Tuesday, August 23, 2016

Church can furnish decree issued by bishop to establish creation of trust for sec. 12A registration

Facts:
a) The assessee, a religious institution (Parish),was created under the conventional way by issuing a 'decree' under Cannon law by the concerned Bishop. It filed an application in Form No. 10A requesting for registration under section 12A.

b) The Commissioner denied registration stating that since the assessee had not produced copy of the instrument in support of creation of the trust, the objects and its activities as well as the existence of the trust could not be ascertained.

The Tribunal held as under:

1) A plain reading of rule 17A makes it clear that a religious or charitable organization can be an institution other than a 'trust'. The usage of the words 'charitable or religious trust or institution' in the first and second limb of rule 17A connotes that where the trust is created, or institution is established, under an instrument, the instrument in original, together with a copy thereof, have to be filed along with the prescribed Form No. 10A for registration.


2) However, the second limb of rule 17A provides that where the trust is created, or the institution is established, otherwise than by an instrument, the document evidencing the creation of the trust or the establishment of the institution, together with one copy of thereof, haveto be filed along with the application in Form No. 10A for registration of the institution/trust under section 12A.

3) Thus, the applicable rule 17A itself provides that it is not even necessary that the institution/trust should be established under an instrument. What is required is only a document evidencing the creation of the trust or the establishment of the institution together with a copy thereof.

4) In the instant case, the religious institution was established by an order of a Bishop called 'decree'. On perusal of the 'decree', it was clear that a religious institution was established. Therefore, it was not correct on the part of the Commissioner to deny registration to the assessee under section 12A for the reason that copy of the instrument in support of creation of trust was not filed along with Form No. 10A. - MERCIFUL JESUS CHURCH V. CIT (EXEMPTION) - [2016] 72 taxmann.com 165 (Cochin - Trib.)
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