DAWOODI BOHRA JAMAAT TRUST RAIPUR,RAIPUR V. COMMISSIONER OF INCOME TAX (EXEMPTION), BHOPAL , BHOPAL

ITA 401/RPR/2024

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The Dawoodi Bohra Jamaat Trust appealed against the decision of the Commissioner of Income Tax (Exemption), Bhopal, which had rejected their application for registration under section 12AB of the Income Tax Act. The CIT(E) had found discrepancies in the documentation provided by the trust, including incomplete details of donations and insufficient proof of expenses. The tribunal noted that the CIT(E) had not commented on the genuineness of the trust's activities or the charitable nature of its objects, and thus restored the matter to the CIT(E) for a detailed examination of these aspects.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 299023 (ITAT-RAIPUR)
• Duration Of Justice: 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 22-10-2024
• Assessment Year: misc
• Appeal Filed On: 31-08-2024
• Other Referred Cases: Shaheed Nand Kumar Patel Vishwavidyalaya vs CIT, CIT vs Chhattisgarh Urology Society, Pragatisheel Chhattisgarh Satnami vs CIT(E), Shree Vimalnath Jain Shwetamber Mandir Trust vs CIT, Swayam Sidhha Foundation Society vs CIT, CIT vs Vijay Vargiya Vani Charitable Trust, Koi Apna Sa Ho Society vs CIT(E)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: REVENUE PURPOSE; S.L.ANURAGI
• Assessee Lawyers: R. B. DOSHI
• Keywords: Set aside; Opportunity of being heard; Additional evidence; Charitable institution
• Section: 13; 10(23C)

Judgement Text

"आयकर अपीलीय अिधकरण, रायपुर Ɋायपीठ, रायपुर IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR ŵी रिवश सूद, Ɋाियक सद˟ एवं ŵी अŜण खोड़िपया, लेखा सद˟ क े समƗ । BEFORE SHRI RAVISH SOOD, JM & SHRI ARUN KHODPIA, AM (आयकर अपील सं. / ITA No: 401/RPR/2024) (िनधा[रण वष[ Assessment Year: -) Dawoodi Bohra Jamaat Trust, Bohra Noor Maszid Campus, Nayapara Road, Sadar bazar, Raipur, C.G., 492001 V s Commissioner of Income Tax (Exemption), Room No. 201, 2nd Floor, REAC, Aaykar Bhawan, Bhopal, (M.P.) PAN: AADTD8302K (अपीलाथŎ/Appellant) . . (ŮȑथŎ / Respondent) िनधाŊįरती की ओर से /Assessee by : Shri R.B. Doshi, CA राजˢ की ओर से /Revenue by : Shri S. L. Anuragi, CIT-DR सुनवाई की तारीख / Date of Hearing : 22.10.2024 घोषणा की तारीख/Date of Pronouncement : 25.10.2024 आदेश / O R D E R Per Arun Khodpia, AM: The captioned appeal is filed by the assessee against order passed by Commissioner of Income Tax (Exemption) [in short “CIT(E)”], Bhopal (M.P.), dated 26.07.2024, rejecting the applications of the assessee trust submitted in Form No. 10AB for registration / approval u/s 12AB of the Act. 2. The ground of appeal raised by the assessee is culled out as under: 1. Ld. CIT(Exemption) was not justified in rejecting application filed by appellant for registration u/s 12AB and in refusing to grant registration without appreciating the facts of the case properly. The rejection order 2 ITA No. 401/RPR/2024 Dawoodi Bohra Jamaat Trust, Raipur vs CIT(E), Bhopal passed by Ld. CIT(Exemption) u/s 12AB(1)(b)(ii)(B) is arbitrary, illegal and not justified. The appellant is entitled for registration u/s 12AB. 2. The appellant reserves the right to amend, modify or add any of the ground/s of appeal. 3. The brief facts of the case are that the assessee Trust has a client for registration u/s 12AB of the Act under the new provisions of Income Tax Act, 1961. Opportunity notices were issued to the assessee, calling various details of the documents to process the application and to verify the objects and activities of the assessee. Assessee had submitted reply dated 07.06.2024 and 08.07.2024. Considering the submissions of the assessee, Ld. CIT(E) had issued a query letter on 26.06.2024 to furnish details of Income & Expenditure Account and Balance Sheet for the FY 2023-24 and FY 2024-25 along with proof of charitable activities. Another query letter dated 11.07.2024 was issued to furnish details pertaining to donations received in the FY 2023-24 with complete details of doners name, address, PAN, mobile number, amount and mode of donation. With respect to earmarked funds as discernible from the balance sheet of the assessee for the FY 2023-24, details were sought for doners, their direction letters along with supporting documents. Ld. CIT(E) also directed the assessee to furnish proof of activities for last 3 FY’s along with address of the activities and proof of expenses relating to charitable / religious activities. Ld. CIT(E) further observed that in response to aforesaid queries letter dated 27.06.2024 and 11.07.2024, the assessee had 3 ITA No. 401/RPR/2024 Dawoodi Bohra Jamaat Trust, Raipur vs CIT(E), Bhopal submitted various documents. After examination of the various documents submitted by the assessee, considering the same Ld. CIT(E) have pointed out various discrepancies and rejected the application of the assessee with the following observations: On examination of documents submitted by the assessee, various discrepancies have been found which are depicted as under: - 1. On verification of details of donations received, it is observed that PAN numbers of the donors have been provided and also in respect of various donors, complete address has also not been given. Further, in most of the cases, donations were received in cash mode only. 2. The assessee has not provided complete & proper proof of various huge expenses claimed in Income & Expenditure Account of F.Y. 2023-24. 3. The assessee has not provided the details of all earmarked funds shown in balance sheet of FY 2023-24 and also not submitted any direction letters of donors. Despite sufficient opportunities of being heard given to the assessee for submission of documents, the assessee has not provided various details requisitioned in ibid query letters, therefore, in absence of desired documents/details, the genuineness of Income & Expenses claimed has not established. Considering the facts of the case, the application of the assessee filed in Form IOAB for grant of registration u/s 12AB of the Income Tax Act is hereby rejected. 4. Being aggrieved with the aforesaid rejection order by the Ld. CIT(E), the assessee preferred to carry the matter before us, which is under consideration in the present case. 4 ITA No. 401/RPR/2024 Dawoodi Bohra Jamaat Trust, Raipur vs CIT(E), Bhopal 5. At the outset, Ld. AR of the assessee has submitted a written synopsis of the same extracted as under: Dawoodi Bohra Jamaat Trust Raipur ITA no. 401/RPR/2024 (Assessee) Submission of assessee l . Scope of powers u/s 12AB(l )(b) i) CIT can call for such documents or make such enquiries as he thinks fit to satisfy himself about genuineness of activities and compliance of any other law. ii) Satisfy himself about objects and genuineness of activities. 2. Scope of powers u/s 12AA(l )(a) i) Similar was scope of enquiry u/s 12AA(l)(a). Scope of powers of CIT as understood in the context of sec. 12AA(l)(a) will equally apply to sec 12AB(l)(b) also. ii) CIT to satisfy himself about objects of trust. None of the object held to be noncharitable/non-religious. Registration could not be denied. Trust deed is placed at PN 51 to 70 of PB. Objects at PN 55 & 57 of PB. Reliance on:  Shaheed Nand Kumar Patel Vishwavidyalaya vs CIT in TAXC No. 187 of 2024 dc. 09.09.2024  CIT vs Chhattisgarh Urology Society (2018) 303 CTR 299 (Chhattisgarh), PN 92 to 95 of PB, relevant finding at PN 95 of PB, para no. 11.  Pragatisheel Chhattisgarh Satnami vs. CIT(E) in ITA no. 106/RPR/2018 vide order cit. 21.09.2022, PN 104 to I l l of PB, relevant finding at PN 109 of PB, para no. 8.  Shree Vimalnath Jain Shwetamber Mandir Trust vs CIT in ITA no. 50/RPR/2018, cit. 16.01.2019, PN 96 to 103 of PB, relevant finding at PN 100 of PB, para no. 5. 5 ITA No. 401/RPR/2024 Dawoodi Bohra Jamaat Trust, Raipur vs CIT(E), Bhopal o PN 97 of PB, there was denial of registration also for the reason that donations were received in cash and details of donors not mentioned in receipt book.  Swayam Sidhha Foundation Society vs CIT in ITA no. 93 & 312/RPR/2023 dated 22.01.2024, relevant finding at, para no. 10.  CIT vs Vijay Vargiya Vani Charitable Trust (2014) 369 ITR 360 (Raj.), relevant findings at para 8 of judgment. 3. Since no adverse finding on objects & genuineness of activities, CIT(E) not justified in denying registration u/s 12AB. Issues raised by CIT(E) i) Details of donation not furnished a) Chart named \"Annexure A\" containing complete details submitted vide reply dt. 18.07.2024, para no. l. Reply at PN 12 & 13 of PB. Details submitted separately vide letter dated 03.10.2024. b) Verification of donations received not within the scope of power of CIT (E) at the time of grant of registration. Reliance on: -  Shree Vimalnath Jain Shwetamber Mandir Trust vs CIT in ITA no. 50/RPR/2018, dt. 16.01.2019, PN 96 to 103 of PB. PN 97 of PB, there was denial of registration on a/c of donation details.  Kanyakubj Sabha vs CIT (Exemption) in ITA No. 16/RPR/2019 cit. 21.09.2022. One of the reason given for rejection was about donation received for capital, used for revenue purpose.  Koi Apna Sa Ho Society vs. CIT(E) in ITA no. 168/RPR/2024 vide order cit. 31.05.2024, PN 1 12 to 120 of PB, relevant finding on PN 1 19. ii) Regarding proof of expenses a) Sample bill of expenses were submitted reply dt. 18.07.2024, para no. 4, PN 12-13 of PB. Bills at PN 80 to 89 of PB. 6 ITA No. 401/RPR/2024 Dawoodi Bohra Jamaat Trust, Raipur vs CIT(E), Bhopal b) Verification of expenses not within the scope of powers of CIT(E) at the time of grant of registration. iii) Details of earmarked funds and direction letters of donors not furnished a) Details of earmarked funds namely Ikaram Fund Amanat a/c & Sabil-ul- Barkat Fund (Chart named as \"Annexure B\") were also submitted vide letter dt. 18.07.2024, para no. 2, PN 12-13 of PB. Sample receipts were also submitted which are placed at PN 71 to 79 of P B. b) Issue of verification of books not within the scope of powers of CIT(E) at the time of grant of registration. No further query was raised after submission of above documents. 6. Backed by aforesaid submissions Ld. AR submitted that the order passed by Ld. CIT(E) and findings therein are misplaced, premature and preconceived so far as the genuineness of the objects and activities of the assessee trust are concerned, as there was no adverse finding accorded by the Ld. CIT(E) in his order. It is the submission that the assessee has furnished complete details of the donations received during the FY 2023-24, though the verification of donation received is not within the scope and power of Ld. CIT(E) at the stage of grant of registration. Regarding proof of expenses, sample bill of expenses were submitted, though the verification of expenses is not within the scope of powers of Ld. CIT(E) at the stage of grant of registration. It is the submission that details of earmarked funds and direction letters of the doners were also submitted vide letter dated 18.07.2024. It was the submission that in 7 ITA No. 401/RPR/2024 Dawoodi Bohra Jamaat Trust, Raipur vs CIT(E), Bhopal absence of any further queries raised by the Ld. CIT(E), the assessee was not at fault to submit any further documents. Ld. AR placed his reliance on various judicial pronouncements as referred to in his submissions (supra). It was therefore the prayer that the Ld. CIT(E) was not justified in rejecting the application of the assessee for registration u/s 12AB of the Act. 7. On the contrary, Ld. CIT-DR vehemently supported the orders of Ld. CIT(E). 8. We have considered the rival submissions, perused the material available on record and case relied upon by the assessee. Considering the admitted facts of the present case, wherein the application of assessee for grant of registration u/s 12AB was rejected on account of non-furnishing / furnishing of incomplete compliance, which are not to the satisfaction of Ld. CIT(E) and in the manner as desired. We may herein observe that while disposing of the application of the assessee, there was no comment by the Ld. CIT(E) qua the objects and activities of the assessee trust that the objects of the assessee trust are not in the nature as defined under the provisions of section 11 & 12 of the IT Act or the Activities carried out by the assessee trust are not genuine. Since the genuineness of activities and conduct of the assessee trust towards the objects of the as per there bylaws are not doubted by the Ld. CIT(E), neither any plausible reason or reasonable explanation to hold the same not in charitable nature was noted by the Ld. CIT(E), under such circumstances, we are of the considered view 8 ITA No. 401/RPR/2024 Dawoodi Bohra Jamaat Trust, Raipur vs CIT(E), Bhopal that this crucial aspect was left to be looked into by the approving authority, therefore, the matter requires to be restore back to the file of Ld. CIT(E). Herein we may observe that a similar view has been adopted by this tribunal in the case of Koi Apna Sa Ho Society vs CIT(E) in ITA No. 168/RPR/2024 vide order dated 31.05.2024, wherein the observation on the issue reads as under: 11. We have considered the rival submission, perused the material available on record and case laws relied upon by the assessee. Considering the factual matrix of the present case, wherein the application of the assessee is rejected only on the ground that, it was unable to furnish the complete details of the doners, however since further details are produced before us, as additional evidence u/r 29 of the ITAT Rules, 1963, furthermore, on perusal of evidences, regarding activities of the trust wherein the trust is found to be involved in various charitable activities as elaborated a/w supporting documents at page no. 20-78 of the assessee’s PB. Also, the objects of the society are found to be a charitable in nature i.e., (i) Education of poor and unprivileged, (ii) Providing medical facilities to poor, (iii) To help children suffering from Thalassemia, (iv) Run and Maintain orphanage and old age homes, (v) Preservation of environment and promoting sustainable development. According to the financials of the assessee placed at page no. 83 to 108 also nothing is transpired to doubt the genuineness of the activities carried out by the assessee society, further there was no negative remark by the revenue toward such financials apart from incomplete information about the doners. Since the genuineness of activities and conduct of the assessee society towards its objects is not dislodged by the revenue with any plausible reason or reasonable 9 ITA No. 401/RPR/2024 Dawoodi Bohra Jamaat Trust, Raipur vs CIT(E), Bhopal explanation to doubt the same, we are of the considered opinion that the assessee society cannot be deprived of from their eligibility to obtain registration as a charitable institution under the provisions of section 12AB of the Act, only for the reason that the certain details of donation received could not be furnished by them. Since, in order to check the genuineness of donations received further details are furnished by the society u/r 29 as additional evidence before us which could not be furnished before the Ld. CIT(E), therefore, we find it appropriate to restore the issue to the files of Ld. CIT(E), with directions to re-visit the application of the assessee and grant them registration u/s 12AB according to the provisions of the law. Needless to say, reasonable opportunity of being heard and liberty to furnish necessary information / explanations / documents / evidence shall be afforded to the assessee in the set aside proceedings. 9. In a similar issue qua the grant of registration u/s 10(23C)(vi) of the IT Act, Hon’ble Jurisdictional High Court in the case of M/s Shaheed Nand Kumar Patel Vishwavidyalaya, Road vs Commissioner of Income Tax (E), Bhopal in TAXC No. 187 of 2024 dated 09.09.2024 has held as under: 9. Reverting to the facts of the present case in light of the principles of law laid down by their Lordships of the Supreme Court in New Noble Educational Society (supra) and catalogued in paragraph 82 of the judgment, it would appear that both the authorities have failed to record a specific finding that the appellant University is not existing solely for educational purposes and is existing for purposes of profit, which was sine qua non for rejecting the application for registration under the provisions of Section 10(23C)(vi) of the IT Act. Both the 10 ITA No. 401/RPR/2024 Dawoodi Bohra Jamaat Trust, Raipur vs CIT(E), Bhopal authorities in order to consider the application would have considered the fact whether the University is solely existing for educational purposes, or it is existing for purposes of profit and in case it is affirmative, it could have granted the application and in case it is negative, it could have rejected the application. Both the authorities have failed to go through the objects of the University and failed to record finding with respect to education or educational activities. No express finding has been recorded by both the authorities that the appellant University does not satisfy the objects, and the genuineness of its activities as required under the 2nd proviso to Section 10(23C) of the IT Act. 10. In that view of the matter, orders impugned (Annexures A-1 & A 10) passed by both the authorities are hereby set aside and the matter is remitted to the CIT(E), Bhopal to consider and decide the application under Section 10(23C)(iii) of the IT Act afresh in light of the decision of the Supreme Court in New Noble Educational Society (supra), particularly with regard to the binding law laid down in paragraph 82 therein, within a period of two months from the date of receipt of a copy of this order, on its own merits, in accordance with law. It is made clear that this Court has not expressed any opinion on the merits of the application and the CIT(E) will decide the application after hearing the parties, in accordance with law. 10. In terms of the aforesaid observations, respectfully following analogy of law drawn from the order of Hon’ble Jurisdictional High Cour tin the case of Shaheed Nand Kumar Patel Vishwavidyalaya (supra) and order of ITAT in the case of Koi Apna Sa Ho Society (supra), in absence of any contrary decision, fact, or submission by the revenue, we find it appropriate to restore the issue to the files of Ld. CIT(E), with the 11 ITA No. 401/RPR/2024 Dawoodi Bohra Jamaat Trust, Raipur vs CIT(E), Bhopal directions to re-visit the application of the assessee and dispose of the same under express finding qua the objects and activities of the trust in deciding the eligibility of the assessee trust for grant of registration u/s 12AB of the Act. 11. Needless to say, reasonable opportunity of being heard and liberty to furnish necessary information / explanations / documents / evidence shall be afforded to the assessee in the set aside proceedings. 12. The assessee is also directed to assist in the proceedings before the Ld. CIT(E) to furnish all the information necessary so as to satisfy the approving authority about the objects of the trust and the genuineness of its activities as contemplated in sub- clause (A) & compliances of requirements as per sub-clause (B) of clause (i) of sub- section (1) of section 12AB, failing which the Ld. CIT(E) would be at liberty to decide on the application in form No. 10AB for grant of registration u/s 12AB in accordance with law. 13. In the result, the present appeal of the assessee is partly allowed, in terms of our observations hereinabove. 12 ITA No. 401/RPR/2024 Dawoodi Bohra Jamaat Trust, Raipur vs CIT(E), Bhopal Order pronounced in the open court on 25/10/2024. Sd/- (RAVISH SOOD) Sd/- (ARUN KHODPIA) Ɋाियक सद˟ / JUDICIAL MEMBER लेखा सद˟ / ACCOUNTANT MEMBER रायपुर/Raipur; िदनांक Dated 25/10/2024 Vaibhav Shrivastav आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : आदेशानुसार/ BY ORDER, (Senior Private Secretary) आयकर अपीलीय अिधकरण, रायपुर/ITAT, Raipur 1. अपीलाथŎ / The Appellant- Dawoodi Bohra Jamaat Trust, Raipur 2. ŮȑथŎ / The Respondent- CIT(E), Bhopal 3. आयकर आयुƅ(अपील) / The CIT(A), 4. The Pr. CIT, Raipur (C.G.) 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, रायपुर/ DR, ITAT, Raipur 6. गाडŊ फाईल / Guard file. // स×याǒपत Ĥित True copy // "