9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (7) TMI 1815 - HC - Income TaxRefusing the registration u/s 12AA to the trust - necessity that the trust should be established under an instrument - Tribunal allowing the appeal of the assessee for statistical purposes - Held that - The applicable Rule 17A itself provides that it is not necessary that the Institution/ Trust should be established under an instrument. The Rule 17A does not prescribe that in case the Institution/Trust is established otherwise than under an instrument, what type of document evidencing the creation of the Trust or the establishment of the Institution, has to be filed, meaning thereby that the document evidencing the creation of Trust of the establishment of Institution could be of any type. As per the provisions of the Indian Trust Act, the trust can be created even orally and if the assessee is able to give some evidence of creation of such Trust by a word of mouth, the same shall be eligible for registration u/s 12AA/12A of the Act, provided such evidence is filed and the other conditions under the statute are satisfied. Following the decision of HC 2016 (9) TMI 307 - DELHI HIGH COURT , decided against the Revenue.
Issues:
1. Challenge to Tribunal's judgment allowing the appeal of the assessee. 2. Substantial questions of law framed by the appellant. 3. Interpretation of Rule 17A regarding the establishment of a trust under an instrument. 4. Delhi High Court's confirmation of the judgment and observations regarding the creation of a trust without a formal deed. 5. Examination of the charitable nature of the trust's objects and purposes. 6. Consideration of whether the trust's benefits for a particular community affect exemption and registration. 7. Analysis of whether the trustee meeting basic needs from trust funds violates Section 13 of the Act. Issue 1: The appellant challenged the Tribunal's judgment allowing the appeal of the assessee. Issue 2: The appellant framed substantial questions of law regarding the Tribunal's decision. These questions included whether the ITAT was justified in setting aside the order under Section 12AA, whether the trust needed to be established under an instrument, and whether the trust was legal under the Rajasthan Public Trust Act. Issue 3: The Tribunal interpreted Rule 17A, stating that it is not necessary for a trust to be established under an instrument for registration under Section 12AA/12A of the Act. The Rule allows for filing documents evidencing the creation of the trust in various forms, including orally, as long as the conditions under the statute are met. Issue 4: The Delhi High Court confirmed the judgment, highlighting that a formal deed of trust was not necessary for registration under Section 12A/12AA of the Act. The Court agreed with the ITAT's findings regarding the charitable nature of the trust's objects and purposes, emphasizing that the income application issue arises only when filing a return. Issue 5: The ITAT examined the charitable nature of the trust's objects and concluded that they were indeed charitable. It was clarified that the trust's benefits for a specific community did not disqualify it from exemption and registration under Section 12AA/12A. Issue 6: Regarding the trustee meeting basic needs from trust funds, the ITAT correctly held that this action did not violate Section 13 of the Act, especially when the trustee did not derive monetary benefits from the trust. The Court concurred with this interpretation, emphasizing that Section 13 does not debar trustees from meeting basic needs from trust funds. In conclusion, the High Court dismissed the appeal, finding the Tribunal's view just and proper, with no substantial question of law arising.
|
