2012 (8) TMI 1081 - AT - Income Tax

Tribunal remands case for fresh review under Income Tax Act section 12A.

Lord Krishna Charitable Trust Versus Commissioner of Income Tax, Rohtak

The Tribunal allowed the appeal, remanding the case to CIT for a fresh review of the registration application under section 12A of the Income Tax Act. The ... Rejection of application of the appellant for registration u/s 12A of the Act - Held that:- Merely because the trustees are members of one family, it cannot be said that the trust is not a public trust. In that case there was also no finding or allegation in the impugned order that the activities carried out by the trust were not in accordance with its objects, the Tribunal held that there was no case for cancellation of registration u/s 12AA. The claim of the appellant also remained that the defects as pointed out by the Ld. CIT in the trust deed were also removed by rectification/amendment to the trust deed which has not been considered by the Ld. CIT while disposing off the application for the registration. Under these circumstances and without going into the dispute as to whether original instrument was furnished before the CIT or not, we in the interest of justice set aside the matter to the file of the Ld. CIT for fresh consideration of the request of registration made by the appellant in the application dated 30.3.2011 after affording opportunity of being heard to the appellant. Issues: Application for registration u/s 12A of the Income Tax Act rejected by CITDetailed Analysis:1. Contention of the Appellant:The Appellant argued that all trust objects are eligible for registration u/s 12A, emphasizing on imparting education without discrimination. The trust opened a polytechnic for training students. Original trust deed was furnished, rectified, and amended. ACIT recommended registration u/s 12AA, stating the trust fulfills conditions under Section 11 of the Act. Appellant cited precedents to support the argument.2. Arguments by the Respondent:The Respondent justified CIT's decision, stating CIT's satisfaction is crucial for registration u/s 12A.3. Judgment Analysis:The Tribunal found CIT did not consider ACIT's favorable report recommending registration. CIT relied on JCIT's report and highlighted family members as trustees. Citing precedent, the Tribunal noted family trustees do not negate public trust status. No adverse findings on trust activities were made. The Tribunal noted rectification of trust deed defects, not considered by CIT. Despite uncertainties on original document submission, the Tribunal set aside the matter for fresh consideration by CIT, directing submission of original trust deed for review.4. Conclusion:The Tribunal allowed the appeal for statistical purposes, remanding the case to CIT for a fresh review of the registration application. The Appellant was directed to provide the original trust deed for consideration. The judgment was delivered on 31/08/2012.