ITAT directs trust to amend deed for registration, stresses irrevocability

The ITAT set aside the DIT(E)'s refusal of registration under section 12AA due to the revocable nature of the trust. The ITAT directed the appellant to make necessary amendments to the trust deed for irrevocability, emphasizing that registration would be granted upon satisfactory amendments. The ITAT found the appellant's submission of the draft trust deed for approval appropriate, remitting the matter to the DIT(E) with clear directions to review and approve the amended trust deed. The ITAT stressed the importance of the DIT(E) confirming the acceptability of the amendments before granting registration under section 12AA.

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Issues Involved:
1. Denial of registration under section 12AA of the Act by the DIT(E) based on the revocable nature of the trust.
2. Appeal before the ITAT challenging the denial of registration.
3. Direction by ITAT for necessary amendment to the trust deed for registration.
4. Refusal of registration by DIT(E) despite submission of draft amended trust deed.
5. Disagreement between the parties regarding the sufficiency of the draft trust deed.
6. Consideration of the case by ITAT and setting aside the DIT(E)'s order.

Analysis:

1. The initial issue revolved around the denial of registration under section 12AA of the Act by the DIT(E) due to the revocable nature of the trust as per clause 10 of the trust deed. The DIT(E) held that the trust cannot be considered wholly public charitable due to its revocable nature.

2. The assessee appealed before the ITAT challenging the denial of registration. The ITAT, in its order, directed the assessee to make necessary amendments to the trust deed to ensure irrevocability, stating that registration would be granted upon such amendments.

3. Despite the direction from ITAT, the DIT(E) refused registration again upon the submission of a draft amended trust deed by the appellant. The DIT(E) considered the draft trust deed as vague and unsigned, leading to the refusal of registration under section 12AA.

4. The appellant argued that the submission of the draft trust deed was for the DIT(E) to assess if the amendments were satisfactory, as per the direction of the ITAT. The appellant contended that once the DIT(E) approved the draft, a final deed would be prepared and submitted for registration.

5. Upon considering the arguments from both parties, the ITAT found that the approach of the assessee in submitting the draft trust deed for approval was appropriate given the circumstances. The ITAT set aside the DIT(E)'s order and directed the DIT(E) to review the draft trust deed for approval.

6. The ITAT remitted the matter back to the DIT(E) with clear directions for the approval of the amended trust deed upon satisfaction. The ITAT emphasized the need for the DIT(E) to confirm the acceptability of the amendments before granting registration under section 12AA of the Act.

This detailed analysis of the legal judgment highlights the progression of the case, the issues involved, the arguments presented by both parties, and the final decision and directions provided by the ITAT.

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