TMI Blog2014 (4) TMI 821X X X X Extracts X X X X X X X X Extracts X X X X ..... ucational and Charitable Trust and issuance of registration u/s 12AA is a primary condition for the start of the charitable activity of the trust, therefore its case has to be decided on priority basis - Decided in favour of Assessee. - ITA No. 431/Rjt/2013 - - - Dated:- 22-11-2013 - T. K. Sharma, J. For the Appellant : J.C. Ranpura For the Respondent : Dr. M.L. Meena ORDER:- This appeal by the assessee is against the order dated 25.10.2013 of Commissioner of Income-tax, Jamnagar refusing the registration u/s 12AA of the Income-tax Act, 1961. 2. The facts, in brief, are that the assessee-trust was created on 18.09.2012. It is registered u/s 25 of the Companies Act, 1956 with Registrar of Companies vide registration No.U80903GJ2012NPL072004 dated 18.09.2012. The trust has made an application for registration u/s 12A(a) of the Income-tax Act, 1961 on 22.04.2013. On verification of the application, the ld Commissioner of Income-tax, Jamnagar observed that this entity is registered under section 25 of the Companies Act, 1956 in the status of company and not as a trust. Moreover, the memorandum of association does not contain provisions to the effect that upon its di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore this Tribunal, on the following grounds: "1. The grounds of appeal mentioned hereunder are without prejudice to one another. 2. The learned Commissioner of Income Tax, Jamnagar [hereinafter referred as to the "CIT"] erred on facts as also in law in rejecting the application for registration u/s 12A(a) of the Act alleging that the memorandum of association does not contain provisions in the event of its dissolution to the effect that upon the dissolution, if any property remains after satisfaction of its debts and liabilities, the same shall be transferred to the trust having similar objects. 3. The learned CIT erred on facts of registration of appellant is under section 25 of the Companies Act, 1956 and failed to distinguish difference between trust registered under Bombay Public Trust Act, 1950 and Licensed Company u/s 25 of the Companies Act, 1956. 4. The Learned CIT erred on the facts that dissolution of section 25 company is part of Articles of Association and rejected registration u/s 12A(a) of the Act based on Memorandum of Association without considering the fact that company is managed by members only. 5. Your Honours' appellant crav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... meaning of section 12AA of the Income-tax Act, 1961. In support of this, the ld counsel of the assessee relied upon the judgment of the Hon'ble Punjab Haryana High Court in its judgment case of CIT v. O.P. Jindal Global University , wherein it was held that the body corporate registered u/s 25 of the Companies Act, 1956 is also entitled for registration u/s 12AA of the Income-tax Act, 1961. 5. With regard to the objection of ld Commissioner of Income-tax, Jamnagar in the impugned order regarding the dissolution clause, the ld counsel of the assessee drew my attention to Clause X of Memorandum of Association on page 5 and clause 52 of Articles of Association on page 10 which clearly mentioned the conditions of winding up / dissolution, which reads as under: "If upon winding up or dissolution of the company there remains, after satisfaction of all the debts and liabilities any property whatsoever the same shall not be distributed amongst the members of the company but shall be given or transfer to such other company having object similar to the objects of this company, to be determined by the members of this company at or before the time resolution or in default in thereo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order to do public charity, any one association is to be registered as society or trust and therefore direct the Commissioner of Income-tax the grant registration under Section 12AA of the Act to the assessee. He further relied upon the judgment of Hon'ble Bombay High Court in the case of CIT v. APMC reported in 291 ITR 419 (Bom), wherein it was held that there is no requirement under the Act that any institutions constituted for advancement of any object of public utility must be registered as a trust. The ld counsel of the assessee submitted that, merely because of the assessee association is registered as company u/s 25 of the Companies Act, it cannot be a ground to refuse registration u/s 12AA of the Act; therefore the ld CIT was not justified in rejecting the application for registration u/s 12AA of the Act. 8. On the other hand, Dr M L Meena, DR, appeared on behalf of the Revenue vehemently supported the order of ld Commissioner of Income-tax, Jamnagar. The ld Departmental Representative pointed out that on the basis of submissions made before the ld Commissioner of Income-tax, in the impugned order he refused to grant the registration u/s 12AA of the Income-tax Act, 1961; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hall not be distributed amongst the members of the company but shall be given or transfer to such other company having object similar to the objects of this company". For this purpose, the assessee shall produce original Memorandum and Articles of Association of the Institution to the ld Commissioner of Income-tax, Jamnagar who will verify the object clause and if upon verification he found that the object clause contained in the aforesaid winding up or dissolution clause, in that event he will grant the registration to the assessee-trust u/s 12AA of the Income-tax Act, 1961. The assessee is an Educational and Charitable Trust and issuance of registration u/s 12AA is a primary condition for the start of the charitable activity of the trust, therefore its case has to be decided on priority basis. I, therefore, direct the assessee-trust to suo motu appear before the ld Commissioner of Income-tax, Jamnagar within 15 days on receipt of this order of the Tribunal without waiting for any notice from the Revenue Department and submit the original Memorandum and Articles of Association of the Institution to the ld Commissioner of Income-tax, Jamnagar. Then after the ld Commissioner of Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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