Uday S. Jagtap 766-17-ITXA-34=.doc IN HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO. 766 OF 2017 Commissioner of Income Tax (Exemption) .. Appellant v/s. Manekji Mota Charitable Trust .. Respondent Mr. Ashok Kotangle I/b Padma Divakar for appellant None for respondent CORAM : M.S. SANKLECHA & NITIN JAMDAR, J.J. DATED : 16th AUGUST, 2019 P.C. 1. This appeal under Section 260A of Income Tax Act, 1961 (the Act) challenges order dated 22nd August, 2016 passed by Income Tax Appellate Tribunal (Tribunal). impugned order dated 22nd August, 2016 reversed order dated 21st February, 2013 of Director of Income Tax (Exemption) and granted Registration under Section 12A of Act. 2. Revenue has urged following questions of law for our consideration : 1 of 4 ::: Uploaded on - 19/08/2019 ::: Downloaded on - 20/08/2019 10:26:14 ::: Uday S. Jagtap 766-17-ITXA-34=.doc (i) Whether on facts and in circumstances of case and in law, Tribunal was right in overlooking fact that in absence of Dissolution Clause in Trust Deed, net assets of Trust on its dissolution would be transferred to any entity / distributed among trustees thus defeating very purpose of registration u/s 12AA of I.T. Act, 1961? (ii) Whether on facts and in circumstances of case, Tribunal was right in law by overlooking facts that assessee had incurred 29% out of its gross receipt towards religious activities which substantially higher than allowable i.e. 5% as per I.T. Act for religious purpose 3. Regarding question no.(i) : (a) Mr. Kotangle, learned Counsel appearing in support of appeal states that impugned order allowed respondent s appeal by placing reliance upon decision of its co ordinate bench in case of Geeta Lalwani Foundation Vs. Commissioner of Income Tax (Exemption). Mr. Kotangle, fairly states that Revenue being aggrieved by above order of Tribunal had preferred appeal to this Court being Income Tax Appeal No.91 of 2016 (Commissioner of Income Tax (Exemption) Vs. Geeta Lalwani 2 of 4 ::: Uploaded on - 19/08/2019 ::: Downloaded on - 20/08/2019 10:26:14 ::: Uday S. Jagtap 766-17-ITXA-34=.doc Foundation). This Court by order dated 3 rd July, 2018 dismissed above Appeal on identical question as framed herein. (b) Thus, for reasons indicated in order dated 3 rd July, 2018 in Geeta Lalwani Foundation (supra), question no.(i) as proposed herein does not give rise to any substantial question of law. Thus, not entertained. 4. Regarding question no.(ii) : (a) Director of Income Tax (Exemption) rejected petitioner's application for registration under Section 12A of Act on ground that 29% of its gross receipts were expended on making donations for religious purposes. This activity of making donations for religious purposes was not in accordance with objects of Trust. This led Director of Income Tax (Exemption) to doubt genuineness of Trust and, therefore, rejected application for registration by order dated 21 st February, 2013. (b) Being aggrieved with order dated 21 st February, 2013 of Director of Income Tax (Exemption), respondent preferred appeal to Tribunal. 3 of 4 ::: Uploaded on - 19/08/2019 ::: Downloaded on - 20/08/2019 10:26:14 ::: Uday S. Jagtap 766-17-ITXA-34=.doc (c) In appeal, Tribunal in impugned order noted fact that at time of registration of Trust, question of application of income of Trust is premature. These are issues which are appropriately dealt with during assessment proceedings while considering application of Section 11 of Act. Thus, allowed appeal. (d) We note that undisputedly 71%of receipts of Trust are being spent in accordance with its objects. Therefore, this itself would establish that Trust is in existence. partial expenditure which is not authorized by Trust would not be itself lead to Trust becoming non genuine. consequence would be that benefit of Section 11 of Act will not be available to that extent. At stage of registration, this issue is premature. (e) Accordingly, questions no.(ii) as proposed does not give rise to any substantial question of law. Thus, not entertained. 5. Accordingly, appeal is dismissed. (NITIN JAMDAR, J.) (M.S. SANKLECHA, J.) 4 of 4 ::: Uploaded on - 19/08/2019 ::: Downloaded on - 20/08/2019 10:26:14 ::: Commissioner of Income-tax (Exemption) v. Manekji Mota Charitable Trust