Hiranyagarbh, Dehradun V. CIT9Exemption), Lucknow

ITA 1082/DEL/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4326 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2018-2019
• Appeal Filed On: 13-02-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: AGAINST DATED PASSED
• Keywords: Charitable institution; Opportunity of being heard; Principle of natural justice
• Section: 80G; 12AA; 12

Judgement Text

1 ITA NO. 1082/DEL/2018 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: C NEW DELHI BEFORE MS SUCHITRA KAMBLE, JUDICIAL ME MBER AND SH. PRASHANT MAHARISHI, ACCOUN TANT MEMBER I.T.A. NO. 1082/DEL/20 18 (A.Y 2018-19) (THROUGH VIDEO CON FERENCING) HIRANYAGARBH C/O. N. KUMAR GUPTA & ASSOCIATES, 74/1, NARI SHILP MANDIR MARG, NEAR BINDAL BRIDGE, DEHURADUN, UTTARAKHAND AABTH3961J (APPELLANT) VS CIT(EXEMPTION) TC-46V, UP CONSTRUCTION & INFRASTRUCTURE DEVELOPMENT CORPORATION, VIBHUTI KHAND, GOMTI NAGR, LUCKNOW (RESPONDENT) ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE O RDER DATED 14/12/2017 PASSED BY INCOME TAX DEPARTMENT, CIT(EXEMPTION), LU CKNOW FOR ASSESSMENT YEAR 2018-19. 2. THE GROUNDS OF APPEAL ARE AS UNDER: 1. THAT, THE LEARNED CIT (EXEMPTION) HAS ERRED ON FAC TS AND IN LAW IN REJECTING THE APPELLANT TRUST'S APPLICATION SEEKING APPROVAL UNDER SECTION 80G (5) OF THE ACT, WITHOUT PROPERLY APPRECIATING THE M ATERIAL ON RECORD REQUISITIONED BY HIM. 2. THAT, THE LEARNED CIT (EXEMPTION) HAS CONFUSED AN A PPLICATION FOR APPELLANT BY SH. MAYANK AGARWAL, ADV & SH. SAPAN GUPTA, CA RESPONDENT BY MS. SUNITA SINGH, CIT DR DATE OF HEARING 14.09.2021 DATE OF PRONOUNCEMENT 05.10.2021 2 ITA NO. 1082/DEL/2018 EXEMPTION U/S 80G WITH THAT FOR REGISTRATION U/S 12 AA AND ALTOGETHER IGNORED THAT REGISTRATION U/S 12AA HAS BEEN ALREADY GRANTED TO THE TRUST. IT IS MERELY CUT COPY PASTE ORDER WITHOUT APPRECIATING THE FACTS OF THE MATTER LOGICALLY. 3. THAT, THE LEARNED CIT (EXEMPTION) HAS ERRED ON FACT S IN REJECTING THE APPELLANT TRUSTS APPLICATION FOR ALLEGED WANT OF P HOTOGRAPHIC EVIDENCE AND VOUCHERS OF CHARITABLE ACTIVITIES PERFORMED, WHICH IN FACT WERE DULY PUT ON RECORD ALONG WITH REPLY DATED 14/12/2017.. 4. THAT, THE FINDINGS ARRIVED AT BY THE LEARNED CIT (E XEMPTION) ABOUT THE APPELLANT TRUSTS ACTIVITIES BEING NOT CHARITABLE A RE CONTRARY TO THE FACTS AND CIRCUMSTANCES OF THE APPELLANT TRUSTS CASE AND MAT ERIAL PLACED BY IT ON RECORD BEFORE HIM AND RUNS CONTRARY TO THE FINDINGS OF THE CIT (EXEMPTION), LUCKNOW ON BASIS OF WHICH THE APPELLANT TRUST WAS G RANTED REGISTRATION VIDE LATTERS ORDER DATED 23.02.20M UNDER SECTION 12AA O F THE ACT. THE APPELLANT TRUST HAS CARRIED ON SIMILAR ACTIVITIES POST REGIST RATION UNDER SECTION 12AA OF THE ACT, THUS IT CANNOT BE HELD THAT THE ACTIVITIES ARE COMMERCIAL OR NON- CHARITABLE IN NATURE. 5. THAT, THE LEARNED CIT (EXEMPTION) HAS ERRED ON FACT S IN STATING THAT THE APPLICANT TRUST IS ONLY ENGROSSED M NON CHARITABLE AND COMMERCIAL ACTIVITIES WHEREAS THE PROOFS PUT ON RECORD CLEARLY SUBSTANTIA TE THAT THE TRUST HAS BEEN CARRYING OUT ONLY CHARITABLE ACTIVITIES TO IN PURSU ANCE OF THE OBJECTS SET FORTH IN THE MEMORANDUM OF THE TRUST. THE TRUST FURTHER W ISHES TO PUT ON RECORD THAT ANY AND EVERY ACTIVITY UNDERTAKEN BY THE TRUST WAS PURELY CHARITABLE IN NATURE AND IN ACCORDANCE WITH OBJECTS OF THE TRUST WHICH WERE APPROVED FOR PURPOSES OF REGISTRATION U/S 12AA. 6. THAT THE LEARNED CIT (EXEMPTION) HAS ERRED ON FACTS STATING THAT THE APPLICANT HAD SUFFICIENT TIME AND FUNDS AT HAND TO CARRY OUT CHARITABLE ACTIVITIES DURING THIS PERIOD BUT UNFORTUNATELY EXC EPT FOR RECITAL OF OBJECTS NOTHING SUBSTANTIAL OR CONCRETE HAS BEEN DONE BY TH E APPLICANT TRUST IN THE FIELD OF CHARITY. AND IT IS CLEARLY EVIDENT FROM THE MATERIAL AVAILABLE ON RECORD THAT THE APPLICANT HAS NOT EVEN INTENDED TO MAKE USE OF THE TIME AND FUNDS AT HAND TO CARRY OUT ANY CHARITY 3 ITA NO. 1082/DEL/2018 WHEREAS THE TRUST WOULD LIKE TO SUBMIT THAT AS SU BSTANTIATED BY THE AUDITED FINANCIAL STATEMENTS AND THE INCOME TAX RET URNS OF THE PREVIOUS YEARS WHERE THE TRUST RECEIVED DONATIONS WHICH WERE UTILI ZED IN WHOLE FOR CHARITABLE ACTIVITIES TO ACHIEVE THE TRUSTS OBJECT IVE AND AT NO POINT WAS THE TRUST HAVING ANY IDEAL FUNDS. 3. THE ASSESSEE IS A TRUST REGISTERED UNDER THE IND IAN TRUST ACT, 1882 VIDE TRUST DEED DATED 30/5/2015, THE TRUST OBTAIN REGIST RATION U/S 12AA OF THE INCOME TAX ACT, 1961 W.E.F 1/4/2016 VIDE LETTER DAT ED 23/2/2017. THE ASSESSEE TRUST FILED ITS APPLICATION FOR THE GRANT OF REGISTRATION U/S 80G OF THE INCOME TAX ACT, ON 5/4/2017 IN THE PRESCRIBED FORMA T. NOTICE DATED 13/11/2017 WAS ISSUED BY THE CIT(EXEMPTION) THEREBY ASKING SUBMISSION OF CERTAIN DOCUMENTARY DETAILS AND INFORMATION ALONG W ITH OPPORTUNITY OF BEING HEARD. THE ASSESSEE SUBMITTED REPLY DATED 14/12/20 17 CONTAINING COMPLETE AND ELABORATE RESPONSE TO EACH QUERY OF THE CIT(EXE MPTION). THE CIT(EXEMPTION) VIDE ORDER DATED 14/12/2017 REJECTED THE APPLICATION OF THE ASSESSEE THEREBY STATING THAT THE ASSESSEE IS NOT I NDICATED IN ANY CHARGEABLE PURPOSE WHICH IS THE PRE-REQUISITE FOR APPROVAL U/S 80G. 4. BEING AGGRIEVED BY THE SAID ORDER DATED 14/12/20 17, THE ASSESSEE IS BEFORE US. 5. THE LD. AR SUBMITTED THAT THE ORDER OF REJECTING SECTION 80G BENEFIT BY THE CIT(EXEMPTION) SEEM TO BE GENERIC IN NATURE. T HE LD. AR SUBMITTED THAT NO VERIFICATION OF DOCUMENTS AS WELL AS THE GRANT O F SECTION 12AA REGISTRATION WAS NOT TAKEN INTO CONSIDERATION BY THE CIT(EXEMPTI ON). 6. THE LD. DR RELIED UPON THE ORDER OF THE CIT(EXEM PTION). 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIAL AVAILABLE ON RECORD. THE ASSESSEE/APPLICANT IS A TRUST CONSTITU TED UNDER TRUST DEED DATED 4 ITA NO. 1082/DEL/2018 30/5/2015 AND HAS OBTAIN REGISTRATION U/S 12AA W.E. F 1/4/2016 VIDE ORDER DATED 23/2/2017. AT THE TIME OF GRANT OF REGISTRA TION U/S 12AA, THE ASSESSEE HAS GIVEN DETAILS ABOUT THE PURPOSE AND OBJECT OF T HE APPLICANT TRUST WHICH WAS RELATED TO THE RELIGIOUS PURPOSES AND NOT FOR ANY O THER BUSINESS PURPOSE. THUS, THE CIT(EXEMPTION) HAS TOTALLY IGNORED THE FA CT THAT THE PURPOSE WAS NOT AT ALL CHANGE FROM THE CHARITABLE PURPOSE TO ANY CO MMERCIAL PURPOSE. IN-FACT, THERE IS NO PROPER REASON GIVEN BY THE CIT(EXEMPTIO N) WHILE REJECTING THE PRE- REQUISITE FOR APPROVAL U/S 80G. THEREFORE, WE ARE DIRECTING THE CIT(EXEMPTION) AFTER VERIFYING ALL THE DOCUMENTS AS PER THE PRE-RE QUIRED CONDITIONS OF GRANT OF SECTION 80G BENEFITS AND THEREAFTER GRANT THE BENEF IT OF SECTION 80G AS PER THE LAW. NEEDLESS TO SAY, THE ASSESSEE BE GIVEN OPPORT UNITY OF HEARING BY FOLLOWING PRINCIPLES OF NATURAL JUSTICE. THE APPEAL OF THE AS SESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. 8. IN RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 05 TH DAY OF OCTOBER, 2021 SD/- SD/- (PRASHANT MAHARISHI) (SUCH ITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 05/10/2021 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 5 ITA NO. 1082/DEL/2018