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TMI Blog2009 (11) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner-Trust collectively after passing of the impugned order have not been considered by the Commissioner – matter referred back to CIT – decided in favor of assessee - 10141 of 2004(O&M) - - - Dated:- 13-11-2009 - Appealant through Mr.Sanjiv Bawam CORAM:- HON 'BLE MR. JUST ICE M.M.KUMAR HON 'BLE MR. JUST ICE JASWANT SINGH Present: Mr.A.M.Punchi, Advocate, for the petitioner. Mr.Vivek Sethi, Advocate, for the respondent. M.M.KUMAR, J. The instant petition filed under Article 226 of the Constitution by S. Tirath Singh Lalvani Educational Foundation, Kapurthala (for brevity "petitioner-Trust") challenges order dated 30.09.2003 (Annexure P-11), passed by the Commissioner of Income Tax, Jalandhar-II, declining the request of the petitioner-Trust for exemption under Section 80-G of the Income Tax Act, 1961. A further prayer for issuance of direction to the respondent to allow registration and exemption to the petitioner-Trust under Section 80-G(5)(vi) of the Income Tax Act has also been made. Brief facts of the case, which have lead to the file of the instant petition, are that the petitioner-Trust was duly registered under the Societies Regi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... way of dividends, bonus or otherwise by way of profits to the Trustees or any person claiming through them. In para 26 of the Deed, everything has been put beyond doubt in the event of dissolution of the Trust. The assets of the Trust are not to be distributed amongst the Trustees but the same are required to be handed over to any other Trust, Society or Institution, professing objects similar to those of the petitioner-Trust and enjoying exemption under Section 80-G of the Income Tax Act. The petitioner-Trust in terms of its charitable objects had submitted application for grant of registration under Section 12-AA of the 1961 Act to the Commissioner of Income Tax, Jalandhar-II. The Commissioner after considering and satisfying himself that the Trust has been created and constituted for charitable purpose and that infact the activities of the Trust were commensurate and in consonance with its charitable objectives allowed the registration of the petitioner-Trust under Section 12-AA (1)(b)(i) of the Income Tax Act. The order dated 28.08.2002 registering the petitioner-Trust has been placed on record as Annexure P-3. Accordingly, the petitioner-Trust has been filing its income tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers (Annexure P10). The petitioner-Trust has claimed that the respondent has wrongly doubted the genuineness of the funds contributed to the creation of the Trust and on that basis has rejected its application. The operative part of the impugned order dated 30.09.2003 (Annexure P-11) reads as under:- "------- This object is capable of being treated as an independent object and cannot be said to be for charitable purpose. This clause has the effect of permitting the trustees to carry on the activity for profit and give unfettered discretion to the trustees to spend the funds of the trust on the purchase/sale of immovable property, whether they are charitable or noncharitable. The trustees have the discretion to utilize the funds of the trust for any of the objects, including the non-charitable ones. As these objects themselves are an activity for profit, hence the assessee falls outside the scope of Section 2 (15) of the Act and the benefit of the exemption cannot be allowed. Further, as discussed above, the trust has violated the provisions of Section 13 of the I.T. Act by making expenditure on the stay of the trustees and the other guests in Radisson Hotel, Jalandhar. These expe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch a transaction which are required to be proved namely the identity of the creditors and the genuineness of the loan transaction and both the components have remained unsubstantiated. It appears that the document dated 24.10.2003 (Annexure P12) issued by the bank of America alongwith further detail appended as Annexure P1 and photo copy of the cheques as well as the document issued by BNP Paribas tendered explained with regard to the source of funds, the bank account from which the funds have come from alongwith further details so these documents were not on record and were duly considered by the Commissioner of Income Tax then she passed order dated 30.09.2003 (AnnexureP11). It is in the aforesaid facts and circumstances that the validity of the impugned order dated 30.09.2003 (Annexure P11) is required to be determined. Mr.A.M.Punchi has argued that the first ground constituting the basis of the impugned order may require a re-look in view of the details, which have now been placed on record of this petition in the form of information by the Bank of America dated 24.10.2003 (Annexure P12) as well as by the BNP Paribas, Hansalaya, 2nd Floor, Barakhamba Road, New Delhi (Annex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been made for the benefit of the trustee in the sense that they have been unduly showered with luxuries or external expenses have been incurred on them for their private visits. It is only to facilitate their visit to the country so as to enable them to attend the meeting of the Trust. Mr.Vivek Sethi, learned counsel for the respondent has made an attempt to furnish legal justification of the impugned order. However, he has not been able to propose the primary submission made by learned counsel for the petitioner-Trust which is to the effect that the matter requires re-look as the various documents produced by the petitioner-Trust collectively attached as Annexure P12 after passing of the impugned order have not been considered by the Commissioner. Having heard learned counsel for the parties and perusing the paper book with their able assistance, we are of the view that the prayer made by the learned counsel for the petitioner deserves to be accepted which would meet the end of justice if the matter is remitted back on the file of the Commissioner of Income Tax, Jalandhar-II for decision afresh after taking into account the documents attached as Annexure P12 (collectively). ..... X X X X Extracts X X X X X X X X Extracts X X X X
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