2016 (7) TMI 847 - AT - Income Tax

Registration under section 12AA rejected - nature of activities - Held that - The assessee temple is registered with the Endowments Department under section 6(c)(ii) of the A.P. Charitable and Hindu Religious Institutions and Endowments Act, 1987. Section 6 of the Act provides for preparation and publication of list of charitable and religious institutions and Endowments on the basis of the income. Clause-(c) and sub-clause (ii) thereof, provides for religious institutions and Endowments other than Mutts not falling under Clause- (a) or Clause-(b) of section-6 of the Act. The religious institutions and Endowments are defined under sub- sections 22 and 23 of Section-2 of the said Act. The above definitions clearly demonstrate that such religious institutions or Endowments are for the purpose of any service or charity for the public. Therefore, any institution registered under section 6 of the A.P. Charitable and Hindu Religious Institutions and Endowments Act is deemed to be carrying on the charitable and religious activities. The certificate of registration therefore, establishes that the Temple is a religious and charitable institution. In the case before us, since the certificate of registration with Endowments Department of the Government of A.P. is a document evidencing the creation of the Trust, we are of the opinion that the CIT(E) has erred in rejecting the application of the assessee for non- filing of the Trust Deed. In view of the same, we deem it fit and proper to set aside the order of the CIT(E) and remand the same to his file for re-consideration of the assessee s application for registration under section 12AA by taking the certificate of registration with the Endowments Department as evidence of creation of trust. - Decided in favour of assessee for statistical purposes.

Summary

Issues:
1. Rejection of application for registration under section 12AA of the Income Tax Act, 1961 based on non-submission of trust deed.

Analysis:
The case involved an appeal against the rejection of an application for registration under section 12AA of the Income Tax Act, 1961. The appellant, an ancient temple in Warangal District, was under the administrative control of the Endowments Department, Government of Andhra Pradesh. The appellant temple, registered under section 6(c)(ii) of the Endowments Act, was managed by the Executive Officer appointed by the Department of Endowments. The appellant submitted an application for registration under section 12A(1) along with the certificate issued by the Assistant Commissioner, Endowments Department. However, the application was rejected by the CIT(E) for failure to produce the trust deed. The appellant contended that being a registered temple with the Endowments Department, the certificate of registration should suffice as evidence of trust creation. The appellant cited a decision of the Madhya Pradesh High Court in support of their argument.

The Tribunal examined the definitions of religious endowments and religious institutions under the A.P. Charitable and Hindu Religious Institutions and Endowments Act, 1987. It noted that institutions registered under section 6 of the Act were deemed to be carrying on charitable and religious activities. Referring to the Madhya Pradesh High Court decision, the Tribunal held that the certificate of registration with the Endowments Department could be considered as a document evidencing the creation of the trust. Therefore, the rejection of the application by the CIT(E) for not submitting the trust deed was deemed erroneous. The Tribunal set aside the CIT(E)'s order and remanded the case for reconsideration, directing the CIT(E) to accept the certificate of registration as evidence of trust creation.

In conclusion, the appeal of the assessee was treated as allowed for statistical purposes, and the order was pronounced in the open court on 17.06.2016.