Shri Sant Ram Memorial Education and Welfare Society, Karnal V. CIT(E), Chandigarh

ITA 1484/CHANDI/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 8171 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 30-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G S PHANI KISHORE
• Keywords: Depreciation; Wrong claim; Non compliance; TDS; Set aside
• Section: 12A; 12AA; 12

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH B CHANDIGARH !, ' # $ , $ % & ' ( ) , *+ # BEFORE: SMT. DIVA SINGH, JM & SMT.ANNAPURNA GUPTA, AM ./ ITA NO. 1484/CHD/2018 [UNDER SECTION 12AA (1)(B) ] SHRI SANT RAM MEMORIAL EDUCATION & WELFARE SOCIETY, HOUSE NO. 250, SECTOR 6, URBAN ESTATE, KARNAL. VS THE CIT (EXEMPTIONS) , CR BUILDING, 5 TH FLOOR, SECTOR 17-E,CHANDIGARH. ./ PAN NO: AAITS8321E / APPELLANT / RESPONDENT / ASSESSEE BY : SHRI ROHIT KUMAR, PRESIDENT OF SOCIET Y ! / REVENUE BY : SHRI G.S.PHANI KISHORE, CIT-DR ' !# $/ DATE OF HEARING : 10.04.2019 %&'()* $/ D ATE OF PRONOUNCEMENT : 10.04.2019 *,/ ORDER PER DIVA SINGH THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE ASSA ILING THE CORRECTNESS OF THE ORDER U/S 12AA(1)(B)(II) OF THE INCOME TAX ACT, 1961DATED 28.09.2018 DISMISSING THE ASSESSEE'S APPLICATION FOR REGISTRATION U/S 12A PASSED BY THE CIT(EXEMPTIONS) CHANDIGARH. 2. HOWEVER, AT THE TIME OF HEARING, AN ADJOURNMENT APPLICA TION WAS MOVED ON BEHALF OF THE ASSESSEE THROUGH ITS PRESIDENT MR . ROHIT KUMAR, PRESENT IN THE COURT. A PERUSAL OF THE IMPUGNED ORDER S HOWS THAT IT HAS BEEN PASSED TAKING INTO CONSIDERATION THE FACT THAT THE RELEVANT DETAILS WERE NOT MADE AVAILABLE TO THE CIT (EXEMPTIONS) DESPITE OPPORTUNITY. MR. ROHIT KUMAR WAS REQUIRED TO ADDRESS AS TO WHY THE ASSESSEE DID NOT PARTICIPATE IN THE PROCEEDINGS FULLY AND FAIRLY AND HENCE W HY IN THE CIRCUMSTANCES, TIME SHOULD STILL BE GRANTED. THE PRESIDENT OF THE SOCIETY STATED THAT ALL NECESSARY DETAILS WERE MADE AVAILABLE TO T HE C.A. AND WHY THEY WERE NOT FORWARDED, HE SAID HE WAS NOT AWARE. CON SIDERING THE ARGUMENT, THE ADJOURNMENT APPLICATION MADE IN THE APPEAL WAS PASSED OVER IN ORDER TO GIVE TIME TO THE PRESIDENT OF THE SOCIE TY TO VERIFY THE CORRECT FACTS AND ADDRESS THEM. HIS SPECIFIC ATTENTION WAS INVITED TO ITA NO. 1484/CHD/2018 PAGE 2 OF 5 PARAS 5, 6 AND 7 OF THE IMPUGNED ORDER. THE LD. CIT-DR MR. P.KISHORE STATED THAT HE RELIES ON THE ORDER. 3. IN THE NEXT ROUND, MR. ROHIT KUMAR RE-ITERATED THAT ALL THE RELEVANT DETAILS HAVE BEEN MADE AVAILABLE TO THE C.A. BY THE SOCIETY , HOWEVER FOR WHAT REASONS THEY WERE NOT FURTHER HANDED, HE WAS UNA BLE TO STATE, HOWEVER, THE C.A. HAS BEEN CHANGED, IT WAS HIS SUBMISSION THAT THE ASSESSEE HAS ALL THE NECESSARY DETAILS AND ACCORDING TO HIS UNDERSTANDING, THEY WERE MADE AVAILABLE TO THE COUNSEL FO R FURTHER HANDING OVER AND IT WAS NOT A CASE OF NON COMPLIANCE ON THE PART OF THE ASSESSEE. 4. THE LD. CIT-DR REFERRING TO PARAS 5, 6 AND 7 SUBMITTED THAT IT WAS A CASE OF NON COMPLIANCE. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. A PERUSAL OF THE RECORD SHOWS THAT THE ASSESSEE BY WAY OF AN APPLICATION IN FORM NO. 10A E-FILED ON 20.03.2018 SOUGHT REGISTRATION U/S 12A OF THE ACT. THE CIT (E) TAKES NOT E OF THE FACT THAT THE APPLICANT ENTITY WAS CREATED ON 22.12 .2006. THE STATED AIMS & OBJECTS OF THE APPLICANT SOCIETY ARE TO ADVANCEMENT AND PROPAGATION OF EDUCATION AND LEARNING INCLUDING ESTABLISHMENT, MAINTENANCE AND SUPPO RT OF SCHOOL AND OTHER EDUCATIONAL INSTITUTIONS ETC. CONSIDERING THE STATUTORY REQUIREMENTS, HE DIRECTED THE ASSESSEE TO FILE THE FOLLOWING DETAILS ON 16.08.2018 : (I) A CERTIFIED LEGIBLE COPY OF BYE-LAWS/ MEMORANDUM OF ASSOCIATION OF SOCIETY/TRUST ALONGWITH SUPPLEMENTARY/ AMENDED DEED IN ENGLISH MA Y BE FURNISHED- (II) DETAILS OF NAMES AND ADDRESS OF SETTLER, TRUST EES AND MEMBERS OF THE SOCIETY/TRUST ALONG WITH THE PANS & EMAIL ADDRESS, RELATIONSHIP AMONGST THEM AND THEIR PROFESSION, BE FURNISHED. (III) PLEASE FURNISH THE COPIES OF THE AUDITED BALA NCE SHEETS, INCOME & EXPENDITURE ACCOUNT ALONG WITH COMPLETE ANNEXURE FOR THE LAST 0 3 YEARS OR SINCE THE BEGINNING OF THE TRUST. RECEIPTS AND PAYMENT ACCOUNTS FOR THE RE LEVANT YEARS MAY ALSO BE FURNISHED. PLEASE NOTE THAT THE FINANCIAL STATEMENT S RELATED TO INDIVIDUAL INSTITUTE AND ALSO THE CONSOLIDATED IN RESPECT OF SOCIETY/TRUST M AY BE SUBMITTED. (IV) A COMPREHENSIVE NOTES ON ACTIVITIES SPECIFYING THE SECTION 2(15) OF IT ACT UNDER WHICH THE OBJECTS OF THE TRUST GET COVERED AND QUAL IFY FOR BEING CONSIDERED CHARITABLE MAY BE FURNISHED. YOU ARE ALSO REQUESTED TO FURNISH THE DETAILS HOW THE ACTIVITIES PROJECTED BY YOU ARE CHARITABLE IN NATURE. THE SPEC IFIC LIMB PURSUED U/S 2(15) MAY BE BROUGHT ON RECORD CLEARLY PARTICULARLY AFTER THE GR ANT OF 12AA REGISTRATION . (V) DETAILS OF VOLUNTARY CONTRIBUTIONS RECEIVED BY THE TRUST/SOCIETY AS ENVISAGED U/S 12 OF IT. ACT AND WHETHER ANY SPECIFIC DIRECTIO N HAD BEEN RECEIVED BY THE PERSONS MAKING VOLUNTARY CONTRIBUTIONS. (VI) PROVIDE THE DETAILS OF LAND & BUILDING PURCHAS ED DURING LAST THREE YEARS ALONGWITH THE COPIES OF REGISTRATION OF THE SAME IN THE NAME OF SOCIETY/TRUST. ITA NO. 1484/CHD/2018 PAGE 3 OF 5 (VII) PROOF OF THE OWNERSHIP OF LAND/BUILDING /FIXE D ASSETS IN CASE THE SAME WAS OWNED BY THE SOCIETY/TRUST. (VIII) DETAILS OF DONATIONS RECEIVED ALONGWITH DOCU MENTARY EVIDENCE DURING THE LAST THREE YEARS IF APPLICABLE. HOW MUCH OF THE DON ATIONS HAVE BEEN ROUTED THROUGH THE BANKING CHANNELS. (IX) COPIES OF IT. RETURNS ALONGWITH COMPUTATION OF INCOME (IF ANY), MAY BE FILED FOR THE LAST 03 YEARS. (X) PROVIDE THE COPY OF RECEIPTS AND PAYMENT ACCOUN TS OF THE ENTITY FOR THE LAST THREE YEARS IN CASE CLAIMS IN THE PAST HAVE BEEN MA DE U/S 10(23C)(IIIAD). THE SAME MUST BE CORROBORATED THROUGH BANK ENTRIES. (XI) COPY OF AFFILIATION LETTER DULY CERTIFIED BY T HE MEMBER/TRUSTEE OF THE SOCIETY/TRUST IN CASE OF RUNNING OF EDUCATIONAL INS TITUTE ALONG WITH THE NAME AND ADDRESS OF THE INSTITUTES. (XII) COPIES OF THE STATEMENTS OF ALL BANK ACCOUNTS MAINTAINED BY THE TRUST OR BY TRUSTEE/MEMBERS FOR THE LAST 03 YEARS OR SINCE THE INCEPTION OF THE SOCIETY/TRUST. (XIII) COPIES OF ALL THE BANK STATEMENT FROM 08.11. 2016 TO 31.12.2016 HIGHLIGHTING THE CASH DEPOSITS ALONGWITH THE SOURCE AND DOCUMENT ARY EVIDENCE. (XIV) AFFIDAVIT GIVING THE DETAILS OF ALL THE BANK ACCOUNTS MAINTAINED BY THE SOCIETY BE FURNISHED AND NO SOCIETY IS NOT MAINTAINING ANY OTHER BANK ACCOUNT EXCEPT THOSE DISCLOSED BEFORE DEPARTMENT. (XV) WHETHER ANY REGISTRATION UNDER PCRA HAD BEEN GRANTED TO TRUST. (XVI) WHETHER THE APPLICATIONS FOR REGISTRATION HAS BEEN FILED FOR THE FIRST TIME. THE FATE OF THE EARLIER APPLICATION IF ANY ALONG WITH C OPY OF THE ORDER. (XVII) DETAILS WHETHER ANY SEARCH OR SEIZURE OR SUR VEY U/S 133-A HAD BEEN EARNED OUT IN YOUR CASE. (XVIII) PROVIDE DOCUMENTARY EVIDENCE AS REGARDS DON ATIONS RECEIVED ALONGWITH CORROBORATION OF THE SAME WITH THE BANK ACCOUNT. (XIX) PROVIDE THE TOTAL OF CREDITS OF THE SOCIETY /TRUST IN DIFFERENT BANKS. (XX) DETAILS OF NUMBER OF INSTITUTES WITH COMPLETE ADDRESS, INSTITUTE-WISE NUMBER OF STUDENTS AND CLASS-WISE/COURSE-WISE FEE STRUCTUR E, COURSE OFFERED ALONGWITH THE COMPLETE DETAILS OF THE STAFF EMPLOYED TO WHOM SALARY IS BEING PAID, BE PROVIDED. THE DETAILS OF FEE SHOULD BE PROVIDED MON TH-WISE. (XXI) PLEASE FURNISH THE DETAILS OF TAX DEDUCTED AT SOURCE AND COPY OF TDS RETURN FOR THE LAST TWO YEARS.. (XXII) PLEASE PROVIDE STATUS OF EXEMPTION CLAIMED W HILE FILING INCOME TAX RETURNS IN THE PREVIOUS YEARS ALONG WITH THE DOCUMENTARY EVIDE NCE. (XXIII) PLEASE EXPLAIN THE STATUS OF EXEMPTION CLAI MED WHILE FILING THE ITRS IN THE PREVIOUS YEAR. DOCUMENTARY EVIDENCE IN THIS RESPEC T MAY BE FURNISHED. (XXIV) THE DOCUMENTARY EVIDENCE WITH REGARD TO THE CHARITABLE ACTIVITIES CLAIMED TO HAVE BEEN CARRIED OUT, MAY BE FURNISHED. (I) COMPLETE NAMES & ADDRESSES OF THE PERSONS/PARTI ES FROM WHOM THE UNSECURED LOANS HAVE BEEN SHOWN IN THE BALANCE SHEE T(S) ALONGWITH DETAILS OF YEAR-WISE PAYMENTS RECEIVED HIGHLIGHTING THE TRANSACTION IN THE BANK STATEMENT AND INTEREST PAID THEREON BE PRO VIDED. CONFIRMATIONS FROM THE PARTIES AND THEIR ITRS WITH ASSESSING OFFICER DETAILS MAY ALSO BE FURNISHED. PLEASE IGNORE AND WR ITE N.A. (IF NOT APPLICABLE IN YOUR CASE). (II) THE SALARY PAID MAY BE CORROBORATED WITH THE BANK AND THE WHETHER THESE AS PER THE NORMS OF THE STATE/CENTRE GOVERNME NT WITH THE INSTITUTES ARE AFFILIATED. ITA NO. 1484/CHD/2018 PAGE 4 OF 5 6. A PERUSAL OF THE RECORD SHOWS THAT APPARENTLY SOME DETAILS WERE GIVEN, HOWEVER FOR MAKING A FULL COMPLIANCE, THE CIT(E) DIRECTED THE ASSESSEE TO MAKE THE RELEVANT DETAILS AVAILABLE BY 04.09.20 18 AND THEN 23.09.2018 AND SINCE TILL THE DATE OF PASSING OF THE ORDER I.E . 28.09.2018, NOTHING WAS MADE AVAILABLE. REGISTRATION WAS DENIED. RELEVA NT EXTRACT OF THE ORDER IS REPRODUCED HEREUNDER FOR THE SAKE OF COMPLETENESS : 5. ON THE FIXED DATE, CA SH. S. HARJINDER SINGH APPEARED AND FILED WRITTEN SUBMISSIONS AND PROVIDED ITS E-MAIL TO FACILITATE FURTHER CORRE SPONDENCE. THE APPLICANT WAS FURTHER ASKED TO FURNISH FINANCIAL STATEMENT OF F.Y. 2017-1 8 ON OR BEFORE 04.09.2018. ON/THE SAID DATE NEITHER ANYBODY APPEARED NOR ANY ADJOURNMENT R ECEIVED. IN THAT CONTEXT, A QUESTIONNAIRE WAS SENT TO APPLICANT ON 15.09.2018 T HROUGH E-MAIL AT [e-mail] TO FURNISH THE FURTHER CLARIF ICATIONS/DETAILS BY 23.09.2018. THE CONTENTS OF THE SAME ARE REPRODUCED AS UNDER - (I) A PERUSAL OF THE BANK STATEMENTS FURNISHED BY YOU R EVEAL THAT DURING DIE DEMONETIZATION PERIOD YOU HAVE DEPOSITED A SUM OF R S. 72.85 LAKHS IN THE BANK ACCOUNTS MAINTAINED BY YOU. THE SOURCES OF SUCH CAS H DEPOSITS DULY SUPPORTED BY DOCUMENTARY EVIDENCE MAY BE EXPLAINED. (II) PROVIDE THE CONSOLIDATED RECEIPTS & PAYME NTS ACCOUNTS FOR LAST THREE YEARS. (III) PROVIDE THE COPIES OF AFFILIATION CERTIFI CATES OF ALL SCHOOLS. (IV) PROVIDE THE YEAR-WISE DETAILS OF CORPUS FROM THE DATE OF INCEPTION ALONGWITH THE DOCUMENTARY EVIDENCE WHEREBY SPECIFIC DIRECTIONS GI VING THE PURPOSE HAVE BEEN ISSUED AND ALSO PROVIDE THE ASSESSMENT DETAILS OF T HE PERSONS CONTRIBUTING CORPUS. (V) HOW COULD YOU CLAIM EXEMPTION U/S 10(23C)(III AD) IN F.Y. 2015-16 AND 2016-17 AS THE GROSS RECEIPTS EXCEEDED RS. 1 CRORE IN THESE YEARS? PLEASE EXPLAIN. (VI) PROVIDE THE SALE/PURCHASE OF BOOKS STOCK IN F .Y. 2016-17. ALSO IT MAY BE CLARIFIED THAT HOW THE SALE PURCHASE OF BOOKS COMES IN DIE AM BIT OF CHARITY AND IS COVERED BY SECTION 2(15) OF THE INCOME TAX ACT, 1961 ? (VII) HOW COULD YOU CLAIM DEPRECIATION AFTER AMEND MENT IN SECTION 11(6) OF THE ACT W.E.F. 01.04.2015? PLEASE EXPLAIN THE WRONG CLAIM O F DEPRECIATION TO THE TUNE OF RS. 24 LAKHS(APPROX.). 6. ON THE FIXED DATE, NEITHER DID ANY ONE ATTEND THIS OFFICE NOR ANY RESPONSE WAS RECEIVED IN THIS OFFICE DESPITE RECEIVING E-MAIL. T HIS CLEARLY SHOWS THAT THE APPLICANT HAS NO RESPONSE TO THE DEPARTMENT'S QUERIES. MOREOVER, NO ATTEMPT WAS MADE BY THE APPLICANT SOCIETY TO PUT FORTH ITS VIEWS EVEN TILL THE DATE OF PASSING OF THE ORDER. NEITHER WAS ANY EFFORT MADE BY THE APPLICANT TO ASCERTAIN T HE FATE OF ITS APPLICATION. GIVEN THE NON-COMPLIANCE ON THE VARIOUS OCCASIONS AFFORDED TO THE APPLICANT IT BECOMES EVIDENT THAT THE APPLICANT APPEARS NOT INTERESTED IN PURSUI NG THE MATTER. IN THE ABSENCE OF REQUISITE SUBMISSIONS , IT IS DIFFICULT TO VERIFY BOTH THE OBJECTS & GENUINENESS OF ACTIVITIES OF THE SOCIETY. 7. KEEPING INTO VIEW THE UNRESPONSIVE ATTITUDE OF THE APPLICANT EVEN TILL THE DATE OF PASSING OF THE ORDER, IT IS SAFE TO CONCLUDE THAT T HE APPLICANT HAS FAILED TO DISCHARGE ITS ONUS, THIS BEING A BENEFICIAL CLAUSE FOR THE ASSESS EES TO PROVE THAT ITS INCOME IS FREE FROM EXIGIBILITY OF TAXES. IN LIGHT OF THE ABOVE, I HAVE NO OPTION BUT TO DENY THE REGISTRATION TO THE APPLICANT U/S 12AA OF INCOME TAX ACT, 1961. 7. IN THE LIGHT OF THE SUBMISSIONS OF THE PRESIDENT OF THE SOCIETY, MR. ROHIT KUMAR; CONSIDERING THE RECORD AND IN THE INTERESTS OF SUBSTANTIAL JUSTICE TAKING FURTHER NOTE OF THE FACT THAT THERE WAS N O DEPARTMENTAL OBJECTION TO THE ALLOWING OF ASSESSEE'S PRAYER, WE DEEM IT APPROPRIATE TO SET ASIDE THE IMPUGNED ORDER AND RESTORE THE ISSUE BAC K TO THE FILE OF THE ITA NO. 1484/CHD/2018 PAGE 5 OF 5 LD. CIT (EXEMPTIONS) WITH THE DIRECTION TO THE ASSESSEE TO ENSURE THAT FULL AND PROPER COMPLIANCE IS MADE BEFORE THE SAID AUTHORITY. WHILE SO DIRECTING, WE HAVE TAKEN NOTE, AS NOTED EARLIER, OF THE ORA L PRAYER OF THE PRESIDENT OF THE SOCIETY THAT THE COUNSEL REPRESENTING T HE SOCIETY HAS BEEN CHANGED AND THIS TIME, THERE SHALL BE FULL AND PROPER COMPLIANCE. THE SAID PRAYER FOR REMAND ALSO AS NOTED WAS NOT OPPO SED BY THE LD. CIT- DR CONSIDERING THE ORAL UNDERTAKING GIVEN BY THE PRESIDEN T OF THE SOCIETY WHO WITHDREW HIS REQUEST FOR TIME. ACCORDINGLY, THE APPLICAT ION SEEKING TIME MOVED ON BEHALF OF THE PRESIDENT STANDS REJECTED AS WITHDRAWN. THE IMPUGNED ORDER IS SET ASIDE BACK TO THE FILE OF THE CIT (EX EMPTIONS) WITH THE DIRECTION TO PASS A SPEAKING ORDER IN ACCORDANCE WIT H LAW AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HERD. NE EDLESS TO SAY THAT IN THE EVENTUALITY OF ABUSE OF THE TRUST REPOSED, THE LD. CIT (E), CHANDIGARH WOULD BE FREE TO PASS AN ORDER ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. THE ASSESSEE IN ITS OWN INTERESTS IS DIRECTED TO MAKE FULL AND PROPER COMPLIANCES BEFORE THE SAID AUTHORITY. SAID ORDER WAS PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ITSELF. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STA TISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 10.04.2019. SD/- SD/- ( % & ' ( ) ) ( ! ) (ANNAPURNA GUPTA) (DIVA SINGH) *+ #/ ACCOUNTANT MEMBER ' #/ JUDICIAL MEMBER & % &+ ,- .-) / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ' / / CIT 4. ' / ( )/ THE CIT(A) 5. -!01 2 , $ 2* , 34516 / DR, ITAT,CHANDIGARH 6. 15 7# / GUARD FILE &+ ' / BY ORDER, 8 / ASSISTANT REGISTRAR