Bilimora Dhivar Pynch Samst, Navsari V. CIT(Exemption), Ahmedabad, Ahmedabad

ITA 137/SRT/2024

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 2805 (ITAT-SURAT)
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-04-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 18-04-2024
• Assessment Year: misc
• Appeal Filed On: 07-02-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVIKANT GUPTA
• Assessee Lawyers: ESMAYEEL O. SAHERWALA
• Keywords: Charitable institution
• Section: 12; 12A

Judgement Text

आयकर अपीलीय अिधकरण, सुरत Ɋायपीठ, सुरत IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI BIJAYANDA PRUSETH, ACCOUNTANT MEMBER आ.अ.सं./ITA No.137/SRT/2024 (A.Y.2024-25) (Hearing in Physical Court) Bilimora Dhivar Pynch Samst Badal Faliya, Machhiwad, Bilimora, Navsari-396321 [PAN : AABTB 6190 M] Vs Commissioner of Income Tax (Exemption), Ahmedabad Room No.609, Floor 6, Aayakar Bhawan (Vejalpur), Sachin Tower, 100 Foot Road, Anandnagar- Prahladnagar Road, Ahmedabad-380015 अपीलाथŎ/Appellant ŮȑथŎ /Respondent आ..अ.सं./ITA No. No.159/SRT/2024 (AY 2024-25) Shari Surat Samast Sorathiya Rohindasvanshi Gnati Panch Surat, 26, Amarkunja Society, Chhapra Bhata Road, Amroli, Kosad, Surat-394107 [PAN No. ABBTS 8086 N] Vs Commissioner of Income Tax (Exemption), Ahmedabad Room No.609, Floor 6, Aaykar Bhawan (Vejalpur), Sachin Tower, 100 Foot Road, Anandnagar- Prahladnagar Road, Ahmedabad-380015 अपीलाथŎ/Appellant ŮȑथŎ /Respondent आ..अ.सं./ITA No. No.202/SRT/2024 (AY 2024-25) Shree Dakshin Gujarat Vir Gurjar Seva Samaj Trust Bardoli A-7, Kamla Park, Gandhi Road, AT & Post Bardoli-394601 [PAN No. AAUTS 4951 J] Vs Commissioner of Income Tax (Exemption), Ahmedabad Room No.609, Floor 6, Aaykar Bhawan (Vejalpur), Sachin Tower, 100 Foot Road, Anandnagar- Prahladnagar Road, Ahmedabad-380015 अपीलाथŎ/Appellant ŮȑथŎ /Respondent आ..अ.सं./ITA No. No.229/SRT/2024 Khidmat Charitable Trust Plot No.37-38, Gali No.1, Shahpura Gali No.1, Opp. Kuba Masjid, Limbayat-394210 [PAN No. AAETK 1173 E] Vs Commissioner of Income Tax (Exemption), Ahmedabad, Room No.609, Floor-6, Aaykar Bhavan (Vejalpur), Nr. Sachin Tower, 100 Foot Road, Anandnagar-Prahladnagar Road, Ahmedabad-380015 ITA Nos.137, 159, 202 & 229/SRT/2024 2 अपीलाथŎ/Appellant ŮȑथŎ /Respondent िनधाŊįरती की ओर से /Assessee by Shri Esmayeel O. Saherwala, CA राजˢ की ओर से /Revenue by Shri Ravi Kant Gupta, CIT-DR अपील पंजीकरण/Appeals instituted on 08.02, 14.02, 22.02 & 28.02.2024 सुनवाई की तारीख/Date of hearing 19.04.2024 उद्घोषणा की तारीख/Date of pronouncement 25.04.2024 Order under section 254(1) of Income Tax Act PAWAN SINGH JUDICIAL MEMBER: 1. This bunch of four appeals by different assessees are directed against the separate orders of Ld. Commissioner of Income Tax-[Exemptions], Ahmedabad [for short to as ‘Ld.CIT(E’] dated 22.09.2023 and 23.09.2023 in rejecting the applications for registration of trusts under section 12AB of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). In all the appeals, the Ld.CIT(E) rejected the respective applications on similar grounds. The assessee-trust failed to response to show cause notice dated 15.09.2023 or 19.09.2023 in substantiating the objects and activities of the assessee-trusts. Therefore, with the consent of both the parties all appeals were clubbed, heard together and are decided by consolidated order to avoid conflicting decisions. For appreciation of facts, facts in ITA No.137/SRT/2024 in the case of” Bilimora Dhivar Pynch Samst” is treated as “lead” case. The assessee in its appeal has raised the following grounds of appeal:- “(1) On the facts and in the circumstances of the case and in law, the Ld.CIT(E), Ahmedabad has erred in concluding that all the charitable objects of the trust are for a particular was religious community or caste. ITA Nos.137, 159, 202 & 229/SRT/2024 3 (2) On the facts and in the circumstances of the case and in law, the Ld. CIT(E), Ahmedabad is not justified in presuming that as the nature of charitable is restricted to a particular religious community or caste, therefore the applicant would not be eligible for exemption u/s 11 of the Act. (3) On the facts and in the circumstances of the case and in law, the Ld.CIT(E), Ahmedabad has erred in interpreting and applying provisions of Section 13(1)(b) of the Act for concluding inapplicability of provisions of Sec.11 and 12 of the Act. The Ld.CIT(E), Ahmedabad has further erred by not correctly interpreting the case laws r.w.s.13(1)(b) for concluding ineligibility of exemption us 11 of the Act. (4) The appellant reserves the right to add, amend, replace or delete any grounds of appeal before conclusion of the appeal. (5) The appellant prays to quash the order of Ld.CIT(E), Ahmedabad and allow the eligibility for registration u/s 12A of the Act.” 2. Perusal of record shows that impugned order was passed by ld CIT(E) on 22.09.2023 and the present appeal is filed on 08.02.2024. We find that Registry / Tribunal has not issued any defect notice about delaying in file of assessee’s appeal before Tribunal, however, we find that Ld. Authorized Representative (Ld.AR) for the assessee in all fairness filed affidavit of Ashok Bhai Manshukhlal Kevat, one the trustee of assessee-trust explaining the cause of delay. In the affidavit the assessee trust has pleaded that they were not aware about the rejection of their application till 25 th January 2024. The assessee trust came to know about the order of rejection of their application under section 12AB when their office bearer checked the ITBA Portal and came to know about the rejection of the application. The ld AR for the assessee submits that copy of order of ld CIT(E) was not sent or served on the assessee. there is not intentional or deliberate delay in filing the appeal before Tribunal. The ld AR for the assessee prayed that for avoidance of technical objection, the delay may be condoned. On the other hand the ld Commissioner of Income Tax- departmental representative (CIT-DR) for the ITA Nos.137, 159, 202 & 229/SRT/2024 4 revenue not opposed the plea of ld AR for the assessee for condoning such delay in filing appeal. Considering the contents of affidavit and the submissions of ld AR for the assessee that copy of rejection order or Ld.CIT(E) was not received by assessee immediately and that they came to know about the passing the impugned order only on 25.01.2024 when they checked the ITBA porta. We find that there is no intentional or deliberate delay in filing appeal before the Tribunal. Thus, for avoiding any technical issue, the delay, if any, is hereby condoned. Similar delay in all remaining three appeals are also allowed with similar directions. Now adverting to merits of the cases. 3. Rival submissions of both the parties heard and records perused. The Ld. AR for the assessee submits that assessee-trust is very old and was set-up in 1952. The Ld. AR for the assessee submits that in fact the assessee-trust was incorporated / set-up in the year 1952, however, the complete documents in the form of its constitution was not available. Thus, the assessee-trust was reconstituted again on 11.10.2020 and was registered with Charity Commissioner, Surat, State of Gujarat. Due to change in the statutory provisions about the registration under section 12AB of Income tax Act, the assessee-trust applied for provisional registration under section 12AB of the Act on 26.03.2022 and provisional registration was allowed to the assessee vide order dated 04.04.2022, which is valid upto assessment year 2024-25. The assessee applied for regular registration under section 12AB in Form- 10AB on 21.03.2023. At the time of filing application electronically, the assessee furnished all required details. The application of assessee-trust was rejected vide order dated 22.09.2023 on one of the ground that assessee- ITA Nos.137, 159, 202 & 229/SRT/2024 5 trust was issued such show cause dated 15.09.2023 and assessee failed to respond / furnished reply thereto. The Ld. AR for the assessee submits that assessee-trust engaged in charitable activities since long. The assessee-trust has already filed copy of application form for registration of Public Charitable Trust on 17.07.1952 before Deputy / Assistant Charity Commissioner, Vadodara. The Ld. AR for the assessee submits that notice dated 15.09.2023 was, in fact, not received by the assessee. The Ld. AR for the assessee submits that in absence of service of notice, the assessee could not furnish required details to prove the object and activities of the assessee-trust in consonance with the object. The Ld. AR for the assessee submits that assessee has a good case on merit and likely to succeeds if one more opportunity is given to the assessee-trust. The ld AR for the assessee submits that he undertakes on behalf of assessee to be more vigilant in future in making compliance to the notices of ld CIT(E). To support his submissions, the ld AR for the assesse also relied on the decision of Punjab & Haryana High Court in Manjal BCU Centre of Innovation and Entrepreneurship [2024] 160 taxmann.com 62 (P&H). 4. On the other hand, Ld.CIT-DR for the Revenue supported the order of Ld.CIT(E). The Ld.CIT-DR submits that assesse failed to file relevant and requisites details in response to show cause notice issued on 15.09.2023. The Ld.CIT(E) on the basis of details provided in the application, considered such details and rejected the application, for want of proper submission by taking view that assessee-trust create or establish for the benefit of particular community or caste. The Ld.CIT-DR submits that provisional registration ITA Nos.137, 159, 202 & 229/SRT/2024 6 allowed to assessee on 04.04.2022 and which was also cancelled. The Ld.CIT- DR for the Revenue submits that when the assessee has applied for registration as per Rules through ITBA portal, it was the duty of assessee- trust to check their e-mail and SMS alert about for issuance of show cause notice. The Ld.CIT-DR for the Revenue submits that in absence of requisites details, the Ld.CIT(E) was justified in rejecting the application under section 12AB of the Act on the issue of condonation of delay. The Ld.CIT-DR for the Revenue submits that the Bench may take proper view if find reasonable cause for not filing appeal within 60 days from passing the impugned order passed by Ld.CIT(E). 5. We have considered the submissions of both the parties and have gone through the order of ld. CIT(E) and our record carefully. On perusal of record and various evidence furnished on record, we find that initially the assessee- trust was set-up on 17.07.1952. The assessee re-constituted its constitution / Article and Memorandum of Association on 11.10.2020. The assessee is duly registered with Assistance Charity Commissioner, Surat and there is no dispute that assessee filed application for provisional registration in the form of 10A on 26.03.2022, which was allowed in favour of assessee upto assessment year 2024-25. However, the application for regular registration under section 10AB was rejected by Ld.CIT(E) on 22.09.2023 by taking view that assessee failed to respond to the show cause notice dated 15.09.2023. We find that while rejecting the application under section 12AB, the Ld. CIT(E) also cancelled / recalled provisional registration allowed on 04.04.2022. We find that while considering the application of assessee under section 12AB, ITA Nos.137, 159, 202 & 229/SRT/2024 7 Ld.CIT(E) issued show cause notice dated 15.09.2023 asking the assessee- trust to explain about the object and nature of activities appears to be restricted to the benefit of a particular religious community. The Ld.CIT(E) by recording the observation in response to show cause notice dated 15.09.2023, the assessee failed to respond such show cause notice. Before us Ld. AR for the assessee vehemently submitted that no such show cause notice, which was sent through ITBA e-portal. We find that Hon’ble Punjab & Haryana High Court in the case of Manjal BCU Centre of Innovation and Entrepreneurship (supra) held that any individual or a company (assessee) is not expected to keep e-portal of Department open all time so as to have knowledge of what Department is supposed to be doing with regard to submission of forms etc., and a pragmatic view has to be adopted instead of presumption placing notice only in e-portal. We find that substantial right of the assessee are involved in the present appeal as the assessee is in existence since long. The application of assessee was rejected for the want of response to show cause notice dated 15.09.2023. Considering the overall facts and circumstances of the present case, in our view, assessee deserves one more opportunity to contest its case on merit in allowing to file their reply in regard to show cause notice dated 15.09.2023 and the relevant evidence to prove their object and the activities. Thus, case of assessee is restored back to the file of Ld.CIT(E) with a direction to pass afresh order in accordance with law. Needless to order that before passing order, the ld. CIT(E) shall grant reasonable opportunity of hearing to the assessee. The assessee is also given liberty to file additional submission before ld. CIT(E). The assessee is also directed to be more ITA Nos.137, 159, 202 & 229/SRT/2024 8 vigilant in making compliance to the notices issued by the ld CIT(E). In the result, the grounds of appeal raised by the assessee are allowed for statistical purposes. 6. In the result, this appeal of assessee is allowed for statistical purposes. ITA Nos. 159/Srt/2024, ITA No.202/SRT/2024 & ITA No. 229/SRT/2024 7. As noted above, the facts in all three appeals are similar with ITA No. 137/SRT/2024, applications of all the appellant-trusts were rejected by ld CIT(E) on similar grounds. Considering the facts that on similar set of facts, we have restored the appeal of assessee in ITA No. 137/SRT/2024, therefore, all these three appeals are also restored back with similar directions. 8. In the result, ITA No.159/SRT/2024, 202/SRT/2024 & 229/SRT/2024 are allowed for statistical purpose. 9. In combined result, all the four appeals of assessee are allowed for statistical purposes. A copy of instant common order be placed in the respective case file(s). Order pronounced in the open court on 25/04/2024 Sd/- Sd/- (BIJAYANANDA PRUSETH) (PAWAN SINGH) [ACCOUNTANT MEMBR] [JUDICIAL MEMBER] Surat, Dated: 25/04/2024 Dkp. Out Sourcing Sr.P.S ITA Nos.137, 159, 202 & 229/SRT/2024 9 Copy to: 1. Appellant 2. Respondent/ CIT(E) 3. DR 4. Guard File True copy/ By order // True Copy // Sr. P.S. /Assistant Registrar, ITAT, Surat