Laxman Singh (Trustee) for the Assessee. Amrish Bedi (CIT) for the Revenue.

This is an appeal filed by the assessee against the order of ld. CIT(E), Jaipur dated 19.02.2020 rejecting the assessee’s trust application seeking registration U/s 80G(5)(vi) (of Income Tax Act, 1961).

2. Briefly the facts of the case are that the assessee-trust has moved an application before the ld CIT(E) for seeking registration U/s 80G (of Income Tax Act, 1961). Subsequently, notices were issued seeking information and documents from the assessee-trust and considering the submissions so filed by the assessee-trust, the ld. CIT(E) held that the assessee-trust is a private religious trust and therefore, cannot be held as a charitable trust within the meaning of Section 2(15) (of Income Tax Act, 1961). It has also been held by the ld. CIT(E) that the assessee-trust has failed to furnish clarification/details as sought vide order sheet entry dated 04.10.2019. Accordingly, the application seeking registration U/s 80G (of Income Tax Act, 1961) was rejected. Against the said order and the findings of the ld. CIT(E), the assessee trust is in appeal before us.

3. During the course of hearing, the ld. AR has submitted that the assessee-trust is duly registered U/s 12AA (of Income Tax Act, 1961) vide order dated 28.08.2019 passed by the ld. CIT(E), Jaipur. It was further submitted that assessee-trust is also registered under the Rajasthan Society Registration Act, 1958 vide registration certificate dated 26.12.2019. It was further submitted that the necessary information as called for by the office of the ld. CIT(E) have been duly submitted in terms of Form No. 10G as well as copy of the financial statements of the assessee trust. It was submitted that notices were issued for hearing on a holiday and the assessee did appear on the said date but the matter was thereafter adjourned and in any case, necessary information as called for by the office of ld. CIT(E) were duly submitted. It was further submitted that in respect of another trust, the registration has been duly granted U/s 12AA (of Income Tax Act, 1961) as well as 80G on the same date and therefore, in the case of the assessee, great prejudice has been caused by denying registration U/s 80G (of Income Tax Act, 1961). Lastly, it was submitted that the assessee has filed the application on 01.08.2019 and the order has been passed by the ld CIT(E) on 19.02.2000 and therefore, the same has been passed beyond the limitation period of 6 months as prescribed in the Income Tax Rules. It was accordingly submitted that the order so passed by the ld. CIT(E) should be set aside and necessary relief may be provided to the assessee-trust by granting registration as sought U/s 80G (of Income Tax Act, 1961).

4. Per contra, the ld. DR submitted that it is not in dispute that the assessee-trust has been granted registration U/s 12AA (of Income Tax Act, 1961) however, mere grant of registration U/s 12AA (of Income Tax Act, 1961) does not automatically entitled the assessee to seek registration U/s 80G (of Income Tax Act, 1961). The assessee-trust has to satisfy in respect of the genuineness of its activities as well as the satisfaction of other conditions as so stipulated U/s 80G(5) (of Income Tax Act, 1961). It was submitted that the assessee- trust was granted registration U/s 12AA (of Income Tax Act, 1961) under the category of “advancement of general public utility” however, on examination of trust deed, it was noticed that trust has been established on 27.09.2017 and thereafter, the trust deed was amended on 03.10.2017 by incorporating point no. 23A in the trust deed which describe the property of the trust i.e, Bhairav Temple, however, the said property has not been depicted in the balance sheet furnished for the financial years 2017-18 & 2018-19 respectively. It was submitted that the necessary information/clarification were sought from the assessee-trust in this regard however, there has been no satisfactory explanation which has been submitted in this regard. It was accordingly submitted that the assessee-trust was having temple as its property and was carrying on religious activity in terms of running of the temple however, there is no mention of the religious objects in the trust deed and therefore, activities so carried out by the assessee-trust are not in a consonance with the objects for which the trust was granted registration U/s 12AA (of Income Tax Act, 1961) under the category of general public utility. It was further submitted that all the trustees of the assessee- trust belong to a single family and therefore, taking into consideration the activities as well as the administration of the assessee-trust, it was held to be a private religious trust and not a public charitable trust and therefore, the registration u/s 80G (of Income Tax Act, 1961) has been rightly denied by the ld. CIT(E). It was further submitted that the assessee-trust was issued notice dated 04.10.2019 seeking necessary information and clarification and only part reply has been submitted by the assessee trust and therefore, it was submitted that in absence of the necessary information so submitted by the assessee-trust, the ld. CIT(E) in the given facts and circumstances of the case had rightly denied the registration U/s 80G (of Income Tax Act, 1961). He accordingly supported the order and the findings of the ld. CIT(E).

5. We have heard the rival contentions and perused the material available on record. Firstly as regard the contention raised by the ld. AR that the impugned order has been passed beyond the limitation period so prescribed in the Income Tax Rules, we find that the assessee-trust has moved its application on 01.08.2019 and therefore, the limitation period has to be counted from the end of the month in which the application has been filed and the said period expired on 28.02.2020. In the instant case, the impugned order was passed on 19.02.2020, therefore, the same was passed within the limitation period as so prescribed and therefore, the contention so advanced by the ld. AR cannot be accepted.

6. Now coming to the findings of the ld. CIT(E) as also contended by the ld. CIT/DR that the assessee-trust is a private religious trust which doesn’t enure for the benefit of public at large and thus cannot be held as charitable within meaning of section 2(15) (of Income Tax Act, 1961).

7. In this regard, we are of the view that what is relevant to examine is whether the activities of the assessee-trust cater to the public at large or limited to selective individuals or community. Further, merely the fact that the trustees belongs to a single family cannot be a sole reason for holding that it is a case of private trust as compared to a public trust more so when we find that the assessee-trust has already been registered U/s 12AA (of Income Tax Act, 1961) as well as under the Rajasthan Society Registration Act. The trustees are the same at the time of applying for registration U/s 12AA (of Income Tax Act, 1961) as well as while applying for the impugned approval U/s 80G (of Income Tax Act, 1961) and therefore, where the Revenue has already taken a view that the assessee is a public trust, in such a scenario, basis the same documents, the Revenue cannot plead and take a different view in the matter. Having said that, where the Revenue believes that there has been a subsequent change in the basic structure of the assessee trust and/or violation of any of the conditions so specified while granting approval U/s 12AA (of Income Tax Act, 1961), the Revenue has the necessary recourse under sub-section (3) and (4) of Section 12AA (of Income Tax Act, 1961). However, having granted registration U/s 12AA (of Income Tax Act, 1961) which continues to remain in force and which has not been withdrawn as on date, the main character of the assessee-trust as that of the public trust cannot be challenged in the impugned proceedings.

8. Regarding the Bhairav Temple being described as property of the assessee trust as per the amended trust deed and carrying on the activities of running of the temple, the question that arises for consideration is whether the activities so conducted are for the benefit of particulars religious community or public at large and the quantum of expenditure which has been incurred in respect of such activities and whether the provisions of sub-section (5B) of Section 80G (of Income Tax Act, 1961) are violated in the instant case. Admittedly, address of the assessee-trust while applying for approval U/s 80G (of Income Tax Act, 1961) as stated in Form no. 10G is Plot No. 4, Temple Bharav Ji Maharaj, Vikash Nagar, Kalwar Road, Jhotwara, Jaipur and thus, the assessee-trust which has been established on 27.09.2017 is operating out of the temple premises, therefore, it is a case of a trust which is operative as on the date of seeking registration and it thus becomes essential to examine the exact nature of the activities so undertaken by the assessee-trust. The assessee trust has claimed that the necessary information/documents have been submitted before the ld CIT(E) however, on perusal of the records, we are unable to decipher any information and documents which have been submitted by the assessee-trust in relation to Temple related activities and corresponding expenditure. At the same time, we believe that the assessee trust deserve one more opportunity to submit the necessary information/documents and in the interest of justice and fair play, we are setting aside the matter to the file of ld. CIT(E) for the purposes of examining the activities of the assessee’s trust including the activities in relation to Bhairav Temple and basis the same, decide the matter afresh as per law preferably within three months of the receipt of this order.

9. In the result, the appeal of the assessee is allowed for statistical purposes.

Order pronounced in the open Court on 05/01/2021.