By TIOL News Service

MUMBAI, JULY 24, 2018: THE ISSUE BEFORE THE DIVISION BENCH IS - Whether absence of dissolution clause in the Trust Deed, should not be construed as a hindrance for a charitable trust to seek registration u/s 12A. YES IS THE VERDICT.

Facts of the case:

The Revenue Department preferred present appeal challenging the action of ITAT in overlooking the fact that in the absence of "Dissolution Clause" in the Trust Deed, the net assets of the Trust on its dissolution would be transferred to any entity/distributed among the trustees thus defeating the very purpose of Registration u/s 12AA.

High Court held that,

++ as far as dissolution clause is concerned, it is seen that the counsel for Revenue very fairly states that the issue raised herein stands concluded against the Revenue and in favour of the assessee by the decisions of this Court in CIT (Exemptions) Vs. Tara Educational & Charitable Trust - 2017-TIOL-1484-HC-MUM-IT and by order in CIT (Exemptions) Vs. Kallianji Chaturbhuj & Vijay Cantol Charitable Trust, wherein an identical question of law as raised under present appeal was not entertained, as not giving rise to any substantial questions of law. Therefore, for the reasons indicated in the order in the decisions of Tara Educational & Charitable Trust and Kallianji Chaturbhuj Charitable Trust, this question does not give rise to any substantial question of law.

(See 2018-TIOL-1427-HC-MUM-IT)