Jagriti Welfare Society, Merrut V. Commissioner of Income Tax (Exemptions), Lucknow

ITA 01/LKW/2019

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3612 (ITAT-LUCKNOW)
• Duration Of Justice: 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 07-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ASHISH AGRAWAL
• Keywords: Charitable institution; Opportunity of being heard
• Section: 12; 11; 80G; 12A; 12AA

Judgement Text

I.T.A. NO.01/LKW/2019 ASSESSMENT YEAR:N.A. 1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI A. D. JAIN, VICE PRESIDENT AND SHRI T. S. KAPOOR, ACCOUNTANT MEMBER ITA NO.01/LKW/2019 ASSESSMENT YEAR:N.A. EARLY HEARING APPLICATION NO.01/LKW/19 (IN ITA NO.01/LKW/2019) ASSESSMENT YEAR:N.A. M/S JAGRITI WELFARE SOCIETY, 154, NOOR NAGAR, MEERUT. PAN:AAAAJ 6561 A VS. CIT (EXEMPTIONS), LUCKNOW. (APPELLANT) (RESPONDENT) O R D E R PER T. S. KAPOOR, A.M. THIS APPLICATION FOR EARLY HEARING HAS BEEN FILED BY THE ASSESSEE WITH A PRAYER TO HEAR THE APPEAL IN I.T.A. NO.01/LKW/201 9. LEARNED A. R., AT THE OUTSET, SUBMITTED THAT ASSESSEE IS A CHARITABLE ORG ANIZATION AND REGISTERED U/S 12A OF THE ACT. THE ASSESSEE SOCIETY IS ENGAGE D IN CHARITABLE ACTIVITIES AND HAD APPLIED FOR APPROVAL U/S 80G WHICH WAS REJE CTED BY LEARNED CIT (EXEMPTIONS). IT WAS FURTHER SUBMITTED BY LEARNED COUNSEL FOR THE ASSESSEE THAT THE SOCIETY IS IN THE PROCESS OF STARTING ITS ACTIVITIES AND THE SAME ARE AT THE HALT DUE TO NON APPROVAL UNDER SECTION 80G AND DUE TO THIS DELAY, THE WORK OF THE SOCIETY IS BEING ADVERSELY AFFECTED. T HEREFORE, IT WAS PRAYED APPELLANT BY SHRI ASHISH AGARWAL, ADVOCATE RESPONDENT BY SHRI SUSHIL KUMAR MADHUK, CIT (DR) DATE OF HEARING 12/02/2019 DATE OF PRONOUNCEMENT 22/02/2019 I.T.A. NO.01/LKW/2019 ASSESSMENT YEAR:N.A. 2 THAT THAT THE APPEAL OF THE ASSESSEE MAY BE FIXED F OR HEARING ON PRIORITY BASIS. 2. LEARNED D. R., HAD NO OBJECTION TO THE PROPOSAL OF LEARNED A. R. 3. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT ASSESSEE IS A REGIS TERED CHARITABLE TRUST U/S 12AA OF THE ACT. WE FURTHER FIND THAT IN THIS CASE THE ASSESSEE IS AGGRIEVED WITH THE ACTION OF LEARNED CIT (EXEMPTION) IN REJEC TING THE APPLICATION OF THE ASSESSEE, FILED U/S 80G OF THE ACT ON THE GROUND TH AT THE ASSESSEE HAD FAILED TO VERIFY ITS MAJOR EXPENSES EITHER BY BOOKS OF ACCOUNT OR BY RELEVANT VOUCHERS. THE LEARNED CIT (EXEMPTIONS) HELD THAT T HE APPLICATION AND THE SUPPORTING DOCUMENTS SHOULD DULY PASS THE TEST AS M ANDATED BY LAW FOR ACCORDING THE RECOGNITION U/S 80G(5) OF THE ACT. H E FURTHER HELD THAT APPLICANT HAD FAILED TO PROVIDE ANY COGENT PROOF TH AT COULD VERIFY THAT THE APPLICANT IS ACTUALLY CARRYING OUT ACTIVITIES IN PU RSUANCE OF THE OBJECTS SET FORTH IN THE MEMORANDUM OF THE TRUST. WE FURTHER F IND THAT LEARNED CIT(A) HAD GIVEN VARIOUS OPPORTUNITIES TO THE ASSESSEE BUT THE ASSESSEE FILED A REPLY ONLY ON 20/11/2018 AND ON THE SAME DAY LEARNE D CIT(A) HAS PASSED THE ORDER AND HAS HELD THAT BOOKS OF ACCOUNT WERE N OT PRODUCED. WE FIND THAT AFTER FILING OF LETTER DATED 20/11/2018 THE AS SESSEE WAS NOT CONFRONTED AND THEREFORE, WE DEEM IT APPROPRIATE TO REMIT THE ISSUE BACK TO LEARNED CIT(A) FOR READJUDICATION IN THE LIGHT OF JUDGMENTS OF VARIOUS BENCHES OF THE TRIBUNAL WHERE WE FIND THAT FOR GETTING APPROVAL U/ S 80G OF THE ACT, THE LEARNED CIT (EXEMPTIONS) IS REQUIRED TO SEE AS TO W HETHER CONDITIONS LAID DOWN UNDER CLAUSE (I) TO (V) OF SECTION 80G(5) ARE FULFILLED OR NOT. FOR THE SAKE OF CONVENIENCE, THE CONDITIONS AS LAID DOWN IN SECTION 80G(5) ARE REPRODUCED BELOW: (5) THIS SECTION APPLIES TO DONATIONS TO ANY INSTI TUTION OR FUND REFERRED TO IN SUB-CLAUSE (IV) OF CLAUSE (A) OF SUB -SECTION (2), I.T.A. NO.01/LKW/2019 ASSESSMENT YEAR:N.A. 3 ONLY IF IT IS ESTABLISHED IN INDIA FOR A CHARITABLE PURPOSE AND IF IT FULFILS THE FOLLOWING CONDITIONS, NAMELY:-- (I) WHERE THE INSTITUTION OR FUND DERIVES ANY INCOM E, SUCH INCOME WOULD NOT BE LIABLE TO INCLUSION IN ITS TOTA L INCOME UNDER THE PROVISIONS OF SECTIONS 11 AND 12 OR CLAUS E (23AA) OR CLAUSE (23C) OF SECTION 10: PROVIDED THAT WHERE AN INSTITUTION OR FUND DERIVES ANY INCOME, BEING PROFITS AND GAINS OF BUSINESS, THE CONDITION THAT SUCH INCOME WOULD NOT BE LIABLE TO INCLUSION IN ITS TOTA L INCOME UNDER THE PROVISIONS OF SECTION 11 SHALL NOT APPLY IN RELATION TO SUCH INCOME, IF,--(A) THE INSTITUTION OR FUND MAINT AINS SEPARATE BOOKS OF ACCOUNT IN RESPECT OF SUCH BUSINESS;(B) TH E DONATIONS MADE TO THE INSTITUTION OR FUND ARE NOT U SED BY IT, DIRECTLY OR INDIRECTLY, FOR THE PURPOSES OF SUCH BU SINESS; AND(C) THE INSTITUTION OR FUND ISSUES TO A PERSON M AKING THE DONATION A CERTIFICATE TO THE EFFECT THAT IT MAINTA INS SEPARATE BOOKS OF ACCOUNT IN RESPECT OF SUCH BUSINESS AND TH AT THE DONATIONS RECEIVED BY IT WILL NOT BE USED, DIRECTLY OR INDIRECTLY, FOR THE PURPOSES OF SUCH BUSINESS; (II) THE INSTRUMENT UNDER WHICH THE INSTITUTION OR FUND IS CONSTITUTED DOES NOT, OR THE RULES GOVERNING THE IN STITUTION OR FUND DO NOT, CONTAIN ANY PROVISION FOR THE TRANSFER OR APPLICATION AT ANY TIME OF THE WHOLE OR ANY PART OF THE INCOME OR ASSETS OF THE INSTITUTION OR FUND FOR ANY PURPOS E OTHER THAN A CHARITABLE PURPOSE; (III) THE INSTITUTION OR FUND IS NOT EXPRESSED TO B E FOR THE BENEFIT OF ANY PARTICULAR RELIGIOUS COMMUNITY OR CA STE; (IV) THE INSTITUTION OR FUND MAINTAINS REGULAR ACCO UNTS OF ITS RECEIPTS AND EXPENDITURE; (V) THE INSTITUTION OR FUND IS EITHER CONSTITUTED A S A PUBLIC CHARITABLE TRUST OR IS REGISTERED UNDER THE SOCIETI ES REGISTRATION ACT, 1860 (21 OF 1860), OR UNDER ANY L AW CORRESPONDING TO THAT ACT IN FORCE IN ANY PART OF I NDIA OR UNDER SECTION 25 OF THE COMPANIES ACT, 1956 (1 OF 1 956), OR IS A UNIVERSITY ESTABLISHED BY LAW, OR IS ANY OTHER EDUCATIONAL INSTITUTION RECOGNISED BY THE GOVERNMENT OR BY A UN IVERSITY ESTABLISHED BY LAW, OR AFFILIATED TO ANY UNIVERSITY ESTABLISHED BY LAW, OR IS AN INSTITUTION FINANCED WHOLLY OR IN PART BY THE GOVERNMENT OR A LOCAL AUTHORITY; I.T.A. NO.01/LKW/2019 ASSESSMENT YEAR:N.A. 4 4. WE FIND THAT LEARNED CIT (EXEMPTIONS) HAS NOT MA DE ANY OBSERVATION REGARDING VIOLATION OF ANY CONDITION LAID DOWN UNDE R CLAUSE (I) TO (V) OF SECTION 80G(5) OF THE ACT. THEREFORE, WE DEEM IT A PPROPRIATE TO REMIT THE ISSUE BACK TO THE FILE OF LEARNED CIT (EXEMPTIONS) WHO SHOULD CONSIDER THE APPLICATION OF THE ASSESSEE U/S 80G AFRESH KEEPING IN VIEW THE SPIRIT OF CONDITIONS LAID DOWN IN CLAUSES (I) TO (V) OF SECTI ON 80G OF THE ACT. NEEDLESS TO SAY, THE ASSESSEE WILL BE AFFORDED REASONABLE AN D SUFFICIENT OPPORTUNITY OF BEING HEARD. THE ASSESSEE IS ALSO DIRECTED TO A PPEAR BEFORE LEARNED CIT (EXEMPTIONS) ON THE DATE FIXED BY HIM AND SHOULD NO T TAKE UNNECESSARY ADJOURNMENTS. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES AND APPLICATION FOR EARLY HEARING IS ALLOW ED. (ORDER PRONOUNCED IN THE OPEN COURT ON 22/02/2019) SD/. SD/. ( A. D. JAIN ) ( T. S. KAPOOR ) VICE PRESIDENT ACCOUNTANT MEMBER DATED:22/02/2019 *SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW