HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR. .. D.B. Income Tax Appeal No. 171/2018. Commissioner of Income Tax-Exemption, Jaipur ----Appellant Versus Shri Narsinghji Ka Mandir, Gandhiyon Ki Gali, City Police, Jodhpur. ----Respondent Connected With D.B. Income Tax Appeal No. 2/2016. Commissioner of Income Tax (Exemptions), Jaipur ----Appellant Versus Shri Agarwal Panchayat, Shree Agresen Bhawan, Venketesh Marg, Pali Marwar, Pali. ----Respondent For Appellant(s) : Mr. K.K.Bissa. Mr. G.S.Chouhan. For Respondent(s) : Mr. Falgun Buch. Mr. Prateek Gattani. HON'BLE CHIEF JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE ASHOK KUMAR GAUR Order 05/09/2019 Income Tax Appeal No. 171/2018: question of law framed in this appeal by Revenue is as follows:- Whether Income Tax Appellate Tribunal under order dated 07.09.2015 is justified in accepting assessee s claim for registration as per provisions of Section 12AA of Income Tax Act, 1961 irrespective of fact that Constitution/Bye-laws of Trust (Downloaded on 07/09/2019 at 03:11:46 PM) (2 of 5) [ITA-171/2018] is not having any provision in relation to disbursement of balance funds in eventuality of dissolution of Trust ? Brief facts of case are that establishment of Narsinghji Ka Mandir, Gandhiyon Ki Gali, Jalori Gate, Jodhpur applied for registration under Section 12-A of Income Tax Act and sought exemption. Commissioner of Income Tax sought for certain details and information and applicant produced copy of Trust Deed and other relevant materials. CIT (Exemption) denied benefit of registration and consequently, exemption under Section 12-A on sole ground that in contingency of dissolution (of Trust), devolution and division of property have not been provided for. Commissioner was of opinion that use of property as Trust had to be protected, and in event of its dissolution too, without adequate provision for that purpose, assets could be dissipated. applicant Trust urged that it was old establishment and Temple was historical one. Trust was duly registered with Devasthan Department in 1975 and had duly complied with all other provisions and stipulations spelt out in Section 12-A. It was emphasized that dissolution of Trust was uncertain future event and absence of any condition to care for it, could not be valid ground for rejection of application. By impugned order, ITAT allows assessee s appeal holding as follows:- 4. We have considered facts of case and rival submissions. Section 11 provides exertion to all trust and other institutions carrying on charitable or religious activities. appellant is trust carrying (Downloaded on 07/09/2019 at 03:11:46 PM) (3 of 5) [ITA-171/2018] out religious activities. precondition for grant of registration under s.12AA is that objects are charitable or religious in nature and activities are genuine. society is maintaining temple, which is genuine activity. learned CIT has also not referred to any material to show that activities are not genuine. For future uncertain even which may occur or may not, and for purposes of dissolution benefit of registration cannot be denied. This is also no clause that in event of dissolution property of trust would be given to any particular person or interested specified persons. assessee applied for its registration, to which it was entitled. We are of view that under circumstances, it has to be registered. learned CIT is directed to grant registration to society. relevant determinative factor for conferring registration is object of society. In view of above we reverse order of CIT and direct it to grant registration under s.12A of Act. certificate of registration is only enabling provision to claim exemption. Even if registration is granted, exemptions from provisions of IT Act in particular sections 11 and 12 is not automatic. It is only when assessee satisfies requirement of s.13, he would be eligible for exemption. In view of above we direct to grant registration u/s 12A of Act. Revenue reiterates its grounds in support of appeal. It contends that Trust Deed does not contained any dissolution clause. It is highlighted that in event of provision for dissolution, manner in which, residue of property and balance of funds are to be utilized, is matter of public interest. In absence of any such clause, there would be no check on potential mis-utilization of funds. This Court is of opinion that absence of dissolution clause or condition as rightly contended by assessee, is uncertain future event. Further-more, given that property is vested in public charitable trust, it is always open to concerned party including Revenue, to approach Civil (Downloaded on 07/09/2019 at 03:11:46 PM) (4 of 5) [ITA-171/2018] Court for remedy under Section 91-92 of Code of Civil Procedure. In these circumstances, question of law, as framed, is answered in favour of assessee and against Revenue. appeal is accordingly dismissed. D.B. Income Tax Appeal No. 2/2016: question of law in this case is same as one framed in D.B. Income Tax Appeal No. 171/2018 : CIT (Exemption) Vs. Narsinghji Ka Mandir. In course of judgment in said appeal, question has been answered in favour of assessee and against Revenue. Further-more, Court noticed situation contemplated by Commissioner of Income Tax (Exemption), has now taken care of in any way under Section 115(TD)(c) brought into force w.e.f. 1 st June, 2016 and same reads as follows:- Section 115(TD)(c): (1) Notwithstanding anything contained in this Act, where in any previous year, trust or institution registered under Section 12AA has- (a) . .. . (b) . . (c) failed to transfer upon dissolution all its assets to any other trust or institution registered under section 12AA or to any fund or institution or trust or any university or other educational institution or any hospital or other medical institution referred to in sub- clause(iv) or sub-clause(v) or sub-clause(vi) or sub- clause (via) of clause (23C) of section 10, within period of twelve months from end of month in which dissolution takes place, (Downloaded on 07/09/2019 at 03:11:46 PM) (5 of 5) [ITA-171/2018] For reasons spelt out in judgment in Narsinghji Ka Mandir (supra) and having regard to Section 115 (TD)(c), this appeal too has no force. question of law, as framed, is answered in favour of assessee and against Revenue . appeal is dismissed. (ASHOK KUMAR GAUR),J (S. RAVINDRA BHAT),CJ 23-24-Mohan/- (Downloaded on 07/09/2019 at 03:11:46 PM) Powered by TCPDF (www.tcpdf.org) Commissioner of Income-tax-Exemption, Jaipur v. Narsinghji Ka Mandir