, the Tribunal rightly applied the legalposition and allowed the assessee’s appeal and we find that there isno ground to interfere with the order passed by the Tribunal. Accordingly, the appeal is dismissed and the substantialquestions of law are answered against the revenue. Consequently, the application also stands dismissed. (T. S. SIVAGNANAM, J.) (HIRANMAY BHATTACHARYYA, J.) RS/GH