Shri Marwari Yuva Manch Charitable Trust, RAJKOT-GUJARAT V. The CIT-(Exemption), Ahmedabad

ITA 127/RJT/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6698 (ITAT-RAJKOT)
• Duration Of Justice: 10 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 21-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution; Principle of natural justice
• Section: 80G

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT [CONDUCTED THROUGH E-COURT AT AHMEDABAD] BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER, AND SHRI S. S. GODARA, JUDICIAL MEMBER. ITA NO. 127/RJT/2016 (ASSESSMENT YEAR:N.A.) SHRI MARWARI YUVA MANCH CHARITABLE TRUST, KALPESH S. DOSHI & CO. CHARTERED ACCOUNTANTS, 411, COSMO COMPLEX, MAHILA COLLEGE CIRCLE, RAJKOT 360 001 APPELLANT VS. COMMISSIONER OF INCOME TAX (EXEMPTIONS), AHMEDABAD AAYAKAR BHAVAN, 1 ST FLOOR, ROOM NO.111-12, ASHRAM ROAD, RAJKOT-360001 RESPONDENT PAN: AADTM0974A /BY ASSESSEE : SHRI KALPESH DOSHI, A.R. /BY REVENUE : SHRI YOGESH PANDEY, CIT. D.R. /DATE OF HEARING : 16.02.2017 /DATE OF PRONOUNCEMENT : 27.02.2017 ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS ASSESSEES APPEAL ARISES AGAINST THE CIT(E), A HMEDABADS EX PARTE ORDER DATED 28.03.2016, PASSED IN APPEAL NO. ITA. NO. 127/RJT/2016 (SHRI MARWARI YUVA MANCH CHARITABLE TRUST, GANDHIDHAM VS. CIT(E)) - 2 - CIT(E)/AHD/80G/367/2015-16/538, REJECTING ITS APPLI CATION FOR REGISTRATION, IN PROCEEDINGS U/S.80G(5) OF THE INCOME TAX ACT, 19 61, IN SHORT THE ACT. 2. FACTS OF THE CASE ARE IN A VERY NARROW COMPASS. THIS ASSESSEE IS STATED TO BE A CHARITABLE TRUST. IT SOUGHT SECTION 80G(5) REGISTRATION VIDE APPLICATION DATED 04.09.2015. WE NOTICE THAT THE CIT(E) DECLIN ES THE SAME VIDE AN EX PARTE ORDER READING AS UNDER: 2. A LETTER DATED 03.11.2015 WAS ISSUED TO THE APP LICANT TO FURNISH DETAILED NOTE ON THE ACTIVITIES ACTUALLY CARRIED OUT BY THE TRUST AS WELL AS THE FOLLOWING DOCUMENTS / DETAILS: 1. PLEASE GIVE DETAILS OF INSTITUTION BEING RUN/PRO POSED TO BE RUN BY YOUR TRUST. 2. PLEASE FURNISH NAME AND ADDRESS OF BRANCHES, IF ANY. 3. PLEASE STATE WHETHER JURISDICTION OVER THE CASE VEST WITH CIT(E),AHMEDABAD WITH DETAILS OF WARD/CIRCLE WHERE YOU ARE FILING RE TURN OF INCOME. 4. CERTIFIED COPY OF TRUST DEED /M.O.A., IF IT IS NOT IN ENGLISH THEN CERTIFIED ENGLISH TRANSLATION ALSO. 5. COPY OF PAN CARD OF TRUSTEES WITH DETAILS OF C IRCLE/WARD WHERE THEY ARE FILING RETURN OF INCOME. 6. PLEASE STATE WHETHER AREA OF OPERATION OF YOUR ACTIVITIES MENTIONED IN THE DEED ?(NOTE: AREA OF OPERATION SHOULD BE WITHIN IND IA) 7. PLEASE SUBMIT LIST OF MAIN OBJECTS OF THE TRU ST AND SPECIFY LIKE RELIGIOUS, RELIEF OF THE POOR, EDUCATION, MEDICAL RELIEF ,ETC. , AND ANY OTHER OBJECTS OF GENERAL PUBLIC UTILITY, IF ANY. 8. PLEASE CLARIFY WHETHER ANY OF THE OBJECTS IS RELIGIOUS IN NATURE ?(MENTION THE NUMBER OF THE CLAUSE AND PAGE NUMBER OF THE DEE D.) 9. PLEASE ALSO CLARIFY WHETHER ANY OF THE OBJECT S IS NEITHER RELIGIOUS NOR CHARITABLE ? (MENTION THE NUMBER OF THE CLAUSE AND PAGE NUMBER OF THE DEED ?) 10. PLEASE STATE WHETHER THE OBJECTS OF THE TRUST A RE FOR ANY PARTICULAR CASTE, CREED, RELIGION OR COMMUNITY. 11. WHETHER DEED CONTAINS INVESTMENT CLAUSE? IF NOT , THEN FURNISH DECLARATION U/S. 11(5) OF THE I.T. ACT? 12. PLEASE STATE WHETHER DEED CONTAINS AMENDMENT/ ALTERATIONS CLAUSE? (TO BE AMENDED WITH THE APPROVAL OF CIT(EXEMPTION), AHMEDA BAD. 13. PLEASE SPECIFY THE CLAUSE IN TRUST DEED REGARD ING REVOCABILITY OR IRREVOCABILITY. 14. PLEASE STATE WHETHER DEED CONTAINS UTILIZATION CLAU SE? (SPECIFYING THAT THE PROFITS ARE TO BE USED ONLY FOR THE OBJECTS OF THE TRUST.) 15. PLEASE SPECIFY THE CLAUSE IN THE TRUST DEED WH ICH SAYS THAT BENEFICIARIES WOULD BE WITHOUT DISCRIMINATION ON THE BASIS OF CAS TE, CREED, RELIGION OR SEX AND NOT FOR SPECIFIC INDIVIDUALS. ITA. NO. 127/RJT/2016 (SHRI MARWARI YUVA MANCH CHARITABLE TRUST, GANDHIDHAM VS. CIT(E)) - 3 - 16. PLEASE STATE ANY PART OF TRUST PROPERTY OR INC OME IS USED OR APPLIED OR ENSURES DIRECTLY OR INDIRECTLY FOR THE BENEFIT OF A NY PERSON SPECIFIED U/S.13(3) OF THE IT. ACT? 17. COPY OF BANK ACCOUNT SINCE INCEPTION OF TRUST OR LAST THREE YEARS. 18. DETAILS OF DONATIONS RECEIVED OR PAID AND CONF IRMATION/PAN OF THE DONORS. 19. DETAILS OF MOVABLE & IMMOVABLE ASSETS HELD AS ON DATE. 20. PLEASE GIVE DETAILS OF PREMISES OF TRUST WHETH ER PREMISES OWNED BY THE TRUST OR RENTED. WHETHER NOC FROM THE PREMISES OWNE R IS OBTAINED OR RENTAL AGREEMENT IS ENCLOSED. 21. PLEASE SUBMIT DOCUMENTARY EVIDENCES OF ACTUAL CHARITABLE ACTIVITIES CARRIED OUT BY THE TRUST FROM THE DATE OF INCEPTION OF TRUS T TILL DATE. 22. WHETHER REGISTRATION U/S.-12AA HAS BEEN REFUSE D/REJECTED EARLIER? IF SO, STATE BRIEFLY THE REASONS FOR SUCH REFUSAL/REJECTIO N. 23. PLEASE SUBMIT COPY OF AUDITED ACCOUNTS LIKE CO PY OF RECEIPT AND PAYMENT A/C., INCOME & EXPENDITURE A/C, BALANCE SHEET, FOR THREE YEARS OR FROM THE DATE OF CREATION TILL DATE, WHICHEVER IS LESS. 24. PLEASE GIVE DETAILS AS TO HOW THE TRUST GENERA TES FUNDS FOR ACHIEVING THE OBJECT OF TRUST. 25. PLEASE SUBMIT EVIDENCES THAT THE CORPUS AMOUNT HAS BEEN TRANSFERRED TO THE TRUST/ INSTITUTION. 26. PLEASE SPECIFY THAT THE TRUST IS IN RECEIPT OF AMOUNTS MENTIONED IN FIRST PROVISO TO SECTION 2(15) OF THE I.T.ACT. 27. COPY OF CERTIFICATE OF UNDERTAKING? 28. COPY OF CERTIFICATE U/S. 13(1) (C) OF THE I.T. ACT? 29. PLEASE SUBMIT DETAILS OF BUSINESS CONDUCTED BY THE RUST/INSTITUTION, IF ANY. IF THE ASSESSEE TRUST/INSTITUTION IS CONDUCTING BUSINE SS, CONFIRM WHETHER SEPARATE BOOKS OF ACCOUNTS ARE MAINTAINED FOR BUSIN ESS. 30. PLEASE SPECIFY UNDER WHICH OF THE BELOW-MENTION ED CATEGORY YOUR TRUST FALLS: - PUBLIC CHARITABLE TRUST OR A TRUST REGISTERED UND ER SOCIETIES REGISTRATION ACT, 1860. - TRUST CONSTITUTED UNDER ANY LAW CORRESPONDING TO SOCIETIES REGISTRATION ACT, 1860. - COMPANY CONSTITUTED U/ S 25 OF COMPANIES ACT, 1956. - UNIVERSITY ESTABLISHED BY LAW. - ANY OTHER EDUCATIONAL INSTITUTION RECOGNIZED BY T HE GOVERNMENT OR BY A UNIVERSITY ESTABLISHED BY LAW OR AFFILIATED T O ANY UNIVERSITY ESTABLISHED BY LAW. - AN INSTITUTION FINANCED WHOLLY OR IN PART BY THE GOVERNMENT OR LOCAL AUTHORITY. 31. FURTHER, IT IS SEEN THAT AS PER TRUST DEED THE DISSOLUTION CLAUSE IS NOT PROPER . THE ABOVE MENTIONED INQUIRY ABOUT THE ACTUAL ACTIVI TIES OF THE TRUST IS NECESSARY IN VIEW OF THE REQUIREMENT FOR APPROVAL O F AN INSTITUTION OR FUND U/S 80G STIPULATED IN RULE 11 AA(3) (3) THE COMMISSIONER MAY CALL FOR SUCH DOCUMENTS OR INFORMATION FROM THE INSTITUTION OR FUND OR CAUSE SUCH INQUIRIES TO BE M ADE AS HE MAY DEEM NECESSARY IN ORDER TO SATISFY HIMSELF ABOUT THE GENUINENESS OF A CTIVITIES OF SUCH INSTITUTION OR FUND. ITA. NO. 127/RJT/2016 (SHRI MARWARI YUVA MANCH CHARITABLE TRUST, GANDHIDHAM VS. CIT(E)) - 4 - 3. HOWEVER, ON GIVEN DATE, NEITHER APPLICANT ATTEND ED THE OFFICE NOR FURNISHED ANY DETAILS/ DOCUMENTS NOR SOUGHT ANY ADJOURNMENT. 4. FOLLOWING THE PRINCIPLES OF NATURAL JUSTICE, ONE MORE OPPORTUNITY WAS GIVEN TO THE ASSESSEE. ANOTHER NOTICE WAS ISSUED TO THE A PPLICANT ON L5.02.2016 . ON TOP OF THIS LETTER, 'FINAL OPPORTUNITY' IS WRITTEN IN B OLD LETTER TO INTIMATE THE ASSESSEE THAT THIS IS THE LAST OPPORTUNITY FOR PROCEEDINGS U /S 80G(5)OF THE INCOME-TAX ACT, 1961. VIDE ABOVE-MENTIONED LETTER, THE CASE WAS FIX ED FOR 24.02.2016. IN THIS LETTER, IT IS MADE AMPLY CLEAR TO THE APPLICANT THAT IN CAS E OF NON-COMPLIANCE, THEIR APPLICATION FOR REGISTRATION IS LIABLE TO BE REJECT ED FOR WANT OF THE DETAILS AS ASKED FOR IN THE ABOVE-SAID LETTER. THE APPLICANT HAS NOT RESPONDED TO THIS LETTER ALSO. SINCE THE APPLICANT HAS NOT FURNISHED THE REQUIRED DETAILS, ACCORDINGLY I AM CONSTRAINED TO DISPOSE OF THE REGISTRATION APPLICAT ION ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 5. PERUSAL OF RECORDS REVEALS THAT THE APPLICANT HA S NEITHER CARRIED OUT ANY CHARITABLE/RELIGIOUS ACTIVITIES, NOR ESTABLISHED CO RPUS TO UNDERTAKE THE CHARITABLE ACTIVITIES. THIS CLEARLY INDICATES THAT THE APPLICA NT DOES NOT HAVE INTENTION EVEN TO START CHARITABLE/RELIGIOUS ACTIVITIES. SECTION 80G( 5) RWR 11AA OF INCOME TAX RULE 1962 MAKES IT VERY CLEAR THAT BEFORE GRANTING APPRO VAL UNDER THIS SECTION, THE COMMISSIONER HAS TO SATISFY HIMSELF ABOUT THE GENUI NENESS OF THE ACTIVITIES OF THE TRUST OR INSTITUTION AND ALSO HE HAS TO VERIFY THAT THESE ACTIVITIES ARE IN CONSONANCE WITH THE OBJECTS OF THE TRUST OR INSTITUTION. RELIA NCE IN THIS REGARD IS PLACED ON THE CASE OF HARDAYAL CHARITABLE AND EDUCATIONAL TRUST V S. CIT-II, AGRA, 150 TTJ 384 (AGRA) (2012) OR 25 TAXMANN.COM 28 (AGRA). AS DISCU SSED ABOVE,-.THE APPLICANT HAS FAILED TO FILE DOCUMENTARY EVIDENCES TO ENABLE ME TO SATISFY ABOUT THE GENUINENESS OF ITS ACTIVITIES AND TO VERIFY THESE A CTIVITIES ARE IN CONSONANCE WITH ITS OBJECTS. 3. WE HAVE HEARD RIVAL SUBMISSIONS. IT IS EVIDENT FROM THE CIT(E)S ABOVE EXTRACTED ORDER THAT HE PROCEEDED TO DECIDE A SSESSEES REGISTRATION PLEA WITHOUT EVEN ENSURING AS TO WHETHER IT HAD BEEN ACT UALLY SERVED OF THE NOTICES OF HEARING IN QUESTION OR NOT. SUFFICE TO SAY, LEA RNED COUNSEL REPRESENTING ASSESSEE SUBMITS THAT THE ASSESSEE IS AND HAS ALWAY S BEEN VERY MUCH PARTICULAR IN PURSUING ITS SECTION 80G (5) REGISTRA TION IN QUESTION. WE THUS DEEM IT APPROPRIATE IN THE LARGER INTEREST OF JUSTI CE THAT THE ASSESSEE DESERVES ONE MORE EFFECTIVE OPPORTUNITY OF HEARING SO AS TO PRESENT ITS CASE ON THE IMPUGNED REGISTRATION ASPECT. WE THUS REMIT THE IN STANT ISSUE BACK TO THE LEARNED CIT(E) FOR AFRESH ADJUDICATION AS PER LAW A FTER AFFORDING ADEQUATE OPPORTUNITY OF HEARING TO ASSESSEE WHO SHALL BE ENT ITLED TO AVAIL THREE ITA. NO. 127/RJT/2016 (SHRI MARWARI YUVA MANCH CHARITABLE TRUST, GANDHIDHAM VS. CIT(E)) - 5 - EFFECTIVE OPPORTUNITIES TO STATE ITS REGISTRATION P LEA BY WAY OF LEADING ALL NECESSARY EVIDENCE. 4. THIS ASSESSEES APPEAL SUCCEEDS FOR STATISTICAL PURPOSES. [PRONOUNCED IN THE OPEN COURT ON THIS THE 27 TH DAY OF FEBRUARY, 2017.] SD/- SD/- ( PRAMOD KUMAR ) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 27/02/2017 TRUE COPY S.K.SINHA COPY OF THE ORDER FORWARDED TO:- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT, RAJKOT