The Commissioner Of Income Tax, Rohtak v. Savior Charitable Trust

IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH ITA No. 245 of 2011 (O&M) Date of decision: 22.01.2013 The Commissioner of Income Tax, Rohtak versus Savior Charitable Trust ...Petitioner ..Respondent CORAM: HON'BLE MR. JUSTICE HEMANT GUPTAHON'BLE MS. JUSTICE RITU BAHRI Present:-Mr. Inderpreet Singh, Advocatefor the appellant. Mr. Akshay Bhan, Advocate and Mr. Alok Mittal, Advocatefor the respondent. HEMANT GUPTA, J. (Oral) The Revenue is in appeal under Section 260A of the Income Tax Act,1961 (for short 'the Act') arising out of an order passed the Income Tax AppellateTribunal, Delhi Bench 'I' New Delhi (for short 'the Tribunal) on 20.08.2010 in ITANo.1168/Del/2007, in respect of registration of assessee as a charitable trust underSection 12A of the Act. The Revenue has raised four substantial questions of law, but in ouropinion, the following substantial question of law arises for consideration:-“Whether the Hon'ble Income Tax Appellate Tribunal wasright in law to grant registration under Section 12A of theAct when the assessee has failed to prove the genuineness ofits activities?” The said question arises out of the fact that the assessee filed anapplication for registration of the trust under Section 12A of the Act on 20.06.2006 for its registration as a Charitable Trust. The Learned Commissioner of IncomeTax declined registration inter-alia for the reason that a sum of Rs.17,12,143/-cannot be said to be donation towards corpus because the counterfoils of thereceipts issued to the donors do not contain any specific directions nor has theassessee adduced any proof that the respective donors made the donations withspecific directions towards corpus. The counterfoil do not bear any even completeaddresses of the donors and in most of the cases only bare names are there on thereceipts and without permanent account number. Thus, it was concluded that thetrust has failed to comply with the provisions of the Act. The learned Tribunal in an appeal set aside the order dated 29.12.2006of the Commissioner of Income Tax (Annexure A-1) and returned a finding thatsuch can not be ground to decline registrationbut it should be left with theAssessing Officer to examine the same at the time of the making assessment as towhether the donation was given towards the object of the trust or not. It was foundthat the exemption would not available to an assessee if the Assessing Officer issatisfied about the genuineness of the activities promised or claimed to be carriedout in each financial year relevant to the assessment year. We have heard learned counsel for the parties and also gone through thelist of donors produced by Mr. Bhan during the course of arguments. Learnedcounsel for the respondent relies upon the judgment of Delhi High Court reportedas Director of Income-Tax (Exemption) vs. Keshav Social and CharitableFoundation, 278 ITR 152 (Delhi)to argue that the failure to furnish the completelist of donors does not necessarily mean donations are unaccounted money,therefore, the said factor cannot be taken into consideration to decline registration. The list of 87 donors shows that the only names are mentioned withoutany address. The lack of information in respect of parentage, age, address or PANNumbers in the list of donors are the good reasons for declining the registration of We have heard learned counsel for the parties and also gone through thelist of donors produced by Mr. Bhan during the course of arguments. Learnedcounsel for the respondent relies upon the judgment of Delhi High Court reportedas Director of Income-Tax (Exemption) vs. Keshav Social and CharitableFoundation, 278 ITR 152 (Delhi)to argue that the failure to furnish the completelist of donors does not necessarily mean donations are unaccounted money,therefore, the said factor cannot be taken into consideration to decline registration. The list of 87 donors shows that the only names are mentioned withoutany address. The lack of information in respect of parentage, age, address or PANNumbers in the list of donors are the good reasons for declining the registration of the assessee as a charitable trust. The list of such donors is sufficient to infer thatabout the genuineness of the activities of the trust as contemplated and required tobe considered by the Assessing Officer in terms of Section 12AA(1)(aa) of theAct. We find that reliance on the judgment referred too by learned counsel for therespondent is not tenable. In the aforesaid case, the question examined was duringthe course of assessment and not during the course of grant of registration. At thetime of registration, the Commissioner of Income Tax is to consider thegenuineness of activities of the Trust or the Institution and was also required tomake such enquiry as he may deem necessary. On the basis of enquiry conductedand the information submitted by the respondent, the introduction of donors,shows in-genuineness of activities of the trust. Therefore, it is a sufficient reasonto decline registration in terms of Section 12AA(1) (a) of the Act. Consequently, while allowing the appeal, the question of law isanswered in favour of the Revenue and against the Trust. Allowed in the above terms. (HEMANT GUPTA) JUDGE January 22, 2013G.Arora/Vimal (RITU BAHRI) JUDGE