Vidhyasthali Shiksha Samiti, Jaipur V. CIT (Exemption), Jaipur

ITA 1284/JPR/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9113 (ITAT-JAIPUR)
• Duration Of Justice: 8 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2019-2020
• Appeal Filed On: 18-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMRISH BEDI CIT DHK
• Keywords: Opportunity of being heard; Competent authority; Set aside
• Section: 143(3); 12AA; 12

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCH VC A, JAIPUR JH FOT; IKY JKWO] U;KF;D LNL; ,O A JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA NO. 1284/JP/2019 VIDHYASTHALI SHIKSHA SAMITI, A348, MALVIYA NAGAR, JAIPUR. CUKE VS. COMMISSIONER OF INCOME TAX (EXEMPTIONS) JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AABTV 0140 R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI AMRISH BEDI (CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 28.07.2020. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 05/08/2020. VKNS'K@ ORDER PER VIJAY PAL RAO, JM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 30 TH SEPTEMBER, 2019 PASSED BY THE LD. COMMISSIONER OF INCOME TAX ( EXEMPTIONS) UNDER SECTION 12AA(1)(B)(II) OF THE I.T. ACT WHEREBY THE APPLICAT ION OF THE ASSESSEE SEEKING REGISTRATION UNDER SECTION 12AA OF THE ACT WAS REJE CTED. THE ASSESSEE HAS RAISED THE FOLLOWING GROUND :- THE LD. CIT HAS ERRED ON FACTS AND IN LAW IN REJE CTING THE APPLICATION OF ASSESSEE FOR GRANT OF REGISTRATION U/S 12AA OF INCO ME TAX ACT, 1961. HE HAS FURTHER ERRED IN REFUSING REGISTRATION ON SURMI SES & CONJECTURES. 2 ITA NO. 1284-19 V IDHYASTHALI SHIKSHA SAMITI, JAIPUR. DUE TO THE PREVAILING SITUATION OF COVID 19 PANDEMI C, THE HEARING OF THE APPEAL WAS CONCLUDED THROUGH VIDEO CONFERENCE. 2. THE ASSESSEE IS A SOCIETY REGISTERED UNDER RAJAS THAN SOCIETIES REGISTRATION ACT, 1958. THE MAIN OBJECT OF THE ASSESSEE SOCIETY IS T O IMPART EDUCATION. THE ASSESSEE IS STATED TO HAVE RUNNING SCHOOLS/COLLEGES IN THE NAME OF VIDHYASTHALI PUBLIC SCHOOL, VIDHYASTHALI PUBLIC ITI COLLEGE AND VIDHYASTHALI TE ACHER TRAINING COLLEGE IN DISTRICT ALWAR. THE ASSESSEE FILED APPLICATION IN FORM 10A ON 19.03.2019 FOR REGISTRATION UNDER SECTION 12AA OF THE IT ACT. THE LD. COMMISSIONER (E XEMPTIONS) REJECTED THE APPLICATION OF THE ASSESSEE WHILE PASSING THE IMPUGNED ORDER. THE LD. A/R OF THE ASSESSEE HAS SUBMITTED THAT THE APPLICATION OF THE ASSESSEE WAS REJECTED BY THE LD. COMMISSIONER (E) ON TWO REASONS I.E. (I) ASSESSEE DID NOT SUBMIT ORI GINAL DOCUMENTS REGARDING ESTABLISHMENT OF THE TRUST/SOCIETY AND (II) THE ASS ESSEE DID NOT FURNISH COMPLETE DETAILS/EVIDENCE IN RESPECT OF HUGE CASH PAYMENT TO WARDS SALARY AND WAGES. HE HAS FURTHER SUBMITTED THAT AT THE TIME OF GRANTING REGI STRATION UNDER SECTION 12AA, THE COMMISSIONER (E) IS REQUIRED TO SATISFY HIMSELF ABO UT THE OBJECTS OF THE TRUST AND GENUINENESS OF ITS ACTIVITIES. THERE IS NO FINDING OF THE LD. COMMISSIONER THAT THE OBJECTS OF THE TRUST ARE NOT CHARITABLE OR THE ACTI VITIES ARE NOT GENUINE. HE HAS REFERRED TO THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) FOR THE ASSESSMENT YEAR 2017-18 AND SUBMITTED THAT THE AO HAS EXAMINED ALL THE DETA ILS AND BOOKS OF ACCOUNT OF THE ASSESSEE AND ACCEPTED THAT THE ASSESSEE IS ENGAGED IN EDUCATION ACTIVITIES AND IS CARRYING THE ACTIVITIES AS PER THE OBJECTS. THUS T HE LD. A/R HAS SUBMITTED THAT THE REASONS ASSIGNED BY THE COMMISSIONER FOR REJECTING THE APPLICATION FOR GRANT OF 3 ITA NO. 1284-19 V IDHYASTHALI SHIKSHA SAMITI, JAIPUR. REGISTRATION IS CONTRARY TO THE PROVISIONS OF SECTI ON 12AA AS WELL AS RULE 17A OF THE IT RULES. HE HAS FURTHER SUBMITTED THAT AS PER RULE 1 7A OF THE IT RULES, AN APPLICATION UNDER SECTION 12AA FOR REGISTRATION OF A CHARITABLE OR RELIGIOUS TRUST/INSTITUTION SHALL BE MADE IN FORM NO. 10A ACCOMPANIED BY SELF CERTIFIED COPY OF INSTRUMENT CREATING THE TRUST OR ESTABLISHING THE INSTITUTION. THE ASSESSE E FILED SELF ATTESTED COPIES OF THE TRUST DEED, REGISTRATION OF THE SOCIETY ETC. ALONG WITH T HE APPLICATION. THEREFORE, THERE WAS NO REQUIREMENT FOR THE ASSESSEE TO SUBMIT THE ORIGI NAL OF THESE DOCUMENTS. AS REGARDS THE SECOND OBJECTION OF THE REASON FOR REJECTING TH E APPLICATION, THE LD. A/R HAS SUBMITTED THAT THOUGH THE ASSESSEE SUBMITTED ALL TH E DETAILS REQUIRED BY THE LD. COMMISSIONER (E), HOWEVER, THE SAME WERE NOT ACCEPT ED DUE TO THE REASON THAT IT WAS NOT FURNISHED IN THE FORM AS PROVIDED AT PAGE 1 OF THE ORDER. THE AO WHILE PASSING THE SCRUTINY ASSESSMENT UNDER SECTION 143(3) FOR THE AS SESSMENT YEAR 2017-18 HAS ACCEPTED THE SALARY PAYMENTS MADE BY THE ASSESSEE, THEREFORE, THERE WAS NO QUESTION OF DOUBTING THE GENUINENESS OF THE ACTIVITIES OF TH E ASSESSEE. THUS THE LD. A/R HAS SUBMITTED THAT THE IMPUGNED ORDER OF THE LD. COMMIS SIONER (E) MAY BE SET ASIDE AND REGISTRATION UNDER SECTION 12AA OF THE ACT BE GRANT ED TO THE ASSESSEE. IN SUPPORT OF HIS CONTENTION, HE HAS RELIED UPON THE FOLLOWING DECISI ONS :- VIDYADAYANI SHIKSHA SAMITI VS. CIT (E) 161 DTR 265 (DEL.)(TRIB.) TSURPHUL LABRANG VS. DIT (E) 159 ITD 848 (DELHI)(TRIB.) SWARGIYA JAGANNATH JATTEWAR SHIKSHAN SANSTHA VS. CIT 141 ITD 543 (NAG.)(TRIB.) 4 ITA NO. 1284-19 V IDHYASTHALI SHIKSHA SAMITI, JAIPUR. 3. ON THE OTHER HAND, THE LD. D/R HAS SUBMITTED THA T THE LD. COMMISSIONER (E) HAS CLEARLY MENTIONED IN THE IMPUGNED ORDER THAT THE AS SESSEE HAS FAILED TO SUBMIT THE ORIGINAL DOCUMENTS REGARDING ESTABLISHMENT OF THE T RUST/SOCIETY AS WELL AS THE EVIDENCE IN SUPPORT OF HIS CLAIM. THE ORIGINAL DOCUMENTS WER E REQUIRED FOR VERIFICATION AND SATISFACTION OF THE LD. COMMISSIONER (E) ON THE POI NT OF OBJECTS OF THE ASSESSEE BEING CHARITABLE AND THE ACTIVITIES OF THE ASSESSEE ARE G ENUINE. THE ASSESSEE HAS UNDISPUTEDLY NOT PRODUCED THE ORIGINAL DOCUMENTS FO R VERIFICATION OF THE LD. COMMISSIONER (E) AS WELL AS THE REQUISITE INFORMATI ON AS CALLED UPON BY THE LD. COMMISSIONER (E). HE HAS RELIED UPON THE IMPUGNED ORDER OF THE LD. COMMISSIONER (E). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD. AT THE OUTSET, WE NOTE THAT THE LD. COMMIS SIONER (E) WHILE CONSIDERING THE APPLICATION OF THE ASSESSEE SEEKING REGISTRATION UN DER SECTION 12AA OF THE IT ACT HAS OBSERVED THAT IN ORDER TO VERIFY THE OBJECTS OF THE ASSESSEE AS CHARITABLE AND GENUINENESS OF THE ACTIVITIES, THE ASSESSEE WAS DIR ECTED TO PRODUCE THE ORIGINAL DOCUMENTS FOR VERIFICATION AS WELL AS THE DETAILS O F THE STAFF/EMPLOYEES OF THE ASSESSEE, SALARY PAYMENT AND PF/ESI DEDUCTION. THE LD. COMMI SSIONER (E) HAS REPRODUCED THE PROFORMA UNDER WHICH THE INFORMATION WAS REQUIRED T O BE FURNISHED BY THE ASSESSEE. SINCE THE ASSESSEE HAS NOT PRODUCED THE REQUISITE O RIGINAL DOCUMENTS FOR VERIFICATION AS WELL AS THE DETAILS AS ASKED FOR BY THE LD. COMMISS IONER (E) TO VERIFY THE GENUINENESS OF THE ACTIVITIES, THEREFORE, THE LD. COMMISSIONER (E) HAS REJECTED THE APPLICATION ON THE REASONS AS DISCUSSED IN PARA 4 TO 6 AS UNDER :- 5 ITA NO. 1284-19 V IDHYASTHALI SHIKSHA SAMITI, JAIPUR. 4. AS DISCUSSED ABOVE, THE APPLICANT DID NOT SUBM IT ORIGINAL DOCUMENTS REGARDING ESTABLISHMENT OF THE TRUST/SOCI ETY AS WELL AS EVIDENCES IN SUPPORT OF HIS CLAIM. UNDER RULE 17A O F INCOME TAX RULES, 1962 THE APPLICANT IS REQUIRED TO PRODUCE ORIGINAL DOCUMENT REGARDING ESTABLISHING OF THE TRUST/SOCIETY FOR VERIFICATION BUT THE SAME HAS NOT BE DONE BY THE APPLICANT. 5. TO DECIDE THE MATTER OF SEEKING REGISTRATION U/S 12AA, THE GENUINENESS OF THE ACTIVITIES BEING UNDER TAKEN BY THE APPLICANT ARE ALSO TO BE EXAMINED. THE APPLICANT HAS NOT SUBMITTED ANY SUCH DETAILS AND OTHER INFORMATION. THEREFORE, IT IS NOT KNOWN THAT THE APPLICANT IS ACTUALLY CARRYING OUT THE ACTIVITIES AS PER ITS OBJECTS. THU S, THE CHARITABLE NATURE AND GENUINENESS OF THE ACTIVITIES OF THE APPLICANT COULD NOT BE ESTABLISHED. 6. SUFFICIENT OPPORTUNITY HAS BEEN PROVIDED TO THE APPLICANT TO PRODUCE DETAILS AND DOCUMENTS IN SUPPORT OF HIS CLA IM FOR REGISTRATION U/S 12AA OF THE INCOME TAX ACT, 1961 BUT APPLICANT HAVE FAILED TO DO SO. IN THE LIGHT OF THE ABOVE FACTS, THE APPLICATION SEEKI NG REGISTRATION U/S 12AA IS HEREBY REJECTED AND FILED. THE LD. A/R HAS GIVEN MUCH EMPHASIS ON RULE 17A OF THE IT RULES WHICH REQUIRES THE APPLICATION IN FORM NO. 10A FOR GRANT OF REGISTRATI ON UNDER SECTION 12AA SHALL BE ACCOMPANIED BY THE SELF ATTESTED COPY OF THE INSTRU MENT OF CREATION AND OTHER DOCUMENTS OF ESTABLISHMENT OR CREATION OF THE INSTI TUTION/TRUST ETC. THUS HE HAS CONTENDED THAT ONCE THE ASSESSEE HAS FILED SELF ATT ESTED DOCUMENTS, THERE WAS NO REQUIREMENT FOR FILING THE ORIGINAL DOCUMENTS. WE DO NOT ACCEPT THIS CONTENTION OF THE LD. A/R OF THE ASSESSEE DUE TO A SIMPLE REASON THAT RULE 17A OF THE IT RULES PROVIDES THE PROCEDURE AND MODE OF SUBMITTING THE APPLICATIO N IN FORM 10A FOR SEEKING 6 ITA NO. 1284-19 V IDHYASTHALI SHIKSHA SAMITI, JAIPUR. REGISTRATION UNDER SECTION 12AA OF THE IT ACT BUT T HE SAID RULE DOES NOT RESTRICT THE JURISDICTION OF THE COMPETENT AUTHORITY TO VERIFY T HE DOCUMENTS PRODUCED BY THE ASSESSEE WITH THE ORIGINAL ONES. THEREFORE, IN THE PROCESS OF EXAMINATION OF THE APPLICATION OF THE ASSESSEE, THE COMPETENT AUTHORIT Y CAN VERY WELL ASK THE APPLICANT TO PRODUCE THE ORIGINAL DOCUMENTS FOR VERIFICATION AND HIS SATISFACTION. THEREFORE, NON PRODUCTION OF ORIGINAL DOCUMENTS AS REQUIRED BY THE LD. COMMISSIONER (E) AS WELL AS NOT FILING ANY RESPONSE TO THE SAID REQUISITION OF THE LD. COMMISSIONER (E) AMOUNTS TO FAILURE ON THE PART OF THE ASSESSEE TO ASSIST THE COMPETENT AUTHORITY IN THE PROCESS OF VERIFICATION AND SATISFYING HIMSELF ABOUT THE CHARI TABLE NATURE OF OBJECTS OF THE ASSESSEE TRUST. FURTHER IN ORDER TO EXAMINE THE GENUINENESS OF THE ACTIVITIES, THE LD. COMMISSIONER (E) CALLED FOR THE INFORMATION REGARDI NG THE STAFF AND TEACHERS OF THE ASSESSEE, SALARY RECEIVED BY THEM AND PF/ESI DEDUCT ION. THE ASSESSEE HAS NOT FURNISHED THE COMPLETE DETAILS AS CALLED FOR BY THE LD. COMMISSIONER (E). ACCORDINGLY, WE FIND THAT THE ASSESSEE HAS FAILED TO COMPLY WITH THE DIRECTIONS OF THE LD. COMMISSIONER (E) WHILE PROCESSING THE APPLICATION O F THE ASSESSEE FOR SEEKING REGISTRATION UNDER SECTION 12AA OF THE IT ACT. THE ASSESSMENT ORDER PASSED BY THE AO CANNOT PREVAIL OVER THE DECISION OF LD. COMMISSIONE R (E) AND MITIGATE THE REQUIREMENT OF VERIFICATION AND SATISFACTION OF THE LD. COMMISS IONER (E) ABOUT THE OBJECTS OF THE ASSESSEE BEING CHARITABLE AND GENUINENESS OF THE AC TIVITIES OF THE ASSESSEE. AS REGARDS THE DECISIONS RELIED UPON BY THE LD. A/R OF THE ASS ESSEE, THERE IS NO DISPUTE THAT AT THE STAGE OF GRANTING THE REGISTRATION UNDER SECTION 12 AA THE LD. COMMISSIONER (E) IS NOT SUPPOSED TO EXAMINE THE CORRECTNESS OF THE CLAIM OF EXPENDITURE BUT THE REQUISITE 7 ITA NO. 1284-19 V IDHYASTHALI SHIKSHA SAMITI, JAIPUR. DETAILS OF THE EMPLOYEES OF THE ASSESSEE IS A RELEV ANT INFORMATION TO ARRIVE AT THE CONCLUSION THAT THE ACTIVITIES OF THE ASSESSEE ARE GENUINE. IF THE ASSESSEE IS NOT HAVING THE REQUISITE NUMBER OF TEACHERS AND OTHER STAFF RE QUIRED FOR RUNNING THE SCHOOLS AND COLLEGES, THEN IT CANNOT BE SAID THAT THE ACTIVITIE S OF THE ASSESSEE ARE GENUINE. THEREFORE, THOSE DECISIONS CANNOT RESTRICT THE SCOP E OF EXAMINATION ON THE POINT OF GENUINENESS OF THE ACTIVITIES. THOUGH THE ASSESSEE HAS FAILED TO PRODUCE THE REQUISITE DETAILS AS WELL AS THE ORIGINAL DOCUMENTS FOR VERIF ICATION OF THE LD. COMMISSIONER (E), HOWEVER, IN THE INTEREST OF JUSTICE, WE GRANT ONE M ORE OPPORTUNITY TO PRODUCE THE REQUISITE INFORMATION/DETAILS AS WELL AS THE ORIGIN AL DOCUMENTS BEFORE THE LD. COMMISSIONER (E) FOR EXAMINATION AND VERIFICATION. ACCORDINGLY, THE IMPUGNED ORDER OF THE LD. COMMISSIONER (E) IS SET ASIDE AND THE MATTE R IS REMANDED TO THE RECORD OF THE LD. COMMISSIONER (E) FOR PASSING A FRESH ORDER AFTE R VERIFICATION AND CONSIDERATION OF THE REQUISITE INFORMATION/DETAILS AS WELL AS THE ORIGIN AL DOCUMENTS TO BE PRODUCED BY THE ASSESSEE. NEEDLESS TO SAY THAT THE ASSESSEE BE GIV EN A PROPER OPPORTUNITY OF BEING HEARD BEFORE PASSING THE ORDER AFRESH. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER IS PRONOUNCED IN THE OPEN COURT ON 05/08/202 0. SD/- SD/- ( FOE FLAG ;KNO ) ( FOT; IKY JKWO (VIKRAM SINGH YADAV ) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 05/08/2020. DAS/ 8 ITA NO. 1284-19 V IDHYASTHALI SHIKSHA SAMITI, JAIPUR. VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- VIDHYASTHALI SHIKSHA SAMITI, JAI PUR. 2. THE RESPONDENT THE LD. CIT (EXEMPTIONS), JAIPU R. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 1284/JP/2019) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR