DIPL FOUNDATION SCO NO.327-328, SEC-20 MARKET, HUDA, KAITHAL, HARYANA,HARYANA V. CIT EXEMPTIONS CHANDIGARH, CHANDIGARH

ITA 1706/DEL/2024

AI Insights

The case involves DIPL Foundation, a company registered under section 8 of the Companies Act, 2013, which appealed against the decisions of the Commissioner of Income Tax (Exemptions), Chandigarh. The CIT(E) had rejected the Foundation's applications for registration under section 12A and approval under section 80G of the Income Tax Act, 1961. The Tribunal found that the CIT(E) had not adequately considered the submissions and documents provided by the assessee, leading to the decision to set aside the CIT(E)'s orders and remand the matter for a fresh evaluation.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 29216 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 14-11-2024
• Assessment Year: 2023-2024
• Appeal Filed On: 12-04-2024
• Other Referred Cases: CIT vs. A.R Trust, 86 taxmann.com 6 (Allahabad), Self Employers Service Society vs. CIT 247 ITR 18 (Kerala)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURENDER PAL
• Assessee Lawyers: SUDHIR SEHGAL; CHARTERED ACCOUNTANT
• Keywords: Set aside
• Section: 12A; 80G

Judgement Text

" आयकर अपीलीय अिधकरण िदʟी पीठ “बी”, िदʟी ŵी िवकास अव̾थी, Ɋाियक सद˟ एवं ŵी एस įरफौर रहमान, लेखाकार सद˟ क े समƗ IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “B”, DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER & SHRI S RIFAUR RAHMAN, ACCOUNTANT MEMBER आअसं.1707 & 1706/िदʟी/2024 (िन.व. 2023-24) ITA Nos.1707 & 1706/DEL/2024 (A.Y.2023-24) DIPL Foundation, SCO No. 327-328, Sector-20 Market, Huda, Kaithal, Haryana 136027 PAN: AAJCD-8419-L ...... अपीलाथᱮ/Appellant बनाम Vs. Commissioner of Income Tax (Exemptions), Chandigarh 160017 ..... ᮧितवादी/Respondent अपीलाथŎ Ȫारा/ Appellant by : Shri Sudhir Sehgal, Chartered Accountant ŮितवादीȪारा/Respondent by : Shri Surender Pal, CIT- DR सुनवाई कᳱ ितिथ/ Date of hearing : 14/11/2024 घोषणा कᳱ ितिथ/ Date of pronouncement : : 14/11/2024 आदेश/ORDER PER VIKAS AWASTHY, JM: These two appeals by the assessee are directed against the orders of Commissioner of Income Tax (Exemptions), Chandigarh (hereinafter referred to as 'the CIT(E)') rejecting assessee’s application for grant of registration u/s. 12A of the Income Tax Act, 1961(hereinafter referred to as ‘the Act’) vide order dated 23.02.2024 and rejection of application for grant of approval u/s. 80G of the Act vide order dated 06.03.2024, respectively. 2 ITA Nos. 1707 & 1706/DEL/2024 (AY 2023-24) 2. Shri Sudhir Sehgal, appearing on behalf of the assessee submits that the assessee is a company registered u/s. 8 of the Companies Act, 2013. The main objects of the company include to work towards environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agroforesty, etc. In this direction the assessee has entered into an agreement with Municipal Council Kaithal on 08.02.2023 (a copy of the agreement is at page 23 to 25 of the paper book). As per the said agreement, the assessee has been developing and maintaining three local parks as detailed in the agreement. The assessee furnished all the relevant documents before the CIT(E) to substantiate activities being carried out by the assessee. The CIT(E) without considering submissions of the assessee and documents placed on record rejected assessee’s application for grant of registration u/s. 12A of the Act, as well as, application for granting approval u/s 80G of the Act. 3. Per contra, Shri Surender Pal representing the department vehemently defended the impugned order. The ld. DR submits that the assessee has failed to prove genuineness of its activities to the satisfaction of CIT(E). The satisfaction of CIT(E) is must before granting registration u/s. 12A of the Act. In support of his argument, the ld. DR placed reliance on following decisions:- i. CIT vs. A.R Trust, 86 taxmann.com 6 (Allahabad); and ii. Self Employers Service Soceity vs. CIT 247 ITR 18 (Kerala). 4. We have heard the submissions made by rival sides and have examined the impugned orders. The assessee is registered u/s. 8 of the Companies Act, 2013. The assessee has placed on record Memorandum of Association of the assessee company at page 1 of the paper book. The objects of company inter alia includes:- 3 ITA Nos. 1707 & 1706/DEL/2024 (AY 2023-24) “1) To eradicate hunger, poverty and malnutrition, promoting health care including preventive health care and sanitation including contribution to the Swach Bharat Kosh Set up by the Central Government or the promotion of sanitation and making available safe drinking water. 2) To promote education, including special education and employment enhancing vocation skills especially among children, women, elderly and the differently abled and livelihood enhancement projects. 3) To promote gender equality, empowering women, setting up homes and hostels for women and orphans; setting up old age homes, day care centers and such other facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward groups 4) To ensure environmental sustainability, ecological balance, protection of flora and faura, animal welfare, agroforestry, conservation of natural resources and maintaining quality of soil, air and water including contribution to the Clean Ganga Fund set-up by the Central Government for rejuvenation of river Ganga.” 5. In the direction of achieving object no. 4, the assessee has entered into an agreement with Municipal Council Kaithal. The said agreement starts at page 23 of the paper book. The assessee is stated to have carried out development and maintenance activity of the municipal parks at Kaithal. During the course of submissions, the ld. DR pointed that the balance sheet of the assessee as on 31.03.2023(at page 9 of the paper book) reflects that the assessee does not have any fixed assets to carry out its activities, he raised suspicion that without any equipment, how the activities of development of parks are being carried out by the assessee. The ld. Counsel for the assessee pointed that the activities of development and maintenance of parks were carried out by hiring the services of third party agencies for which payments were made and the bills were produced before the CIT(E). 4 ITA Nos. 1707 & 1706/DEL/2024 (AY 2023-24) 5.1. A perusal of the impugned order reveals that the CIT(E) had raised certain queries. The assessee vide rletter dated 10.11.2023, replied to the queries raised by the CIT(E). The CIT(E) by making generic observations rejected application of the assessee for grant of registration u/s. 12A of the Act. The grant of approval u/s. 80G of the Act is offshoot of granting approval u/s. 12A of the Act. Once registration u/s. 12A of the Act is rejected, approval u/s. 80G of the Act has consequently being denied. Taking into consideration entire facts of the case, we deem it appropriate to restore both the issues i.e. non grant of registration u/s. 12A of the Act and non grant of approval u/s. 80G of the Act, to the CIT(E) for denovo consideration of respective applications. The CIT(E) shall seek relevant necessary/specific information, if any required from the assessee while considering the aforesaid applications of the assessee. The assessee shall provide necessary/relevant information to the satisfaction of CIT(E). 6. The impugned orders dated 23.02.2024 and 06.03.2024 are set aside and both appeals are restored to CIT(E) for denovo consideration of the respective applications of the assessee. 7. In the result, appeals of the assessee are allowed for statistical purpose. Order pronounced in the open court on Wednesday the 14th day of November, 2024. Sd/- Sd/- (S RIFAUR RAHMAN) (VIKAS AWASTHY) लेखाकार सद᭭य/ACCOUNTANT MEMBER ᭠याियक सद᭭य/JUDICIAL MEMBER िदʟी/Delhi, ᳰदनांक/Dated 14/11/2024 NV/- 5 ITA Nos. 1707 & 1706/DEL/2024 (AY 2023-24) ᮧितिलिप अᮕेिषतCopy of the Order forwarded to : 1. अपीलाथᱮ/The Appellant , 2. ᮧितवादी/ The Respondent. 3. The PCIT 4. िवभागीय ᮧितिनिध, आय.अपी.अिध., िदʟी /DR, ITAT, िदʟी 5. गाडᭅ फाइल/Guard file. BY ORDER, //True Copy// (Dy./Asstt. Registrar) ITAT, DELHI "