2015 (2) TMI 7 - AT - Income Tax

Tribunal orders CIT to register trust under section 12AA citing Supreme Court judgment. Name discrepancy minor.

The Tribunal directed the CIT to allow the registration of the trust under section 12AA, considering the comparability of the trust's objects with those ... Registration u/s 12AA denied - assessee is a registered Trust under BPT Act w.e.f 27.10.2009 - wrong spelling in the name appearing on the PAN - Held that:- It is a fit case for granting registration u/s 12AA of the Act. Regarding the wrong spelling appearing on the PAN, we find prima facie the name of the assessee is printed wrongly on the PAN. We place our reliance more on the copy of the Pass-Port, copy of which is placed in the paper book of the assessee. Generally, the Pass-Port is 'issued' to the citizens after completion of due verification by the investigation authorities and therefore, it assumes significance. In our opinion, the pass-port is more credible document. The other details about the Date of Birth, Father name etc which are found comparable but for spelling in the name of the settler. In our opinion, these frivolous discrepancies in the matters of spelling of a settler should not come on the way of granting of the registration of the trust, which is otherwise meant for general public utility. Accordingly, CIT is directed to allow the claim of the assessee for registration of the trust. [See Dawoodi Bhora Jamat 2014 (3) TMI 652 - SUPREME COURT] - Decided in favour of assessee. Issues Involved:1. Denial of registration under section 12AA of the Income Tax Act.2. Nature of the trust's objects-whether they are charitable, religious, or both.3. Discrepancy in the name of the settler in official documents.Issue-wise Detailed Analysis:1. Denial of Registration under Section 12AA:The appeal was filed by the assessee against the order of the CIT-III, Thane, dated 13.12.2012, which rejected the application for registration under section 12AA of the Income Tax Act. The CIT's rejection was based on the grounds that the trust's activities were a mixture of religious and charitable purposes, and there was a discrepancy in the settler's name in the trust deed and PAN.2. Nature of the Trust's Objects:The CIT examined the objects of the trust and concluded they were religious in nature, benefiting a particular religious community. The assessee argued that the objects were charitable and of general public utility, citing the judgment in the case of Ahmedabad Rana Caste Association, 82 ITR 704. The CIT noted that the trust funds were applied to activities such as Urs Niyaz & Majlis (lunch & dinners) and 'Imdad Talim,' which included learning the Arabic script, considered by the CIT as religious acts. The assessee contended that learning Arabic was not inherently religious and that providing financial assistance to the Dawoodi Bohra Community constituted general public utility. The Tribunal compared the objects of the present trust with those of the Dawoodi Bohra Jamat, as adjudicated by the Supreme Court in 364 ITR 31, and found them comparable. The Supreme Court had held that the objects of the trust were indicative of both charitable and religious purposes, and such composite objects could claim exemption under section 11 of the Act.3. Discrepancy in the Name of the Settler:The CIT also rejected the registration application due to a discrepancy in the settler's name, which was mentioned differently in the PAN and the trust deed. The assessee explained that the variation was due to language differences and was rectifiable. The Tribunal found that the name discrepancy was a minor issue and relied on the settler's passport, which matched the name in the trust deed. The Tribunal emphasized that such minor discrepancies should not obstruct the registration of the trust, which is meant for general public utility.Conclusion:The Tribunal directed the CIT to allow the registration of the trust under section 12AA, considering the comparability of the trust's objects with those in the Supreme Court judgment and the minor nature of the name discrepancy. The appeal of the assessee was allowed. The order was pronounced in the open court on 30th December 2014.