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TMI Blog2004 (5) TMI 251X X X X Extracts X X X X X X X X Extracts X X X X ..... Oct., 1989. The basic aim and object of the trust was religious for the purpose of Digambar Jain Society and for their religious, cultural and social upliftment. As per clause No. 5 of the trust deed it was also the duty of the trust to protect and manage the entire movable and immovable properties of the temple and whenever necessary to extend and renovate the same from time to time. Vide clause No. 12 of the deed, the trustees were also empowered to constitute other rule, aim or planning for the progress of the trust. Vide clause No. 13 it was made clear that neither the trustees nor any other person will have any personal right over the movable or immovable property of the trust, nor would they be able to use the property of the trust for their personal benefit but they will have their right on these properties in the capacity of trustees only. Some amendment in the objects and in the procedures related to trustees were made by the trustees on 31st Oct., 1989 and the amended trust deed was got registered on 20th Nov., 2001 under the provisions of "Madhya Pradesh Lok Nyas Adhiniyam, 1951". In this amended trust deed a new provision was introduced that other persons will have als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... format nor had it applied to the learned CIT having jurisdiction for the same. It was applied before the learned CIT at Ujjain whereas the jurisdiction was lying with the learned CIT, Bhopal. The learned CIT was further of the view that there was no question of granting registration w.e.f. 26th Sept., 1956 to 20th Nov., 2001. Because the assessee had not furnished sufficient reason for moving application after one year from the date 1st July, 1973. So far the rejection of application for registration w.e.f. 20th Nov., 2001, is concerned, the same has been denied on the basis already discussed hereinabove. 5. The learned Authorised Representative in support of the ground submits that the trust deed was executed and registered with the Registrar Trusts, in the same year which was notified in the public gazette. On 14th Dec., 1998, an application for registration was filed before the learned CIT, Bhopal, along with a letter addressed to the Asstt. CIT (Inv.), Ujjain. The learned Asstt. CIT issued a letter on the application dt. 22nd Dec., 1998, and asked for certain information which was complied with. The learned Authorised Representative points out that at that time the directions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the learned Authorised Representative submits that the property was sold on the fair value. The guidelines of 1998 were adopted for registration and the same is not a real value of the property as held by various Courts. The selling of the property was in the interest of the trust since the property was let out to one Shri Madan Mohan Joshi, an advocate, @ Rs. 41 per month on 19th March, 1969 vide an agreement. It was decided by the trustees that the property be sold and, accordingly, best possible efforts were made to sell on the available price in the market but could not succeed since it was a tidious job to get the property vacated from an advocate tenant. In these circumstances, the property with tenant in occupation was sold to three persons stated to be trustees and their relatives at the total price of Rs. 4 lakhs. An agreement was entered into and advance was received in the months of September and November, 1991, then part payment was received in 1993, 1994 and 1995. These funds were received through account payee cheques and with these funds as per the trust resolution, a new property adjoining the temple was constructed. The money received in instalments were utilised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the learned CIT and submits that the trust is for the benefit of specific community. He submits that the amendment in the original trust deed is not permissible and cites the following decisions: 1. CIT vs. Ramaswamy Iyer 2. CED vs. K.A. Kadar 3. CIT vs. J.K. Charitable Trust, and 4. CIT vs. Palghat Shadi Mahal Trust The learned Departmental Representative cites further the judgment of the Hon ble Supreme Court in the case of Trustees of the Charity Fund vs. CIT (1959) 36 ITR 513 (SC) and submits that even private religious trust was taxable before the amendment w.e.f. 1st April, 1962. He also refers the order of this Bench of the Tribunal in the case of Dhakad Samaj Dharamshala vs. CIT (ITA No. 468/Ind/2003, dt. 24th Nov., 2003). 6.1 The learned Authorised Representative submits in rejoinder that if it would have been a private trust, then the beneficiary clause must have been there. He also refers pp. 91 and 92 of the paper book and submits that computation of income therein was not made as a private trust during the asst. yrs. 1984-85 and 1985-86. He refers the contents of pp. 41 to 48 of the paper book and submits that a detailed reply was filed on behalf of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lication dt. 28th Sept., 1998 for registration under s. 12A(a) supports the claim of the assessee that the application for registration was filed with Form No. 10A since in case of non-filing of the same, a defect should also have been pointed out by the Department in their letter dt. 22nd Dec., 1998, addressed to the assessee. 8. The learned CIT has rejected the request of the assessee to grant registration under s. 12A(a) of the Act w.e.f. 26th Sept., 1956 to 20th Nov., 2001, on the basis that the assessee has not shown reason for not furnishing the application for the same within the one year from the prescribed dt. 1st July, 1973 nor had the permission taken under r. 14 of the M.P. Lok Nyas Adhiniyam, 1951, for selling the property and the Registrar Trusts, has also registered it on 20th Nov., 2001. The contention of the assessee remained that the trust was originally created on 26th Sept., 1956 and was registered on the same date. Therefore, it cannot be said that the said trust was again registered on 28th Nov., 2001 but certain amendments made therein vide trust deed dt. 30th Oct., 1989 were got registered on 28th Nov., 2001. Accordingly, it was submitted to consider the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e trust deed, but had the effect of altering the object of the trust deed which could be done only by means of an amendment of the trust deed by the settlors, whereas in the present case before us the amendments in the trust deed have been made and registered with the Registrar of Trusts after 33 years of creation of the trust. We, thus, do not find substance in one of such basis of rejection of registration by the learned CIT. 10. So far as the allegation of selling of the old property situated at 25, Abbas Tayyab Ali Ward No. 3, Barnagar, to the trustees and their relation is concerned, we agree with the contention of the assessee that any immovable property with tenant has no potential to fetch proper market value and further that the guidelines are meant for the purpose of registration and the same cannot be taken as real value of the property. The transaction of sale was authorised by the trust resolution and the purchaser had all the right to get the property registered in different names. As discussed above, the tenant in the property was an advocate occupying the premises since 19th March, 1969 vide an agreement at the monthly rent of Rs. 41, i.e., Rs. 492 per year. A res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of a trust is to enquire into the nature of the trust and the CIT must make a clear distinction between the requirement of registration and the requirements for claiming tax benefit. The latter clause falls squarely to be considered by the AO. It was further held by the Hon ble Court that s. 12A neither makes registration of trust a condition precedent for claiming benefit under ss. 11 and 12 r/w s. 13 nor does registration obviate enquiry into the conditions envisaged under s. 13 by the Act before the tax benefit can be allowed. 13. We also find substance in the contention of the assessee that the trust created before commencement of 1961 Act for upliftment of a particular religious community will not come within the prohibition provided under s. 13(1)(b) of the Act which is also supported by the judgment of the Hon ble M.P. High Court in the case of CIT vs. Maheshwari Agrawal Marwari Panchayat relied on by the learned Authorised Representative. In the present case, there is no dispute that the trust was created and registered in the year 1956, i.e., well before s. 13(1)(b) of the Act coming into force in the year 1961. 14. In view of the aforesaid discussion and the finding ..... X X X X Extracts X X X X X X X X Extracts X X X X
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