IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES “A”, HYDERABAD

I.T.A. No. 994/HYD/2015 Assessment Year: 2012-13
Lilavati & Maneklal Shah Charitable Trust (Appellant) vs. The Commissioner of Income tax (Exemptions) (Respondent)
Date of Order : 28-10-2015

ORDER

PER B. RAMAKOTAIAH, A.M. :
This appeal was filed by assessee against the order of the Commissioner of Income Tax (Exemptions), Hyderabad dated 27-05-2015. Assessee, a Trust under the name and style of ‘Lilavati & Maneklal Shah Charitable Trust’ has filed an application in Form No. 10A on 21-11-2014 seeking registration u/s. 12A of the Income Tax Act [Act]. In the course of enquiry Ld.CIT(E) compared original trust deed and supplementary deed and rejected registration stating as under:

“2. It is noticed that vide that supplementary trust deed executed on 13-05-2015, three new objects have been added in the case of the assessee, showing as Main Aims and Objects. At page 2 of that supplementary deed under para 2 it is mentioned, WHEREAS the Founders are keenly desirous of creating a Charitable Trust of Public Nature for the main aims and objects as shown below apart from the aims and objects in the main Trust Deed. Later, there are mention of new objects, showing under the head ‘Main Aims and Objects’ with sl.nos. 1(a) to (c), sl.no. 2 & sl.no.3. It is not understood and also not clear as to how in that supplemental deed made later, such new objects have been added are referred to as main objects, when in the original trust deed made on 15-10-2014, the objects of the trust are mentioned under para 2 with sl.no.(a) to (k) which otherwise constitute the main objects in the case of the applicant trust. Further, it has not been clarified by the Ld. AR as to under which circumstances such supplemental trust deed has been made and executed by the founders of the trust, adding such further objects in the case of the trust. In fact, the applicant has not been able to furnish and explain full factual particulars and also has not been able to clarify about the actual and existing objects in the case of the trust. Under these circumstances, having regard to the provisions of clause (b) to subsection (1) of Sec. 12AA of the Act, in my view, the applicant trust in this case cannot be granted registration u/s. 12AA”.

2. Ld. Counsel submitted that assessee has the following objects as per deed dt. 15-10-2014 as under:

a. To construct dharmasala, rest houses, community hall to be used for the purposes of the Trust without any profit nature for a nominal rent for maintenance.
b. To institute and award scholarship and grant financial assistance for study to all persons deserving help and encouragement and to help poor and indigent families to give better education to their children by way of purchasing books and stationery and paying school fees for higher studies.
c. To establish, maintain and run libraries, reading rooms, recreation centers and other institutions for the spread of education among the members of the public.
d. To establish, maintain and run, develop, grant donations and otherwise help and aid schools, colleges and institutions of the fine arts (music), institutions imparting technical, vocational and industrial subjects, health and body building centers, hostels, poor houses, orphanages and other deserving institutions without any profit motive.
e. To grant donations and aid to institutions having the same or basically similar objects as those of this Trust and which deserve a support by reason of the locality of operation or otherwise.
f. To accept donations, gifts, presents and grant either in cash or in kind for the purposes of the above-mentioned Trust. Such contributions shall be dealt either as corpus or as income according to the direction of the donors.
g. To establish, maintain, run, develop, improve, extend grant donations and to aid and assist in the establishment, maintenance, running, development, improvement and extension of hospitals, clinics, dispensaries, homes and similar institutions affording treatment, care, rest, recuperation and other advantages in the way of alleviating suffering of humanity.
h. To disseminate useful knowledge on cultural and social matters by arranging lectures, shows, performances through such media.
i. To conduct poor feeding and to give food, clothing and cash grants to the poor and defectives without any distinction for any caste or creed or religion and to afford relief to people in distress, affected by earthquakes, floods, famine, pestilence and other causes and to grant donations for the support of the inmate of orphanages, rescue house and similar institutions and societies.
j. To establish, run, assist, improve, and extend grant donations and to aid and assist in the establishment, maintenance, running, development of education of special needs children and young adults so that they may develop basic skills necessary for independent living.
k. To do generally all such other things and matters as are conducive to the general objects of the public utility and charity as defined in the Income tax Act 1961 or in any amendments thereto.

2.1. In addition, assessee also made a supplementary trust deed dt. 13-05-2015 having the following objects as well:

1. (a) Spreading or promotion of education by establishing, maintaining and supporting studentship and scholarship for the poor, needy and deserving students:
(b) Paying to needy students school fees & college fees and books etc.,
(c) Paying whole or part of educational cause for deserving students.
2. Affording Medical, Surgical and Maternity Relief by grant of medical relief and help to poor and deserving patients by providing money to them for medicines, medical treatment operation and post operation treatment and blood transfusion.
3. To grant donations and aids to the institutions, Societies, Special Schools engaged in Multi-pronged services in the field of disabilities imparting education and vocational training to children with multiple disabilities. as defined in the Income tax Act 1961 or in any amendments thereto.

2.2. It was the submission of Ld. Counsel that assessee’s objects are very clear and charitable in nature and the CIT(Exemptions) has erred in rejecting the registration. Ld. CIT-DR relied on the orders of CIT(Exemptions) to submit that the objects are not clear and no explanation was furnished by assessee.

3. We have considered the issue and perused the documents placed on record. As can be seen from the objects, they are very clear and they are charitable in nature and not having any religious objects. We are unable to understand on what basis the Ld. CIT(Exemptions) came to his conclusion in rejecting the registration. We are also unable to understand what Ld.CIT(E) meant by the actual and existing objects in the case of the trust. Since the objects are very clear, in case the CIT(Exemptions) has any other clarifications required, he could have sought explanation. Since CIT(Exemptions) has not applied his mind to the facts in issue, we are of the opinion that his order cannot be sustained. Accordingly, the order dt. 27-05-2015 is set aside with the direction to CIT(Exemptions) to consider the issue of registration u/s. 12A, afresh after giving due opportunity to assessee.

4. In the result, appeal is allowed for statistical purposes.

Order pronounced in the open Court on 28th October, 2015

Sd/-                                          Sd/-
(D. MANMOHAN)        (B. RAMAKOTAIAH)
VICE PRESIDENT ACCOUNTANT MEMBER