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TMI Blog2019 (2) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... in the trust deed and for charitable purposes. As clearly demonstrated by the Appellant that before to establishing the 'Bhawan' the Appellant has not carried out any activity due to paucity of funds, which in our considered view seems to be logical reason for not carrying out any activity previously, hence this ground of rejection can not sustain. in the instant case new trustees have been appointed in place of erstwhile trustees who have died, by the board of trustees and therefore situation clearly seems to be covered by sub clause (a) of section 73 of the Indian Trusts Act and in our opinion there is no embargo and impediment in appointment of new trustees, except as specified in section 73 of the Act, which otherwise is not applicable to the instant case, hence we are of the considered view that new trustees have been appointed in accordance of law. It is seen that a supplementary trust deed has been submitted to the sub-registrar, Ludhiana. Whether the same has been registered and whether the Sub-Registrar is competent to do the same in the case of Public Charitable Trust has not been evidenced. The components of the trust deed (till the amendments are accep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation on dated 14.10.2016 for registration u/s 12A of the Income Tax Act, 1961 (hereinafter called as the Act ) before the Ld. CIT(E), Chandigarh, which was taken into consideration and opportunity of hearing was given to the Appellant on 17.04.2017, however, the same was not availed and sought adjournment, thereafter, the case was again re-fixed on 24.04.2017. The Ld. CIT(E) sought certain clarification/ documents from the Appellant as mentioned in para no.4 of the impugned order, in response to which the Appellant vide its reply dated 25.04.2017 replied the queries by clarifying the issues raised as well as by submitting the relevant documents thereto. After consideration of the reply, the Ld. CIT(E) rejected the application u/s 12AA of the Appellant. Dissatisfied, the Appellant preferred this appeal. 4. We have heard the parties at length and perused the material available on record. As per trust deed, the aims and objects of the Appellant/Society are as under: The aims and objects of the trust is that the Trust fund shall be held by the Trustees upon the Trust to apply the same or any portion thereof without any discrimination of caste creed and religion, sex or an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l books, agriculturist supplies and implements or otherwise to or for the benefit of persons or organizations who are either suffering or are pledged to fight hunger and disease. k) To purchases, store and maintain articles of furniture and utensils of general public utility and lend the same to the needy persons at the time of marriage and/or any other occasion. l) To grant aid to poor persons. m) To help or grant aid for such public charitable objects as the trustees in their discretion may think proper. n) To do all other acts, deeds and things as may be necessary or deemed expedient to carry out all or any of the objects aforesaid. o) To donate or contribute to public charitable trusts, Institutions or organizations for charitable purposes as define in Section 2(15) of the Income-tax Act, 1961 or any statutory modification on or re-enactment thereof for the time being in force provided that he same is covered under the objects of these presents. 4.1. It was submitted by the Ld. AR of the Appellant that the trust was registered in the office of the Sub-Registrar, Ludhiana in the year 1979 and thereafter, purchased a small piece of land by donations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hall and ₹ 750/- for per room per day . From clause-'f' of objects of the trust deed, it reflects that trust is formed to establish or promote the establishment of and/or render aid to Dharamshala, Auditoriums, Prayer Homes, Musafarkhanas, Pravachan places and such other institutions which may be necessary and useful for the public. Further from clause-'d' of the objects, it reflects that the trust has been established to acquire, maintain and/or grant aid to hospitals, medical schools, Medicals Colleges, Nursing Institutions, Sanitariums, Travelling dispensaries, poor care clinic or such other similar institutions for the use and benefit of the public. From the objects it is clear that the trust has been formed for various objects inter-alia to establish Dharmshala etc. and to establish, acquire, maintain and/or grant aid hospitals, poor care clinic etc. which covers the running Dharmshala which is called as 'Bhawan'. Even from the photo graphs attached with the (PB pages 110 to 116) it clearly reflects that the assessee is carrying social, spiritual and charitable activities by operating homeopathy dispensary and organizing camp for blood donation a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ees have been newly introduced in one go. The reasons espoused that it was to replace those who had died clearly are pointers towards a planning at this (despite its creation in 1979) to seek exemption. 4.6 Specific query was raised to the Ld. A.R., qua registration of the dissolution clause, introduction of new trustees and registration of supplementary trust deed, who although submitted some material downloaded from the internet but could not specify exact position, however Ld. DR Sh. Alok Kumar with all fairness, assisted the Court. 4.7 In this case, some of the trustees died and in place of them, new trustees have been appointed by executing supplementary trust deed on dated 27-03-2014, which was got registered (vide registration no 2931, Register no. 1, Book no 0, Page no. 0) on dated 28-05-2014 in the office of the Sub Registrar (East) Ludhiana. 4.8 The first question arises as to whether the new trustees can be appointed. Section 73 and 74 of Indian Trusts Act 1882, enumerated the discharge of trustee(s) and appointment of new trustee(s). For ready reference provision are reproduced herein below:- 73. Appointment of new trustees on death, etc.- Whenever any per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will promote or impede the execution of the trust; and (d) where there are more beneficiaries than one, to the interests of all such beneficiaries. 4.9 According to section 73 of the Indian Trusts Act, any person appointed a trustee disclaims, or any trustee, either original or substituted, dies, or is for a continuous period of six months, absent from [India] or leaves [India] for the purpose of residing abroad, or is declared an insolvent, or desires to be discharged from the trust, or refuses or becomes, in the opinion of a principal Civil Court of original jurisdiction, unfit or personally incapable to act in the trust, or accepts an inconsistent trust, new trustee can be appointed in his place, firstly by the person nominated for that purpose by the instrument of trust (if any) or secondly if there be no such person, or no such person able and willing to act, the author of the trust if he be alive and competent to contract, or the surviving or continuing trustees or trustee for the time being, or legal representative of the last surviving and continuing trustee, or (with the consent of the Court) the retiring trustees, if they all retire simultaneously, or (with the like ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection of the Indian Registration Act 1908. For the sake of clarity and ready reference the relevant provisions are reproduced herein: PART III OF REGISTRABLE DOCUMENTS 17. Documents of which registration is compulsory.- (1) The following documents shall be registered, if the property to which they relate is situate in a district in which, and if they have been executed on or after the date on which, Act No. XVI of 1864, or the Indian Registration Act, 1866 (20 of 1866), or the Indian Registration Act, 1871 (8 of 1871), or the Indian Registration Act, 1877 (3 of 1877), or this Act came or comes into force, namely:- (a) Instruments of gift of immovable property; (b) other non-testamentary instruments which purport or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immovable property; (c) non-testamentary instruments which acknowledge the receipt or payment of any consideration on account of the creation, declaration, assignment, limitation or extinction of any such right, title or interest; (d) leases o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts are accepted by the competent Court the documents submitted to project that dissolution clause has been introduced. However, the apparent reason why its case was dismissed earlier, the same are not legally tenable. It is seen that a supplementary trust deed has been submitted to the sub-registrar, Ludhiana. Whether the same has been registered and whether the Sub-Registrar is competent to do the same in the case of Public Charitable Trust has not been evidenced. The components of the trust deed (till the amendments are accepted by the competent Court) are held to be restrictive and to that extent not enduring to the benefit of the general public, seems to be general remarks without considering the intricacies of the law and therefore the reasons are illogical, hence, we are not inclined to accept this ground of rejection also. In over all circumstances and cumulative effect, we are inclined to grant the registration to the Appellant trust and hence direct the Ld. CIT(E) to grant the registration u/s 12AA of the Act, however, it is clarified that the Ld. CIT(E) while granting the registration, shall be at liberty to endorse the condition, if any, he find to be reasonable in accor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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