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Issues involved: Application for registration of trust under section 12A of the Income Tax Act, 1961 rejected for non-compliance with rule 17A of the Income Tax Rules, 1962.
Summary: The petitioners, a public religious trust, applied for registration under section 12A of the Income Tax Act, 1961, which was rejected by the Commissioner citing non-compliance with rule 17A of the Income Tax Rules, 1962. The trust, created over 100 years ago without any formal instrument, submitted various documents including revenue records, property tax assessments, and citizen affidavits to support its existence. The Commissioner held that these documents did not evidence the creation of the trust as required by rule 17A. The High Court analyzed the relevant sections and rules, emphasizing that the intention behind section 12A was not to exclude trusts created without an instrument. It interpreted rule 17A to encompass all evidential documents logically inferring the trust's creation. The court found that the documents submitted by the petitioners, such as historical revenue records and property tax assessments, provided a logical basis for inferring the trust's creation and thus satisfied the requirements of rule 17A. Consequently, the Commissioner's order was quashed, and he was directed to reconsider the trust's application in light of the court's observations. No costs were awarded, and the security amount was to be refunded to the petitioners.
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