M/s SRPP Little Hope Welfare Foundation, Ludhiana V. CIT (Exemptions), Chandigarh

ITA 151/CHANDI/2015

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1591 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 26-08-2015
• Assessment Year: 2015-2016
• Appeal Filed On: 10-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNIL VERMA
• Keywords: Opportunity of being heard; Set aside
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. RANO JAIN, ACCOUNTANT MEMBER ITA NO. 151/CHD/2015 ASSESSMENT YEAR: 2015-16 SRPP LITTLE HOPE VS THE CIT (EXEMPTIONS), WELFARE FOUNDATION, CHANDIGARH. # 37-A, FIRST FLOOR, 2 ND LANE, MODEL GRAM, LUDHIANA. PAN: AAUCS4970J (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PARIKSHIT AGGA RWAL RESPONDENT BY : SHRI SUNIL VERMA DATE OF HEARING : 26.08.2015 DATE OF PRONOUNCEMENT : 01.09.2015 O R D E R PER BHAVNESH SAINI,JM THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORD ER OF LD. CIT (EXEMPTIONS) CHANDIGARH DATED 26.12.2014 FOR REJECTING THE APPLICATION UNDER SECTION 12AA OF THE INCOME TAX ACT. 2. THE ASSESSEE FILED APPLICATION FOR GRANT OF REGISTRATION UNDER SECTION 12AA OF THE INCOME TAX A CT. THE ASSESSEE COMPANY WAS INCORPORATED ON 18.03.2014 . THE CIT NOTED THAT OBJECTS OF THE COMPANY ARE OF GE NERAL 2 IN NATURE AND DID NOT SPECIFY ANY CHARITABLE ACTIVI TY AS IS PRESCRIBED IN SECTION 2(15) OF THE INCOME TAX ACT. THE ASSESSEE COMPANY WAS FOUND TO BE CLOSELY HELD COMPA NY. DURING THE PERIOD 18.03.2014 TO 31.3.2014, ASSESSEE IS STATED TO HAVE SPENT RS. 17,450/- ON EDUCATIONAL BO OKS AND RS. 30,450/- ON SCHOOL UNIFORMS. IN ORDER TO JU STIFY THE CHARITY ON THESE ITEMS, ASSESSEE FILED TWO CERT IFICATE FROM A NEIGHBORING SOCIETY NAMELY NAV KIRAN CHARITA BLE EDUCATIONAL SOCIETY ( REGISTERED) LUDHIANA. THE CER TIFICATE REGARDING UNIFORM DISTRIBUTION IS DATED 30.04.2014 WHEREAS THE CERTIFICATE REGARDING DISTRIBUTION OF B OOKS IS DATED 15.05.2014. THE CIT NOTED THAT NONE OF THE CERTIFICATES PERTAIN TO THE PERIOD FOR WHICH BALANC E SHEET HAS BEEN FILED AS ON 31.03.2014. THEREFORE, THEIR AUTHENTICITY REMAINS DOUBTFUL. IT WAS, THEREFORE, NOTED THAT NO CHARITABLE ACTIVITY CAN BE SAID TO HAVE BEE N DONE. THE APPLICATION FOR REGISTRATION WAS ACCORDINGLY RE JECTED. 3. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PA RTIES AND PERUSED THE FINDINGS IN THE IMPUGNED ORDER. TH E CIT DID NOT DISCUSS THE OBJECTS OF THE ASSESSEE COMPANY IN THE IMPUGNED ORDER AND NO SPECIFIC FINDINGS HAVE BEEN G IVEN AS TO WHY THE OBJECTS OF THE ASSESSEE COMPANY WERE NOT CHARITABLE IN NATURE. MAY BE, IT IS A CLOSELY HELD COMPANY, WOULD NOT DEBAR THE ASSESSEE FROM DOING CHARITABLE ACTIVITIES. THE ASSESSEE HAS STATED TO HAVE SPENT AMOUNT ON EDUCATIONAL BOOKS AND PROVIDING SCH OOL UNIFORMS. THE CERTIFICATE FROM NAV KIRAN CHARITABL E 3 EDUCATIONAL SOCIETY WAS FILED WHICH PERTAIN TO 30.0 4.2014 AND 15.05.2014. THE ASSESSEE FILED BALANCE SHEET UP TO 31.03.2014, HOWEVER CIT NOTED THAT THESE CERTIFICAT ES DO NOT PERTAIN TO THE PERIOD ENDING MARCH, 2014. THE ASSESSEE HAS FILED TWO CERTIFICATES OF UNIFORM DIST RIBUTION AND DISTRIBUTION OF BOOKS PERTAINING TO APRIL, 2014 AND MAY, 2014 WHICH WOULD BE FALLING IN FINANCIAL YEAR 2014- 15 I.E. ENDING MARCH, 2015. THEREFORE, THERE IS NO QUESTION OF FILING BALANCE SHEET FOR MARCH 2015 BEC AUSE THE CIT PASSED THE ORDER ON 26.12.2014. THEREFORE, THERE WAS NO JUSTIFICATION TO HOLD THAT THE GENUINENESS O F THESE CERTIFICATES IS DOUBTFUL. THE CIT SHOULD HAVE CONS IDERED THE ISSUE IN THE LIGHT OF THE PROVISIONS OF SECTION 12AA OF THE ACT WHICH PROVIDES THAT AT THE TIME OF GRANT OF REGISTRATION, THE CIT SHOULD CONSIDER THE OBJECTS A ND GENUINENESS OF THE ACTIVITIES OF THE INSTITUTION SE EKING REGISTRATION IN THE MATTER. IT, THEREFORE, APPEARS THAT FINDINGS OF THE CIT ARE NOT SUFFICIENT TO REJECT TH E APPLICATION FOR REGISTRATION UNDER SECTION 12AA OF THE ACT. IN OUR VIEW, THE MATTER REQUIRES RE-CONSIDERATION B ECAUSE THE CIT SHALL HAVE TO GIVE SPECIFIC FINDING OF FACT ON THE BASIS OF MATERIAL ON RECORD WHILE CONSIDERING REGIS TRATION APPLICATION IN ACCORDANCE WITH LAW. 4. WE, THEREFORE, SET ASIDE THE IMPUGNED ORDER AND RESTORE THE MATTER IN ISSUE TO THE FILE OF CIT (EXE MPTIONS) CHANDIGARH WITH DIRECTION TO RE-DECIDE THE MATTER I N ISSUE IN ACCORDANCE WITH LAW, WHO SHALL GIVE SPECIFIC F INDING OF 4 FACT IN THE ORDER BY GIVING REASONABLE SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 1 ST SEPTEMBER,2015. SD/- SD/- ( RANO JAIN) (BHAVNESH SAINI ) ACCOUNTANT MEMBER JUDICIAL MEMB ER DATED: 1 ST SEPTEMBER,2015. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT CHANDIGARH