Commissioner Of Income Tax … v. M/S Maharashi World Peace Trust …

---1--- HIGH COURT OF MADHYA PRADESH : JABALPUR (Coram: Hon'ble Shri Justice Ajay Kumar Mittal, Chief JusticeHon'ble Shri Justice Vijay Kumar Shukla, Judge) I.T.A No.61/2019 Commissioner of Income Tax …..............Appellant Vs. M/s Maharashi World Peace Trust …........ Respondent -------------------------------------------------------------------------------------------- Appearance: Shri Sanjay Lal, Advocate for the appellant/Department. -------------------------------------------------------------------------------------------- O R D E R (Oral)(6.1.2020) Per : Ajay Kumar Mittal, Chief Justice This appeal has been filed under Section 260-A of the Income TaxAct, 1961 (for short “the Act”) challenging the order dated 12.10.2018passed by the Income Tax Appellate Tribunal (for short “the Tribunal”),Indore in ITA No.553/Ind/2017 whereby the appeal filed by the assessee wasallowed and the order passed by the CIT(E), Bhopal was set aside. 2.The appellant has claimed the following substantial questions of law:- “1. Whether, on the facts & circumstances of the case, and inlaw, the ITAT is correct in holding that a public charitableTrust does not require to comply with local law of MPrequiring registration under MP Public Trust Act 1951 ?law, the ITAT is correct in holding that a public charitableTrust does not require to comply with local law of MPrequiring registration under MP Public Trust Act 1951 ?2.Whether, on the facts and in the circumstances of the caseand in law, the ITAT is correct in holding thatgenuineness of the activities of the trust does not includeand in law, the ITAT is correct in holding thatgenuineness of the activities of the trust does not include compliance with requirement of local law namely MPPublic Trust Act ?” 3.Briefly stated, the facts of the case are that the respondent-M/sMaharashi World Peace Trust (for short “the assessee Trust”) applied forregistration under Section 12AA(1)(b)(i) of the Act before the CIT(E),Bhopal. The said application was rejected on the ground that the assesseeTrust was not registered as a public Charitable Trust. The order passed bythe CIT(E), Bhopal was challenged in an appeal before the Tribunal, who inturn, set aside the order passed by the CIT(E), Bhopal and allowed theappeal filed by the assessee Trust holding that the action of learned CIT(E),Bhopal denying the registration merely for the reason that the assessee trustwas not registered as Public Charitable Trust cannot be held to be justified.Being aggrieved by the said order of the Tribunal, the department haspreferred the present appeal. 4.Learned counsel for the appellant/Department submitted that duringthe pendency of the application under Section 12AA of the Act, the assesseeTrust was required to produce copy of registration as Public Charitable Trustbut neither the satisfactory reply nor the certificate of registration as PublicCharitable Trust with the Registrar of Madhya Pradesh Public Trust wassubmitted by it. It was further submitted that the learned Tribunal has erredin holding that genuineness of the activities of the trust does not includecompliance with the requirement of local law namely M.P. Public Trust Act.Further, the Tribunal did not controvert the ground on which the approvalwas denied by the CIT(E), Bhopal. Accordingly, it was prayed that thisappeal may be allowed by setting aside the order impugned in this appeal. 5.Having heard learned counsel for the appellant/Department, we areof the considered opinion that the present appeal deserve to be dismissed. 6.The learned Tribunal while dealing with the argument of learnedcounsel for the assessee Trust regarding rejection of application filed underSection 12AA of the Act for the reason that the assessee Trust was notregistered as a Public Trust as per M.P. Public Trust Act, 1951 has negativedthe said finding of the CIT(E), Bhopal and held as under:- 5.Having heard learned counsel for the appellant/Department, we areof the considered opinion that the present appeal deserve to be dismissed. 6.The learned Tribunal while dealing with the argument of learnedcounsel for the assessee Trust regarding rejection of application filed underSection 12AA of the Act for the reason that the assessee Trust was notregistered as a Public Trust as per M.P. Public Trust Act, 1951 has negativedthe said finding of the CIT(E), Bhopal and held as under:- “6.As per the provisions of Section 12AA(1) of the Actprovides that “Principal Commissioner or Commissioner, onreceipt of application for registration of the Trust or Institutionmade under Clause a or Clause aa of Sub-Section 1 of Section12A can call for such documents or information as he thinksnecessary in order to satisfy himself about the objects andgenuineness of activities of the Trust or Institution and alsomake such enquiries as he may deem necessary in this behalfand after satisfying himself about the objects of the Trust orInstitution and the genuineness of its activities he may pass anorder in writing registering the Trust or Institution or if he is notso satisfied, he may pass an order in writing refusing to registerthe Trust or Institution. Provision of Section 12AA(1) of the Actrefers to the “Trust or Institution”. There seems to be norequirement for a trust to be mandatorily registered as a PublicCharitable trust in the State of India where it is located. Theaction of Ld. CIT-Exemptions denying the registration merelyfor the reason that the assessee Trust was not registered as apublic Charitable Trust cannot be held to be justified.” 7.In the present case, the registration was applied for by therespondent under Section 12AA(1)(b)(i) of the Act and the provisions underSection 12AA(1) of the Act also refers to the “trust or institution” and thereis no mandate under Section 12AA of the Act that the application seekingexemption is required to be applied only by a registered Trust or Institution ---4--- under the local laws i.e. M.P. Public Trust Act, 1951. The learned Tribunalconsidering the provisions of Section 12AA(1) of the Act has specificallyheld that for registering the Trust or Institution for the purposes of the saidAct, the Principal Commissioner or Commissioner, is required to satisfyitself about the objects of the applicant – Trust or Institution and thegenuineness of its activities. Under the said provision, there is norequirement for a Trust to be mandatorily registered as a Public CharitableTrust under the local Act. In the absence of any provision requiringregistration as a Public Charitable Trust before applying for registrationunder Section 12AA(1) of the Act, the findings arrived at by the learnedTribunal cannot be faulted and said to be illegal or perverse in any manner. 8.In view of the aforesaid, we do not find any reason to take adifferent view from the one taken by the learned Tribunal as there was nostatutory requirement under the Act for the assessee Trust to get itselfregistered under any law before applying for registration. No infirmity couldbe found in the order of learned Tribunal warranting interference. Therefore,no substantial question of law arises for consideration. 9.Accordingly, this appeal stands dismissed. (Ajay Kumar Mittal) (Vijay Kumar Shukla) Chief JusticeJudge Anchal Digitally signed by ANCHAL KHARE Date: 2020.02.01 12:15:14 +05'30'