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Laxminarayan Maharaj and anr. Vs. Commissioner of Income-tax and ors. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtMadhya Pradesh High Court
Decided On
Case NumberMiscellaneous Petition No. 1222 of 1981
Judge
Reported in(1983)37CTR(MP)240; [1984]150ITR465(MP)
ActsIncome Tax Act, 1961 - Sections 12A and 12A(5); Income Tax Rules, 1962 - Rule 17 and 17A
AppellantLaxminarayan Maharaj and anr.
RespondentCommissioner of Income-tax and ors.
Appellant AdvocateB.L. Nema, Adv.
Respondent AdvocateB.K. Rawat, Adv.
Excerpt:
- motor vehicles act, 1988[c.a.no.59/1988] section 166; [a.k. patnaik, cj, a.k. gohil & s. samvatsar, jj] application for compensation for personal injury death of injured claimant subsequently for some other reasons held, claim for personal injury will abate on the death of claimant. claim will not survive to his legal representative except as regards claim for pecuniary loss to estate of claimant. - rules, 1962, was not satisfied......an instrument. it is in this background that rule 17a has to be construed.6. when the trust is a trust created under an instrument, rule 17 requires filing of 'the instrument in original' and when the trust is created otherwise than under an instrument, 'the document evidencing the creation of the trust' has to be filed. an analysis of section 12a(a) and rule 17a(a) will show that the fact to be established is the creation of the trust and this fact is required to be established by producing constitutive and evidential documents. when the trust is created under an instrument, the rule requires the production of the constitutive document itself, i.e., the instrument which created the trust. when the trust is not created under an instrument, it is impossible to produce any constitutive.....
Judgment:

Singh, C.J.

1. Petitioner No. 1, Shri Lakshminarayan Maharaj, Deity of Killa-Mandir, Durg, claims to be a public religious trust. Petitioner No. 2 is the Sarbarakhar of this trust. The petitioner-trust made an application for registration of the trust under Section 12A of the I.T. Act, 1961. The petitioner's application was rejected by the Commissioner by order dated February 6, 1979, for non-compliance with Rule 17A of the I.T. Rules, 1962. It is this order which is challenged by the petitioners in this petition-under Article 226 of the Constitution.

2. The petitioners' case is that the trust was created more than 100 years back but not under any instrument or document. Along with the application for registration, the petitioner-trust filed 10 documents. These documents are of three types : (i) revenue records relating to lands held by the trust, (ii) orders relating to assessment of property tax, and (iii) affidavits and declaration of citizens in support of the existence of the trust. The Commissioner took the view that all these documents, though evidencing the existence of the trust, were not documents evidencing the creation of the trust and, therefore, the requirement of Rule 17A of the I.T. Rules, 1962, was not satisfied. It is the correctness of this view which has to be examined in this petition.

3. Section 12A of the Act, in so far as relevant, reads as follows :

' 12A. The provisions of Section 11 and Section 12 shall not apply in relation to the income of any trust or institution unless the following conditions are fulfilled, namely :

(a) the person in receipt of the income has made an application for registration of the trust or institution in the prescribed form and in the prescribed manner to the Commissioner before the 1st day of July, 1973, or before the expiry of a period of one year from the date of the creation of the trust or the establishment of the institution, whichever is later : Provided that the Commissioner may, in his discretion, admit anapplication for the registration of any trust or institution after the expiryof the period aforesaid. '

4. Rule 17A of the I.T. Rules which was made in exercise of the powers conferred by Section 12A is as under :

'17A. Application for registration of charitable or religious trusts, etc.--An application under Clause (a) of Section 12A for registration of a charitable or religious trust or institution shall be made in duplicate in Form No. 10A and shall be accompanied by the following documents, namely :

(a) where the trust is created, or the institution is established,under an instrument, the instrument in original, together with one copythereof, and where the trust is created, or the institution is established,otherwise than under an instrument, the document evidencing the creation of the trust or the establishment of the institution, together with onecopy thereof: Provided that if the instrument or document in original cannot conveniently be produced, it shall be open to the Commissioner to accept a certified copy in lieu of the original. '

5. Section 12A was introduced with effect from April 1, 1973. It is not in dispute that the benefit of Sections 11 and 12 were available to all charitable or religious trusts irrespective of whether they were created under an instrument or created otherwise. It is obvious that the intention behind Section 12A was not to take away the benefit available to the trusts which were created otherwise than under an instrument. It is in this background that Rule 17A has to be construed.

6. When the trust is a trust created under an instrument, Rule 17 requires filing of 'the instrument in original' and when the trust is created otherwise than under an instrument, 'the document evidencing the creation of the trust' has to be filed. An analysis of Section 12A(a) and Rule 17A(a) will show that the fact to be established is the creation of the trust and this fact is required to be established by producing constitutive and evidential documents. When the trust is created under an instrument, the rule requires the production of the constitutive document itself, i.e., the instrument which created the trust. When the trust is not created under an instrument, it is impossible to produce any constitutive document and, hence, the rule requires production of evidential documents, i.e., the documents evidencing the creation of the trust. The evidential documents cannot be limited to documents which directly prove the creation of the trust, they will embrace all documents which afford a logical basis of inferring creation of the trust and all such documents can be described to be 'documents evidencing the creation of the trust' within the meaning of Rule 17A(a). A document directly evidencing the creation of the trust is normally the constitutive document which cannot be produced when the trust is not created by an instrument and if the words 'documents evidencing the creation of the trust' are construed as limited to documents directly evidencing the creation of the trust, it will be nearly impossible to have a trust registered which was not created under an instrument. This could never have been the intention of the framers of the rule. In our opinion, these words embrace all evidential documents, i.e., all documents which afford a logical basis for inferring the creation of a trust. The Revenue papers produced by the petitioners consisted of Jamabandis of 1910-11, 1929-30, patta issued in 1931 and Jamabandi of 1954-55. In all these documents, the petitioner-trust is entered as a tenant or Bhumiswami and the name of the Sarbarakhar is also mentioned. The assessment orders relating to property tax for 1967-68 to 1974-75 were filed. AH these documents, though not directly evidencing the creation of the trust, afford a logical basis for inferring the creation of the trust prior to 1910-11 and can be described as documents evidencing the creation of the trust for purposes of Rule 17A. In our opinion, the Commissioner was not right in taking a very narrow view of Rule 17A and in holding that the petitioner-trust has not complied with that rule.

7. The petition is allowed. The Commissioner's order dated February 6, 1979, is quashed and he is directed to reconsider the application of the trust in the light of the observations made above. There will be no order as to costs. The security amount be refunded to the petitioners.


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