Application for Registration u/s 12AA of Income Tax Act shall not denied on Absence of Dissolution Clause in Trust Deed: ITAT [Read Order]

The Income Tax Appellate Tribunal (ITAT) Delhi Bench held that application for registration under Section 12AA of Income Tax Act ,1961 should not be denied in absence of dissolution clause in trust deed.

The assessee, Roop V.K Jain Foundation, filed the appeal against the order of  Commissioner of Income Tax (Exemption) {CIT(E)} by denying the registration under Section 12AA of Income Tax Act.

The CIT(E) while denying the application observed that assessee Trust was not for charitable purposes as defined us 2(15) of the Income Tax Act 1961

Atreya G.C, the counsel for assessee submitted that absence of the clause of dissolution in the trust deed would in no manner be an impediment in the operation of the statue.

Further, the counsel argued that if it is found necessary to include a dissolution clause in its trust deed he  would include and a copy of the same would be submitted to the  CIT(E) for his satisfaction and compliance.

Sapna Bhatia, the Counsel for Revenue, submitted that the only objections of CIT(E) would be met if the assessee trust files its amended trust deed including dissolution clause.

It was observed by the tribunal that the CIT(E) has not made any allegations or has not made any adverse comment or conclusion, except omission of dissolution clause in the trust deed, regarding charitable objects of the assessee and the genuineness of its activities.

Thus, the  inclusion of dissolution clause in the trust deed is not mandatorily required and absence of such clause cannot be a sole basis for rejecting application seeking registration under Section 12AA of the Income Tax Act.

Therefore, the bench directs the assessee to amend its trust deed by way of inclusion of dissolution clause therefore we direct the assessee to submit a copy of amended trust deed before CIT(E).

After reviewing the facts and submissions of the both parties, the two member bench of B.R.R. Kumar(accountant member)  and Chandra Mohan Garg, (Judicial Member) directed to grant registration to the assessee  trust under Section 12AA of the Income Tax Act.

To Read the full text of the Order CLICK HERE

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