2009 (12) TMI 55 - HC - Income Tax

Registration of trust old provisions of Section 12A versus new provisions of section 12AA - The assessee trust came to existence on 01.12.1995 claiming that the main object was providing medical facilities to the sick and handicapped and also provide medical education, training and research in the field. The Trust filed an application in Form 10A and 10B and 12A(a) and 80G of the Act for registration of the Trust under section 12AA and exemption under section 80G(vi) of the Income Tax Act on 10.03.2006. The application for registration was belated by more than 10 years for which condonation petition was filed stating that the delay was due to ignorance of law. On verification of the Trust deed along with its enclosures, the Commissioner of Income Tax noticed that the requisite clause indicating that any amendment to the trust deed would be carried out after obtaining approval from the Commissioner of Income Tax, has not been incorporated, and on that ground directed the assessee Trust to file an amended deed, which is duly registered along with notes on the activities of the Trust with regard to various expenses debited in Income and Expenditure Account for the years ending 31.03.2003, 31.03.2004 and 31.03.2005 by 15.09.2006 positively. The assessee Trust did not respond to the letter. Therefore, the Commissioner of Income Tax held that the assessee Trust was not entitled to registration under section 12AA and exemption under section 80G(vi) of the Act ITAT allowed the appeal and remitted back the matter held that - Requisition made by the Commissioner is a extra statutory requisition. order of tribunal remitting back the order is correct.

Summary

Issues:
Appeal against order of Income Tax Appellate Tribunal regarding registration of a trust under section 12AA and exemption under section 80G(vi) of the Income Tax Act.

Analysis:
The appeal was filed against the Tribunal's order regarding the registration of a trust under section 12AA and exemption under section 80G(vi) of the Income Tax Act. The main issue revolved around whether the Tribunal was correct in setting aside the matter of granting registration to the assessee trust and directing the Commissioner of Income Tax to decide the issue in light of a previous decision of the Madras High Court, which was rendered in the context of the old section 12A, while the case of the assessee trust fell under the provisions of section 12AA introduced from 01.04.1997. The assessee trust, established in 1995, applied for registration under section 12AA and exemption under section 80G(vi) of the Act in 2006, with a belated application due to alleged ignorance of the law. The Commissioner of Income Tax directed the trust to file an amended deed, which the trust did not comply with, leading to rejection of the application. The Tribunal allowed the appeal by referring to a previous decision and set aside the rejection, prompting the current appeal.

The Court analyzed the previous decision cited by the Tribunal, which emphasized that the application for registration should be timely, and the Commissioner could not insist on certain conditions like showing that income would not be spent for religious purposes. The Court noted that an amended trust deed was not a prerequisite for registration as a trust under the Act, and the requisition made by the Commissioner was considered extrastatutory. Consequently, the Tribunal's order setting aside the rejection and remitting the issue for fresh consideration after affording a reasonable opportunity of being heard was upheld by the Court. The Court found no grounds to interfere with the Tribunal's order, stating that no question of law, especially a substantial one, arose from the Tribunal's decision. Therefore, the appeal was dismissed without costs.