Ita/336/2010 Of Nooral Islam Trust v. Commissioner Of Income Tax

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE K.VINOD CHANDRAN THURSDAY, THE 17TH NOVEMBER 2011 / 26TH KARTHIKA 1933 ITA.No. 336 of 2010() --------------------- ITA.487/COCH/2009 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT ----------------------------- NOORAL ISLAM TRUST, V/64, GROUND FLOOR, A1-AZHAR CAMPUS, PERUMBILLICHIRA P.O., THODUPUZHA, IDUKKI DISTRICT. BY ADV. SRI.P.BALAKRISHNAN (E) SRI.P.M.SANEER RESPONDENT: --------------- COMMISSIONER OF INCOME TAX, COCHIN. ADV. SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 17/11/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: APPENDIX ANNEXURE A: TRUE COPY OF TRUST DEED DT.23.7.1998.ANNEXURE B: TRUE COPY OF TRUST DEED DT.24.2.2005.ANNEXURE C: PROCEEDINGS OF THE COMMISSIONER OF INCOME TAX. ANNEXURE D: TRUE COPY OF CERTIFICATE DT.27.7.2009 ISSUED BY NATIONALCOMMISSION FOR MINORITY EDUCATION INSTITUTION. ANNEXURE E: TRUE COPY OF APPEAL FILED BY THE APPELLANT BEFORE THE INCOMETAX TRIBUNAL. ANNEXURE F: CERTIFIED COPY OF THE ORDER DT.2.8.2010. TRUE COPY P.S. TO JUDGE C.N.RAMACHANDRAN NAIR &K.VINOD CHANDRAN, JJ. .................................................................... I.T. Appeal No.336 of 2010 ....................................................................Dated this the 17th day of November, 2011. JUDGMENT Ramachandran Nair, J. The appeal is filed against order of the Tribunal confirming orderof the C.I.T.(Appeals) declining registration to appellant's trust underSection 12AA of the Income Tax Act. We have heard Adv.Sri.P.Balakrishnan appearing for the appellant-assessee and StandingCounsel for the respondent. 2. The appellant is a pubic charitable trust registered in 1998.Admittedly among other things appellant's objective is running ofeducational institutions. The appellant applied for registration of thetrust under Section 12AA of the Act. However, the application forregistration was withdrawn which was granted by the department.Thereafter the appellant amended the trust deed elaborating the objectclause specifically including it's main object as running Dental College.When the amended deed after registration in 2005 was presented forregistration under Section 12AA of the Income Tax Act, the ITA 336/2010 Commissioner of Income Tax rejected the application for the reasonthat the original deed did not contain any provision for amendment ofthe deed. It is against this order of the Commissioner the assessee filedappeal which was dismissed by the Tribunal. The appellant is beforeus in second appeal. 3. After hearing both sides what we notice is that only theamended trust deed was considered for registration under Section12AA by the Commissioner of Income Tax. The only ground on whichapplication was turned down is the amendment carried out which is notauthorised under the original deed. It is specifically stated in theCommissioner's order that the provisions of the Trust Act will apply.However, the contention now raised by counsel for the appellant is thatthe Trust Act does not apply to Public Charitable Trust. It is furtherpointed out by the counsel for the appellant that under Section 92 of theC.P.C. read with Section 26 of the Specific Relief Act, 1963, theappellant is entitled to file Scheme Suit and get amendment declaredvalid by a competent civil court. As of now department has notassessed the Trust on any income. The objects are admittedlycharitable in nature entitling the assessee to claim exemption, if the ITA 336/2010 ITA 336/2010 conditions of Section 11 are satisfied. Moreover, educationalinstitutions are entitled to separate exemption on income earned by itunder Section 10(23)(c) of the Income Tax Act. In any case since theassessee wants to correct a technical omission before the civil court, wefeel an opportunity can be granted to the assessee to get appropriateorders from civil court. Accordingly without going into the merits ofthe case we allow the appeal by setting aside the order of the Tribunaland that of the Commissioner and remand the case to the Commissionerfor reconsideration after giving assessee an opportunity to get ordersfrom civil court. The assessee is granted four months' time to obtainorders from the civil court and produce the same before theCommissioner. However, we make it clear that the assessee shall notbe entitled to claim any exemption on ground of limitation reckoningthe period of four months granted by us from today. C.N.RAMACHANDRAN NAIRJudge K.VINOD CHANDRANJudge