Aadhar Foundation, Kolhapur V. CIT, Kolhapur

ITA 1171/PUN/2012

• Counselvise Citation: 117124514 RSA 2012
• Duration Of Justice: 1 year(s) 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 28-11-2013
• Assessment Year: misc
• Appeal Filed On: 06-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VERMA
• Keywords: Charitable institution; Principle of natural justice
• Section: 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE BEFORE: SHRI R.S. PADVEKAR, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 1 171 /PN/20 1 2 ASSESSMENT YEAR : AADHAR FOUNDATION, RUKADI, AT POST - RUKADI , TAL - HATKANANGALE, DISTT. - KOLHAPUR VS. COMMISSIONER OF INCOME TAX - II, KOLHAPUR (APPELLANT) (RESPONDENT) PAN NO. AADTA2088D APPELLANT BY: SHRI S.N. PURANIK RESPONDENT BY: SMT. M.S. VERMA DATE OF HEARING : 2 9 - 11 - 2013 DATE OF PRONOUNCEMENT : 31 - 01 - 2014 ORDER P ER R.S. PADVEKAR , JM : - THIS APPEAL IS FIELD BY THE ASSESSEE CHALLENGING THE IMPUGNED ORDER OF THE LD. CIT - II, KOLHAPUR REJECTING THE APPLICATION OF THE ASSESSEE FOR GRANT OF THE REGISTRATION U/S. 12AA OF THE INCOME - TAX ACT . THE AS SESSEE HAS TAKEN FOLLOWING GROUNDS IN THE APPEAL: 1. WHETHER ON THE FACTS & CIRCUMSTANCES OF THE CASE AND IN LAW, LEARNED CIT - II WAS CORRECT IN REJECTING THE REGISTRATION OF TRUST UNDER SECTION 12A OF THE INCOME TAX ACT, 1961, BY TREATING TRUST TO BE NON - GENU INE MERELY BECAUSE SUBSCRIPTION RS.5000 AND UNSECURED LOANS OF RS.19,500 RECEIVED FROM MEMBERS WAS IN CASH. 2. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, LEARNED CIT - II HAS ERRED IN NOT ACCEPTING THE CHARITABLE ACTIVITIES DONE BY THE TRUST. 2. TH E BRIEFLY STATED FACTS ARE AS UNDER. IT IS STATED THAT THE ASSESSEE IS THE CHARITABLE TRUST REGISTERED UNDER BOMBAY PUBLIC TRUST ACT, 1950 AND HAVING OBJECTS TO PROVIDE MEDICAL FACILITIES TO THE PEOPLE AT REASONABLE RATES, PROVIDE HOUSES AND TO PROVIDE FO OD, HEALTH, LEARNING PROGRAMME TO NEEDY. THE ASSESSEE MADE AN APPLICATION IN FORM NO. 2 ITA NO. 1171/PN/2012, AADHAR FOUNDATION, KOLHAPUR 10A FOR REGISTRATION TO THE LD. CIT - II, KOLHAPUR U/S. 12A OF THE INCOME - TAX ACT . IT IS STATED THAT THE DETAILS ASKED BY THE LD. CIT - II, KOLHAPUR WERE ALSO SUBMITTED . T HE LD. CIT REJECTED THE APPLICATION OF THE ASSESSEE VIDE ORDER DATED 09 - 04 - 2012. THE ORDER OF THE LD. CIT(A) IS VERY SHORT WHICH IS REPRODUCED HERE UNDER FOR BENEFIT OF DECIDING THE ISSUE ARISING FROM THE GROUNDS TAKEN BEFORE US. 2. ON VERIFICATION OF THE DETAILS AND DOCUMENTS ATTACHED WITH APPLICATION, THE APPLICANT, VIDE THIS OFFICE LETTER DATED 22 - 02 - 2012 WAS REQUESTED TO FURNISH BY 15 TH MARCH,2012 (A) COPY OF BANK A/C STANDING IN THE NAME OF THE SOCIETY; (B) LIST OF MEMBERS OF THE SOCIETY WITH PROOF FO R PAYMENT OF MEMBERSHIP SUBSCRIPTION (C) COMPLETE DETAILS OF EXPENDITURE INCURRED ON ACTIVITIES CLAIMED DURING 31 - 03 - 2010 & 31 - 03 - 2011 AND ESTABLISH EXISTENCE OF GENUINE SOCIETY AND GENUINENESS IN ITS CLAIM OF ACTIVITY AND INVOLVEMENT OF CHARITY THEREIN. T HE APPLICANT SUBMITTED THE INFORMATION ON 05 - 03 - 2012 AND ON 06 - 03 - 2012, WHICH HAS DULY BEEN CONSIDERED. 3. I HAVE CAREFULLY CONSIDERED THE INFORMATION SUBMITTED BY THE SOCIETY. IT IS SEEN THAT THE APPLICANT HAS FURNISHED A COPY OF TRANSFER BOOK SHOWING VA RIOUS RECEIPTS OF WHICH SOME ARE CLAIMED TO BE RECEIVED FROM MEMBERS. BUT THERE ARE NO ENTRIES TO THIS EFFECT IN THE BANK A/C MAINTAINED BY THE SOCIETY. THE CLAIM OF GENUINE MEMBERSHIP THEREFORE STANDS NOT PROVED. IN THE ABSENCE OF ANY GENUINE MEMBERS, THE RE CAN NOT BE SAID TO BE GENUINE SOCIETY IN EXISTENCE. IT IS ALSO SEEN THAT THE APPLICANT CLAIMED TO HAVE TAKEN LOANS OF RS. 19500/ - AND RS.20,000/ - DURING Y.E. 31 - 03 - 2011 AND 31 - 03 - 2011, HOWEVER, IT IS SEEN THAT THERE ARE NO DEPOSITS/TRANSACTION ENTRIES I N THE BANK A/C ON THE DATES ON WHICH THE LOANS HAVE CLAIMED TO BE TAKEN. AS THE CLAIM OF LOANS TRANSACTION AS SUCH STANDS NOT PROVED, HENCE, THE GENUINENESS IN ITS CLAIM OF ACTIVITIES THE SOURCE FOR WHICH IS CLAIMED THE SAID LOANS ALSO STANDS NOT PROVED. 4 . IN VIEW OF THE ABOVE, I AM SATISFIED TO HOLD THAT THE SOCIETY FAILED TO ESTABLISH EXISTENCE OF GENUINE SOCIETY SO ALSO GENUINENESS IN ITS CLAIM OF ACTIVITIES BY FURNISHING DOCUMENTS TO THE SATISFACTION OF THE UNDERSIGNED. THE APPLICATION FOR GRANT OF REG ISTRATION U/S 12 AA DT. 09 - 01 - 2012 IS, THEREFORE, REJECTED. 3 ITA NO. 1171/PN/2012, AADHAR FOUNDATION, KOLHAPUR NOW THE ASSESSEE CHALLENGED THE IMPUGNED ORDER OF THE LD. CIT - II, KOLHAPUR. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTIES AND PERUSED THE RECORD. THE LD. COUNSEL SUBMITS THAT THE AS SESSEE FILED THE APPLICATION FOR REGISTRATION U/S. 12AA ON 09 - 01 - 2012 ALONG WITH THE NECESSARY ENCLOSURES. HE SUBMITS THAT THE ASSESSEE RECEIVED THE NOTICE DATED 22 - 02 - 2012 FROM THE LD. CIT - II, KOLHAPUR ASKING CERTAIN REQUIREMENTS AS MENTIONED IN THE SAID NOTICE AND THE ASSESSEE WAS GIVEN THE DATE FOR SUBMISSION AS 15 - 03 - 2012 BUT ALL THE INFORMATION AND DETAILS WERE SUBMITTED BEFORE THE DATE MENTIONED IN THE NOTICE ON 05 - 03 - 2012 AND 06 - 03 - 2012. HE ARGUES THAT THERE WAS NO EFFECTIVE HEARING BY THE LD. CIT NOR ANY FURTHER COMMUNICATION AND THE ASSESSEE SUDDENLY RECEIVED THE IMPUGNED ORDER REFUSING THE REGISTRATION DATED 09 - 04 - 2012 WHICH IS IN GROSS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. THE LD. COUNSEL ALSO REFERRED TO IMPUGNED ORDER AND SUBMITS THAT T HE ASSESSEE FOUNDATION IS IN VERY SMALL VILLAGE RUKADI AND THE ACCOUNTS OF THE TRUST ARE AUDITED BY THE QUALIFIED CHARTERED ACCOUNTANT . THE MEMBERS OF THE SOCIETY REGISTERED UNDER S OCIET IES R EGISTRATION ACT, 1960 ARE THE SIGNATORY MEMBER S TO M EMORANDUM. HE SUBMITS THAT IN SPITE OF MEMBERS NOT PAYING THE FEE , EXISTENCE OF THE ASSESSEE SOCIETY CANNOT BE DOUBTED. HE SUBMITS THAT OBJECTS OF THE TRUST ARE CHARITABLE IN NATURE AND THERE IS NO REASON TO DENY THE REGISTRATION. THE ASSESSEE HAS FILED THE PAPER B OOK IN WHICH THE FOLLOWING DOCUMENTS ARE FILED: 1. OBJECTS OF THE TRUST (ENGLISH TRANSLATION). 2. CERTIFIED COPY OF REGISTRATION CERTIFICATE UNDER SOCIETIES REGISTRATION ACT, 1860 AND MEMORANDUM OF ASSOCIATION AND BYE LAWS/REGULATIONS OF SOCIETY/TRUST. 3. CERTIFIED COPY OF REGISTRATION CERTIFICATE SOCIETIES REGISTRATION RULES, 1860. 4. CERTIFICATE FOR NO INFRINGEMENT UNDER SOCIETIES REGISTRATION ACT, 1860 AND INCOME TAX ACT, 1961. 5. LIST OF MANAGING COMMITTEE ALONG WITH DESIGNATION AND PAN DETAILS. 4 ITA NO. 1171/PN/2012, AADHAR FOUNDATION, KOLHAPUR 6. YEAR WISE NOTES ON ACTIVITIES OF THE INSTITUTION FOR F.Y. 2008 - 09, F.Y. 2009 - 10 AND 2010 - 11 (SHORT SUMMARY) 7. AUDIT REPORT, INCOME & EXPENDITURE ACCOUNT, BALANCE SHEET ALONG WITH SCHEDULES OF THE INSTITUTION FOR THE PERIOD 01 - 04 - 2009 TO 31 - 03 - 2010 (UNDER BPT ACT). 8. AUDIT REPORT, INCOME & EXPENDITURE ACCOUNT, BALANCE SHEET ALONG WITH SCHEDULES OF THE INSTITUTION FOR THE PERIOD 01 - 04 - 2010 TO 31 - 03 - 2011 (UNDER BPT ACT) 9. LETTER OF REQUIREMENT FROM OFFICE OF COMMISSIONER OF INCOME TAX II, DATED 22 - 02 - 2012 REGAR DING GRANT OF REGISTRATION U/S. 12A. 10. REPLY DATED 05 - 03 - 2012 TO CITS LETTER DATED 22 - 02 - 2012 ALONG WITH, A. COPY OF BANK A/C STATEMENT. B. LIST OF MEMBERS OF SOCIETY WITH MEMBERSHIP SUBSCRIPTION ALONG WITH PROOF. C. DETAILS OF EXPENDITURE INCURRED ON A CTIVITIES FOR THE YEAR 31 - 03 - 2011 ALONG WITH PROOF. D. FULL DETAILS OF ADVANCES GIVEN FOR THE YEAR ENDED 31 - 03 - 2010 AND 31 - 03 - 2011 (NIL STATEMENTS) E. DETAILS OF EXPENDITURE INCURRED ON ACTIVITIES FOR THE YEAR 31 - 03 - 2010 ALONG WITH PROOF. 11. CORRESPONDENC E FOR APPLICATION U/S 12AA ALONG WITH DETAILS OF UNSECURED LOANS FOR THE YEAR ENDED 31 - 03 - 2010 AND 31 - 03 - 2011 ALONG WITH RECEIPT VOUCHERS AND CONFIRMATIONS SUBMITTED ON 06 - 03 - 2012 AS ADVISED BY CA 12. TRANSFER LEDGERS (SUMMARIZED MONTHLY RECEIPT/PAYMENT) 1 3. COPY OF COMPUTERIZED: - A. RECEIPT AND PAYMENTS ACCOUNT, B. CASH BOOK C. BANK BOOK (BANK OF INDIA) F OR THE PERIOD 01 - 04 - 2009 TO 31 - 03 - 2010 14. COPY OF COMPUTERIZED: - A. RECEIPT AND PAYMENTS ACCOUNT, B. CASH BOOK C. BANK BOOK (BANK OF INDIA) F OR THE PER IOD 01 - 04 - 2010 TO 31 - 03 - 2011 4. WE HAVE ALSO HEARD THE LD. DR. WE FIND FORCE IN THE ARGUMENT OF THE LD. COUNSEL THAT NO EFFECTIVE HEARING HAS BEEN GIVEN BY THE LD. CIT - 5 ITA NO. 1171/PN/2012, AADHAR FOUNDATION, KOLHAPUR II, KOLHAPUR. THE LD. CIT HAS REJECTED THE APPLICATION BY GIVING THE REASON THAT THE SOCIETY FAIL ED TO ESTABLISH EXISTENCE AS GENUINE SOCIETY . T HE LD. CIT HAS ALSO DOUBTED THE GENUINENESS IN RESPECT OF THE ACTIVITIES OF THE ASSESSEE SOCIETY. WE FURTHER FIND THAT NO EFFECTIVE HEARING IS GIVEN TO THE ASSESSEE BY THE LD. CIT AND IN GROSS VI OLATION OF THE PRINCIPLES OF NATURAL JUSTICE , T HE APPLICATION OF THE ASSESSEE HAS BEEN DISMISSED. WE, THEREFORE, CONSIDER IT FIT TO RESTORE THE MATTER TO THE FILE OF THE CIT - II, KOLHAPUR FOR FRESH CONSIDERATION ON THE APPLICATION FILED BY THE ASSESSE FOR GETTING THE REGISTRATION U/S. 12AA OF THE ACT. THE CIT - II, KOLHAPUR IS DIRECT TO GIVE THE EFFECTIVE HEARING TO THE ASSESSEE AS PER THE PRINCIPLES OF NATURAL JUSTICE AND AFTER CONSIDERING ALL THE DOCUMENTARY EVIDENCE, HE SHOULD DECIDE THE APPLICATION. WE, ACCORDINGLY, SET ASIDE THE ORDER OF THE CIT - II, KOLHAPUR AND MATTER IS REMITTED BACK IN THE LIGHT OF OUR ABOVE DIRECTIONS. 5. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 31 - 01 - 201 4 SD/ - SD/ - ( R.K. PANDA ) ( R.S. PADVEKAR ) ACCOUNTANT MEMBER JUDICIAL MEMBER RK /PS PUNE , DATED : 31 ST JANUARY, 2014 COPY TO 1 ASSESSEE 2 DEPARTMENT 3 THE CIT - II, KOLHAPUR 4 THE CIT, KOLHAPUR 5 THE DR, ITAT, A BENCH, PUNE . 6 GUARD FILE. //TRUE COPY// BY ORDER PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE