Tca/229/2011 Of Commissioner Of Income Tax v. M/S Veda Vikas Educational

IN THE HIGH COURT OF JUDICATURE AT MADRAS THE HON'BLE MR. JUSTICE M. DURAISWAMYANDTHE HON'BLE MRS. JUSTICE T.V. THAMILSELVI Tax Case Appeal No.229 of 2011 M/s.Veda Vikas Educational & Charitable Trust,36-IB, N.H.7 Salem, Santhiyur,Salem – 636 203. ... Respondent Tax Case Appeal filed under Section 260A of the IncomeTax Act, 1961 against the order of the Income Tax AppellateTribunal, Chennai “C” Bench, dated 12.11.2010 passed inI.T.A.No.1609/Mds/2009, preferred against the order of theCommissioner of Income Tax, Salem-I, made in C.No.9755(138)/SCM/2008-2009, order dated 12.08.2009. (Delivered by M. DURAISWAMY, J.) The above appeal has been filed by the Revenuechallenging the order passed in I.T.A.No.1609/Mds/2009 on thefile of the Income Tax Appellate Tribunal, Chennai Bench “C”. 2.The Trust was created by Trust Deed, dated 24.05.2001,by 30 persons in the name of “M/s.Shanmuga VenkateshwaraEducational Trust”. According to the appellant, one of theTrustees was a minor aged about 14 years on the date ofexecution of the Trust Deed. The main object of the Trust wasfor the cause of promotion of education culture and ethicsirrespective of religion, caste and races among the public.Further, it has been recited in the document that the Trustwas to take all efforts for the betterment of the society byfestinating organisation to provide better education, Arts,https://hcservices.ecourts.gov.in/hcservices/and Culture which are common good for promotion of Society. The respondent Trust filed an application in Form-10A forregistration under Section 12-AA of the Income Tax Act, 1961(“the Act” for brevity) on 24.02.2009. The Commissioner ofIncome Tax found that all the 30 persons have signed the TrustDeed and out of the 30 persons, 13 were stated to be ExecutiveCommittee members. By a supplementary deed, the object clausewas diluted by a new object clause to the effect that theobject was to be achieved by establishing agricultural farmand proceeds to be utilised for the purpose of achieving theobjects of the Trust. 3.The Revenue contended that these amendments in thesupplementary deed are against the object mentioned in theoriginal Trust Deed. The Commissioner of Income Tax, takinginto consideration the case of both sides, refused to registerthe Trust under Section 12AA of the Act. While rejecting theapplication, the Commissioner of Income Tax observed that aminor has been inducted as a Trustee under the Trust Deed andhe was also allowed to cast his vote independently. Further,the Commissioner of Income Tax observed that the main objectof the Trust was diluted in the supplementary deed, andtherefore, the same is violative of Section 12AA of the Act. 4.Challenging the order passed by the Commissioner ofIncome Tax, the respondent filed an appeal before the IncomeTax Appellate Tribunal and the Tribunal, by order dated12.11.2010, allowed the appeal and directed the Commissionerof Income Tax to allow registration of the Trust under Section12AA of the Act. Aggrieved over the same, the Revenue hasfiled the above appeal. The above appeal was admitted on thefollowing substantial questions of law : "1.Whether on the facts and in thecircumstances of the case, the Income Tax AppellateTribunal was right in directing the Commissioner ofIncome Tax to grant registration under Section 12AAof the Income Tax Act, 1961? 2.Whether on the facts and in thecircumstances of the case, the Income Tax AppellateTribunal was right in directing the Commissioner ofIncome Tax to grant registration under Section 12AAwhen the assessee had failed to furnish the detailscalled for by him in the course of the registrationproceedings, which were necessary to satisfyhimself about the genuineness of the activities ofthe Trust? "1.Whether on the facts and in thecircumstances of the case, the Income Tax AppellateTribunal was right in directing the Commissioner ofIncome Tax to grant registration under Section 12AAof the Income Tax Act, 1961? 2.Whether on the facts and in thecircumstances of the case, the Income Tax AppellateTribunal was right in directing the Commissioner ofIncome Tax to grant registration under Section 12AAwhen the assessee had failed to furnish the detailscalled for by him in the course of the registrationproceedings, which were necessary to satisfyhimself about the genuineness of the activities ofthe Trust? 3.Whether on the facts and in thecircumstances of the case, the Income Tax AppellateTribunal was right in directing the Commissioner ofIncome Tax to grant registration under Section 12AAwhen the conditions laid down in Section 12AA ofhttps://hcservices.ecourts.gov.in/hcservices/the Act regarding satisfaction of the Commissioner of Income Tax with regard to the charitable natureof the objects and the genuineness of theactivities carried out by the Trust were notfulfilled?" 5.On a perusal of the order passed by the Tribunal, it isclear that the Tribunal has not gone into the issues that weredecided by the Commissioner of Income Tax. While reversingthe order passed by the Commissioner of Income Tax, theTribunal should have considered the findings given by theCommissioner of Income Tax in detail. However, the Tribunal,in Para No.4, observed that the substitution or change ofTrustees subsequent to the Trust Deed would not effect theoriginal object unless the object itself is changed by thesubsequent supplementary deed. When the Commissioner ofIncome Tax had given findings with regard to the induction ofa minor as a Trustee and that the main object of the Trustwould be lost by the subsequent supplementary deed, theTribunal should have considered those aspects and givenfindings with regard to the same. Since the Tribunal has notconsidered those issues, we are of the considered view thatthe order passed by the Tribunal should be set aside and thematter be remitted back to the Tribunal for freshconsideration. 6.Accordingly, the order passed by the Income TaxAppellate Tribunal in I.T.A.No.1609/Mds/2009, dated12.11.2010, is set aside and the matter is remitted back tothe Tribunal for fresh consideration. The Tribunal isdirected to decide the matter afresh, specifically with regardto the findings that were given by the Commissioner of IncomeTax in his order, dated 12.08.2009, and also give a findingwhether the respondent had complied with the provisions ofSection 12AA of the Act. The appeal shall be decided afreshafter giving opportunity of hearing to both sides. mkn 1.The Income Tax Appellate Tribunal, Chennai “C” Bench https://hcservices.ecourts.gov.in/hcservices/ 2.The Commissioner of Income Tax, Salem. Salem. Tax Case Appeal No.229 of 2011 CP(CO)CB(05/03/2021)