Nooral Islam Trust vs CIT

C.N. Ramachandran Nair, J.—The appeal is filed against order of the Tribunal confirming order of the CIT (Appeals) declining registration to appellants trust u/s 12AA of the Income Tax Act. We have heard Adv. Sri. P. Balakrishnan appearing for the appellant-assessee and Standing Counsel for the respondent. The appellant is a public charitable trust registered in 1998. Admittedly among other things appellants objective is running of educational institutions. The appellant applied for registration of the trust u/s 12AA of the Act. However, the application for registration was withdrawn which was granted by the department. Thereafter the appellant amended the trust deed elaborating the object clause specifically including its main object as running Dental College. When the amended deed after registration in 2005 was presented for registration u/s 12AA of the Income Tax Act, the Commissioner of Income Tax rejected the application for the reason that the original deed did not contain any provision for amendment of the deed. It is against this order of the Commissioner the assessee filed appeal which was dismissed by the Tribunal. The appellant is before us in second appeal.

After hearing both sides what we notice is that only the amended trust deed was considered for registration u/s 12AA by the Commissioner of Income Tax. The only ground on which application was turned down is the amendment carried out which is not authorised under the original deed. It is specifically stated in the Commissioners order that the provisions of the Trust Act will apply. However, the contention now raised by counsel for the appellant is that the Trust Act does not apply to Public Charitable Trust. It is further pointed out by the counsel for the appellant that u/s 92 of the C.P.C. read with Section 26 of the Specific Relief Act, 1963, the appellant is entitled to file Scheme Suit and get amendment declared valid by a competent civil court. As of now department has not assessed the Trust on any income. The objects are admittedly charitable in nature entitling the assessee to claim exemption, if the conditions of Section 11 are satisfied. Moreover, educational institutions are entitled to separate exemption on income earned by it u/s 10(23)(c) of the Income Tax Act. In any case since the assessee wants to correct a technical omission before the civil court, we feel an opportunity can be granted to the assessee to get appropriate orders from civil court. Accordingly without going into the merits of the case we allow the appeal by setting aside the order of the Tribunal and that of the Commissioner and remand the case to the Commissioner for reconsideration after giving assessee an opportunity to get orders from civil court. The assessee is granted four months time to obtain orders from the civil court and produce the same before the Commissioner. However, we make it clear that the assessee shall not be entitled to claim any exemption on ground of limitation reckoning the period of four months granted by us from today.

Matter remanded.