Commissioner of Income Tax vs R.M.S. Trust

K. Raviraja Pandian, J.—The revenue is on appeal against the order of the Tribunal Chennai "D" Bench dated 6-11-2008, made in I. T. A. No. 2209/Mds/2006, by framing the following substantial question of law:

Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in setting aside the matter of granting registration to the Assessee-trust to the file of the Commissioner of Income Tax with a direction to decide the issue in the light of the decision of the Madras High Court in New Life in Christ Evangelistic Association Vs. Commissioner of Income Tax and Another, , without noticing that the said decision was rendered in the context of the old Section 12A, whereas in the case of the Assessee-trust the provisions of Section 12AA introduced from 1-4-1997 were applicable

The facts: The Assessee-trust came into existence on 1-12-1995, 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 u/s 12AA and exemption u/s 80G(vi) of the Income Tax Act on 10-3-2006. 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 the income and expenditure account for the years ending 31-3-2003, 31-3-2004 and 31-3-2005 by 15-9-2006 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 u/s 12AA and exemption u/s 80G(vi) of the Act. The application was rejected. On appeal before the Tribunal by the Assessee, the Tribunal after referring to the decisions of this Court in the case of New Life in Christ Evangelistic Association Vs. Commissioner of Income Tax and Another, allowed the appeal. The correctness of the same is now canvassed by filing this appeal.

We heard the learned Counsel appearing for the department and perused the materials available on record.

In the above referred to decision in the case of New Life in New Life in Christ Evangelistic Association Vs. Commissioner of Income Tax and Another, , the condition precedent mentioned for registration u/s 12A is stated and held that the application for registration should be made in time and accounts of institution should be audited and inquiry into objects of institution cannot be made u/s 12A of the Act. It was further held that at the stage of enquiry, the Commissioner could not insist upon the society showing that its income was not going to be spent for religious purposes. The amended trust-deed is not a pre-requisite, as required by the Commissioner of Income Tax and it is not also not a pre-requisite condition for registering the applicant as a trust as per the provisions of the Act. The requisition made by the Commissioner is an extrastatutory requisition. Hence, the Tribunal, by reason of the impugned order, had set aside the rejection made by the Commissioner of Income Tax and remitted to decide the issue afresh after affording a reasonable opportunity of being heard.

We do not find any ground to interfere with the order of the Tribunal. No question of law, much less a substantial question of law arise out of the order of the Tribunal. The appeal is dismissed. No costs.