Bhakta Bandhav Society, Ambala Cantt. V. CIT(E), Chandigarh

ITA 1398/CHANDI/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5002 (ITAT-CHANDIGARH)
• Duration Of Justice: 8 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 16-05-2018
• Assessment Year: misc
• Appeal Filed On: 22-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GULSHAN RAJCIT
• Assessee Lawyers: ANSHUL GOYAL; KEWAL KRISHAN GOYAL
• Keywords: Charitable institution; Source of fund
• Section: 12A; 12AA; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH A, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO.1398/CHD/2017 (UNDER SECTION 12AA OF THE ACT) BHAKTA BANDHAV SOCIETY, VS. THE CIT(EXEMPTIONS), 17, PREET NAGAR, AMBALA CANTT. CHANDIGARH. PAN: AAABB0911F (APPELLANT) (RESPONDENT) APPELLANT BY : S/SHRI KEWAL KRISHAN GOYAL, & ANSHUL GOYAL, CA RESPONDENT BY : SHRI GULSHAN RAJ,CIT DR DATE OF HEARING : 16.05.2018 DATE OF PRONOUNCEMENT : 28.05.2018 ORDER PER ANNAPURNA GUPTA, AM : THE PRESENT APPEAL HAS BEEN PREFERRED AGAINST THE O RDER PASSED BY CIT (EXEMPTIONS) CHANDIGARH DATED 29.08.2 017, U/S 12AA OF THE INCOME TAX ACT 1961 (IN SHORT THE ACT) REFUSING TO GRANT REGISTRATION AS A CHARITABLE TRUS T U/S 12AA OF ACT. 2. BRIEFLY STATED THE APPELLANT HAS FILED AN APPLIC ATION IN FORM NO- 10A SEEKING REGISTRATION U/S 12A OF THE AC T. THE LD. CIT (E) NOTED THAT THE APPELLANT SOCIETY WAS AN ONGOING ENTITY, IN OPERATION SINCE 20.02. 2013 AND ITS STAT ED AIM AND OBJECTS WERE TO PROVIDE LORDSHIP AT BHAKTA BHANDAV SOCIETY WITH A REGULAR SOURCE OF FUND FOR DUE PERFORMANCE O F DAILY SEWA PUJA AND OTHER ACTS OF DEVOTIONS, CEREMONIES AND FESTIVALS AS ARE CONNECTED WITH WORSHIP OF SAID DEI TIES IN ACCORDANCE WITH THE MANDATES OF GAUDIYA VAISHANAVA 2 ACHARYAS; TO PROVIDE FOR RENOVATION, MAINTENANCE AN D KEEPING IN GOOD REPAIRS THE SAID BHAKTA BANDHAV SOC IETY; TO UPLIFT HUMAN SOCIETY BY ADVANCING, TRANSMITTING AND SPREADING THE ETHICAL MORAL AND PHILOSOPHICAL PRINC IPLES OF KRISHNA CONSCIOUSNESS AS REVALUATED IN THE TEACHING OF BHAGVAD GITA; TO PROVIDE RELIEF FOR POOR, EDUCATION , MEDICAL RELIEF, PROMOTION OF VEGETARIANISM, DISTRIBUTION OF PRASAD AND DISTRIBUTION OF FOOD TO GENERAL PUBLIC ESPECIAL LY TO POOR AND NEEDY PEOPLE. 3. DURING THE COURSE OF PROCEEDINGS BEFORE THE LD . CIT (E), THE APPELLANT SOCIETY WAS ASKED TO FILE CERTA IN DOCUMENTS/CLARIFICATION SO AS TO ENABLE THE CIT (E) TO EXAMINE WHETHER THE APPELLANT SOCIETY FULFILLED TH E TWO BASIC CONDITIONS FOR GRANT OF REGISTRATION U/S 12A I.E. GENUINENESS OF ITS OBJECTS AND GENUINENESS OF ACTIV ITIES CARRIED OUT BY IT. THE LD. CIT (E), ON PERUSAL OF T HE REPLY FILED BY THE APPELLANT SOCIETY AND THE RECORDS RELA TED TO IT, FOUND THAT EARLIER ON TWO OCCASIONS ALSO THE APPELL ANT SOCIETIES APPLICATION FOR GRANT OF REGISTRATION U/S 12A OF THE ACT, HAD BEEN REJECTED ON THE GROUND THAT IT HAD PR OVIDED UNAUDITED BALANCE SHEET AND FURTHER THAT ON PERUSAL OF THE SAME IT REVEALED THAT IT WAS ENGAGED SOLELY IN RELI GIOUS ACTIVITIES OF PRIVATE NATURE, WHICH DID NOT BENEFIT THE GENERAL PUBLIC. LD.CIT(E) ALSO FOUND THE EARLIER APPLICATIO NS TO HAVE BEEN REJECTED FOR THE REASON THAT THE APPLICANT SO CIETY WAS NOT INDULGING IN ANY ACTIVITY RELATING TO RELIEF OF POOR AND MEDICAL AID BUT WAS ONLY INDULGING IN CONDUCTING 3 BHANDARAS, WHICH WAS AN ACTIVITY OF RELIGIOUS NATUR E. CONSIDERING THE SAME THE LEARNED CIT (E) HELD THAT, SINCE ON EARLIER TWO OCCASIONS THE APPELLANTS APPLICATION HA D BEEN REJECTED, THE NATURAL COURSE TO FOLLOW WAS FOR THE APPELLANT SOCIETY TO FILE AN APPEAL BEFORE ITAT RATHER THAN F ILING FRESH APPLICATION BEFORE IT AGAIN AND AGAIN. THE LD. CIT (E) HELD THAT THERE WAS NO PROVISION UNDER THE ACT TO FILE A FRESH APPLICATION WHERE THE CASE WAS REJECTED ON MERIT AN D THROUGH SPEAKING ORDER AND THAT THE SAME ONLY TANTAMOUNTED TO SUBVERTING DUE PROCESS OF LAW, WHIC H WAS NOT TENABLE. 4. FOR THE ABOVE REASON LD. CIT (E) REJECTED THE APPLICATION FILED BY THE APPELLANT. AGGRIEVED BY TH E SAME THE APPELLANT SOCIETY HAS NOW COME UP IN THE APPEAL BEF ORE US RAISING THE FOLLOWING GROUNDS:- 1. THAT THE LD. CIT (E) HAS WRONGLY DISMISSED THE APPLICATION FOR REGISTRATION U/S 12A OF THE INCOME TAX ACT,1961, WITHOUT GIVING APPROPRIATE OPPORTUNITY FOR BEING HEARD UNDER THE PROVISO TO SUB SECTION (1) OF SECTION 12AA. 2. THAT THE LD. CIT (E) HAS PASSED THE ORDER IN HASTE AND IS AGAINST THE FACTS, LAW AND PROVISIONS OF INCOME TAX ACT, 1961 AND RULES MADE THERE UNDER. 3. THAT THE LD. CIT (E) HAS ERRED IN CONCLUDING THE AIMS AND OBJECTS OF THE APPELLANT ARE OSTENSIBLE, NOT OF CHARITABLE NATURE AND THAT THE ACTIVITIES OF THE TRUST CANNOT BE PUT TO THE TEST OF GENUINENESS. 4. THAT THE LD. CIT (E) HAS WRONGLY IGNORED THE FACTS THAT THE APPELLANT TRUST EXISTS SOLELY FOR RELIGIOUS AND CHARITABLE PURPOSES AND NOT FOR THE PURPOSE OF PROFIT AS EVIDENT FROM ITS AIMS AND OBJECTS. 4 5. THAT THE LD. CIT (E) HAS ERRED IN REJECTED THE APPLICATION U/S 12 A DESPITE OF MENTION THAT THE APPELLANT IS ENGAGED IN RELIGIOUS ACTIVITIES. 6. THAT THE LD. CIT (E) HAS ERRED IN CONCLUDING THAT THE APPELLANT IS ENGAGED IN PRIVATE RELIGIOUS ACTIVITIES AND ACTIVITIES OF THE APPELLANT DOES NOT BENEFIT THE GENERAL PUBLIC. 7. THAT THE LD. CIT (E) HAS ERRED IN CONCLUDING THAT THE CASE WAS IMPIGNED BY PERCEPTIBLE ABSENCE OF ANY ACTIVITY RELATING TO THE OTHER AIMS OSTENSIBLY PROFESSED NAME RELIEF TO POOR AND MEDICAL AID. 8. THAT THE LD. CIT (E) HAS ERRED IN CONCLUDING THAT FILING FRESH APPLICATION U/S 12 A AGAIN AND AGAIN IS NOT TENABLE AND THAT THERE IS NO SUCH PROVISION IN THE INCOME TAX ACT, 1961 TO FILE A FRESH APPLICATION WHEN THE CASE IS REJECTED ON MERITS AND THROUGH SPEAKING ORDER, WHILE LD. CIT IN THE EARLIER ORDER NO. F.NO. CIT/PKL/12-AA/2013-14 DATED 21.03.204 HAD STATED THAT THE APPELLANT CAN AGAIN MAKE AN APPLICATION FOR THE REGISTRATION U/S 12 A. 9. THE APPELLANT TRUST CARVES TO ADD, MODIFY, DELETE AND WITHDRAW ANY FURTHER GROUND ON OR BEFORE THE DATE OF HEARING. 5. TAKING UP GROUND NO.1,THE LD. COUNSEL FOR APPELL ANT CONTENDED THAT THE LD.CIT(E) HAD REJECTED ITS APPL ICATION WITHOUT AFFORDING A PROPER OPPORTUNITY OF HEARING A ND IN THIS REGARD POINTED OUT FROM THE ORDER, THAT AFTER MEREL Y CALLING FOR BASIC INFORMATION FOR EXAMINING THE ACTIVITIES BEING CARRIED OUT BY THE APPELLANT, THE LD.CIT(E) REJECTE D THE APPLICATION FILED FOR THE REASON THAT SAME HAD BEEN REJECTED ON EARLIER TWO OCCASIONS ALSO. IT WAS CONTENDED THA T THERE WAS NO PROVISION UNDER THE ACT DEBARRING THE SOCIET Y FROM REAPPLYING FOR REGISTRATION, IF ONCE REJECTED. LD.C OUNSEL FOR THE APPELLANT FURTHER CONTENDED THAT THE APPELLANT SOCIETY QUALIFIED FOR REGISTRATION U/S 12A OF THE ACT SINCE IT WAS 5 INDULGING IN CARRYING OUT CHARITABLE ACTIVITY FOR T HE PUBLIC IN GENERAL AND EVEN ITS OBJECTS STATED SO AND THAT IT HAD SUFFICIENT EVIDENCE TO SUBSTANTIATE ITS ABOVE CLAIM IF GIVEN AN OPPURTUNITY. A VOLUMINOUS PAPER BOOK WAS ALSO FILED BEFORE US, ON THE DIRECTION OF THE BENCH, CONTAINING EVID ENCES TO PROVE ITS CLAIM. LD.DR ON THE OTHER HAND RELIED ON THE ORDER OF THE CIT(E). 6. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE ORDER OF LD.CIT (E). WE FIND THAT THE LD.CIT(E) DI D NOT AFFORD PROPER OPPORTUNITY OF HEARING TO THE APPELLANT, MER ELY CALLING FOR BASIC INFORMATION FOR EXAMINING THE ACT IVITIES BEING CARRIED OUT BY THE APPELLANT, AND THEREAFTER, WITHOUT GIVING ANY FURTHER OPPORTUNITY, REJECTING THE APPLI CATION FILED FOR THE REASON THAT SAME HAD BEEN REJECTED ON EARLI ER TWO OCCASIONS ALSO. WE ARE UNABLE TO CONCUR WITH THIS R EASONING OF THE LD.CIT(E). MERELY BECAUSE APPLICATION HAD BE EN REJECTED EARLIER ALSO, DOES NOT DEBAR THE APPELLANT FROM FILING FRESH APPLICATION SEEKING REGISTRATION. NO SUCH PRO VISION OF LAW HAS BEEN BROUGHT TO OUR NOTICE. IN FACT, THE LD . CIT(E) SHOULD HAVE POINTED OUT THE OBSERVATIONS MADE IN EA RLIER ORDERS, WHILE REJECTING THE APPLICATION, AND SHOUL D HAVE GIVEN AN OPPORTUNITY TO THE APPLICANT SOCIETY TO RE BUT THE SAME. MOREOVER, WE FIND THAT THE LD. COUNSEL OF THE APPELLANT HAS PLEADED THAT IF GIVEN AN OPPORTUNITY, IT WOULD BE ABLE TO DEMONSTRATE ITS ELIGIBILITY FOR GRANT OF REGISTRATION WITH PROPER EVIDENCES. 6 8. CONSIDERING THE ABOVE, WE DEEM IT FIT AND IN THE INTEREST OF JUSTICE TO RESTORE THE ISSUE BACK TO TH E CIT(E) TO RECONSIDER THE APPLICATION OF THE APPELLANT SOCIETY AFTER GIVING DUE OPPORTUNITY OF HEARING . THE APPELLANT S OCIETY IS DIRECTED TO APPEAR BEFORE THE CIT(E) ON 12.06.2018 AND IS ALSO DIRECTED TO FILE ALL EVIDENCES AND PLEADINGS B EFORE THE CIT(E) IT WISHES TO RELY UPON TO REBUT THE ADVERSE FINDINGS IN THE EARLIER ORDERS PASSED REJECTING THE APPELLAN TS APPLICATION, WITHOUT WAITING FOR THE CIT(E) TO ASK FOR THE SAME, SO AS TO EXPEDITE THE PROCEEDINGS FOR GRANT O F REGISTRATION. FURTHER ,IN THE EVENTUALITY THAT THE APPELLANT FAILS TO COMPLY WITH THE AFORESAID DIRECTIONS, THE CIT(E) MAY DECIDE THE ISSUE AS HE DEEMS FIT IN ACCORDANCE WITH LAW. THE AFORESAID DIRECTIONS WERE GIVEN IN OPEN COURT IN TH E PRESENCE OF BOTH THE PARTIES. 9. IN VIEW OF ABOVE THE APPEAL IS ALLOWED FOR STAT ISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/-[ (SANJAY GARG) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 28 TH MAY, 2018 *RATI* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH