Gyan Peeth Trust, Sonebhadra V. CIT (E), Lucknow

ITA 163/VNS/2019

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 4494 (ITAT-VARANASI)
• Duration Of Justice: 2 year(s) 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-04-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2019-2020
• Appeal Filed On: 16-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ARVIND SHUKLA
• Keywords: Charitable institution; Set aside
• Section: 12AA; 10(23C)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CIRCUIT BENCH, VARANASI BEFORE SHRI.VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ITA No. 163/Vns/2019 Assessment Year: N.A. GyanPeeth Trust, Ternahi, Robertsganj, Sonebhadra-222645, Uttar Pradesh v. The CIT(Exemption), T.C. 46-V , UP State Construction& Infrastructure Development Corporation, VibhutiKhand, Gomti Nagar, Lucknow-226010, Uttar Pradesh PAN:AABTG9961D (Appellant) (Respondent) Appellant by: Mr. Arvind Shukla, Advocate and Mr. Ashish Zafar, Advocate Respondent by: Mr.Ramendra Kumar Vishwakarma, CITDR Date of hearing: 25.03.2022 Date of pronouncement: 18 .04.2022 O R D E R PER SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER: This appeal, filed by assessee, being ITA No.163/Vns/2019, is directed against an order dated 31.08.2018 in File No.CIT(Exemption) /Lko/10(23C)/ 2018-19/58/160/2018-19/5831 passed by learned Commissioner of Income Tax (Exemption), Lucknow(hereinafter called "theCIT(E)") under Section 10(23C)(vi) of the Income-tax Act, 1961(hereinafter called “ the CIT(E)”) ITA No.163/Vns/2019 Assessment Year: N.A. GyanPeeth Trust, Sonebhadra, U.P. 2 rejecting /dismissing application filed by the assessee for grant of registration u/s 10(23C) of the 1961 Act.We have heard both the partiesin Open Court through physical hearing mode. 2. The brief facts of the case are that the assessee filed an application for registration u/s. 10(23C) of the Income Tax Act, 1961 ,on27.09.2017 with ld. CIT(E), Lucknow. The ld. CIT(E) was pleased to issue notices , dated 12.03.2018 and 28.06.2018, which remained unserved as the said notices returned back , which led ld. CIT(E) to decide application of the assessee for seeking registration u/s 10(23C) based on the material on record . The aforesaid application of the assessee for seeking registration u/s 10(23C) was dismissed by ld. CIT(E) , vide order dated 31.08.2018. In the considered view of ld. CIT(E) based upon material on record that the assessee was not able to produce sufficient material to corroborate charitable nature of its objects and genuineness of its activities. The ld. CIT(E) noted in its order that no books of accounts, vouchers etc. were produced by the assessee before ld. CIT(E) for verification to arrive at decision as to whether the assessee is entitled for registration u/s 10(23C) or not. The assessee is also not registered u/s 12AA of the 1961 Act. The ld. CIT(E) observed that the assessee is running an educational institution on commercial grounds solely for profit motive and there is no charitable activities carried on by the assessee. It was observed by ld. CIT(E) that the funds were not used by assesseefor charitable purposes and allegedly exaggerated and bogus expenses were claimed. Based on material on record, the ld. CIT(E) observed that the activities of the assessee were not genuine , and it was also observed that the part of income was applied for the benefit of persons specified in Section 13(1)(c) read with Section 13(3) of the 1961 Act. 3. Aggrieved, the assessee has filed an appeal with Income Tax Appellate Tribunal, Varanasi Circuit Bench, Varanasi, U.P..The ld. counsel for the assessee submitted ITA No.163/Vns/2019 Assessment Year: N.A. GyanPeeth Trust, Sonebhadra, U.P. 3 before the Bench that the assessee has submitted part replies before ld. ITO(E), but since the notices dated 12.03.2018 and 28.06.2018 issued by ld. CIT(E) were not served to the assessee, the compliance could not be made. The ld. counsel for the assessee has filed paper book containing 60 pages with tribunal(placed on record in file), to substantiate that part replies were filed by the assessee before ld. ITO(E). The ld. Counsel for the assesseestated before the Bench that one more opportunity be provided to the assessee and the assessee will submit all the relevant information, documents, books of accounts etc. as may be required by ld. CIT(E) for deciding its application for registration u/s 10(23C) of the 1961 Act. Prayers were made by ld. Counsel for the assessee that the matter may be restored back to the file of ld. CIT(E) for denovo consideration of the assessee application for registration u/s. 10(23C) of the 1961 Act. 4. The ld. CIT-DR also fairly submitted that keeping in view facts and circumstances of the case, the matter may be restored back to the file ofld. CIT(E) for de novo consideration of the application of the assessee for grant of registration u/s 10(23C) of the 1961 Act. 5. We have heard both the parties in Open Court hearing and perused the material on record. The brief facts of the case are that the assessee filed an application for registration u/s. 10(23C),on 27.09.2017 with ld. CIT(E), Lucknow. The ld. CIT(E) issued notices , dated 12.03.2018 and 28.06.2018 to the assessee, which remained unserved as the said notices returned back , which led ld. CIT(E) to dismiss ex-parte application of the assessee for seeking registration u/s 10(23C) based on the material on record . The ld. CIT(E) observed that the assessee was not able to produce sufficient material to corroborate charitable nature of its objects and genuineness of its activities. The ld. CIT(E) also observed that no books of accounts, vouchers etc. were produced by the assessee for verification to arrive at decision as to whether the ITA No.163/Vns/2019 Assessment Year: N.A. GyanPeeth Trust, Sonebhadra, U.P. 4 assessee is entitled for registration u/s 10(23C) or not. The assessee is also not registered u/s 12AA of the 1961 Act. The ld. CIT(E) observed that the assessee is running an educational institution on commercial grounds solely for profit motive and there is no charitable activities carried on by the assessee. It was observed by ld. CIT(E) that the funds were not used by assessee for charitable purposes and allegedly exaggerated and bogus expenses were claimed. Based on material on record, the ld. CIT(E) observed that the activities of the assessee were not genuine , and it was also observed that the part of income was applied for the benefit of persons specified in Section 13(1)(c) read with Section 13(3) of the 1961 Act. We have observed that the assessee applied for seeking registration u/s 10(23C) and participated in proceedings before ITO(E), but the two notices dated 12.03.2018 and 28.06.2018 which were issued by ld. CIT(E) were not served to the assessee as the said notices returned un- served. The ld. CIT(E) dismissed application for registration u/s 10(23C) filed by the assessee, ex-parte based on material on record. The assessee on its part has also to remain vigilant after filing its application for registration u/s 10(23C) of the 1961 Act. Both the rival parties have submitted before the Bench that keeping in view facts and circumstances of the case, the matter can be set aside and remanded back to the file of ld. CIT(E) for fresh consideration of the application of the assessee on merits for grant of registration u/s 10(23C) of the 1961 Act. Thus, under these circumstances it will be in the interest of justice and fairness to both the parties that the order dated 31.08.2018 passed by ld. CIT(E) be set aside and matter be restored back to the file of ld. CIT(E) for fresh consideration on merits of the assessee’s application for grant of registration u/s. 10(23C) of the 1961 Act. Thus, keeping in view the totality of the facts and circumstances of the case as enumerated above in the preceding para’s of this order and without commenting on the merits of the case, we are of the considered view that matter can be restored back to the file of ld. CIT(E) for de novo consideration of assessee’s application for registration u/s. 10(23C) of the Act. We ITA No.163/Vns/2019 Assessment Year: N.A. GyanPeeth Trust, Sonebhadra, U.P. 5 clarify that we have not commented on the merits of the issue and all the contentions are kept open.Needless to say that ld. CIT(E) will give proper and adequate opportunity of hearing to the assessee in set aside remand proceeding while deciding application of the assessee for grant of registration u/s 10(23C) of the 1961 Act, in accordance with the principle of natural justice and in accordance with law.The ld. CIT(E) is directed to pass reasoned and speaking order in the set aside remand proceeding while deciding application of the assessee afresh for grant of registration u/s 10(23C) of the 1961 Act. The assessee on its part is also directed to remain vigilant and attend the proceedings before ld. CIT(E) without fail as and when directed and submit all the details, information, documents, books of accounts, vouchers etc. or any other document/information called by ld. CIT(E) from time to time to decide application of the assessee for grant of registration u/s 10(23C) of the 1961 Act, otherwise ld. CIT(E) would be justified to pass speaking and reasoned order based on material on record and such enquiries as may be made by him , ex-parte in case the assessee did not co-operate with ld. CIT(E). The evidences /explanations submitted by the assessee shall be admitted by ld. CIT(E) in accordance with law , and thereafter be adjudicated on merits in accordance with law. The appeal of the assessee is allowed for statistical purposes. We order accordingly. 6. In the result, the appeal of the assessee in ITA no. 163/Vns/2019 for ay: NA is allowed for statistical purposes. Order pronounced on 18.04.2022 at Varanasi, U.P. Sd/- Sd/- [VIJAY PAL RAO] [RAMIT KOCHAR] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 18/04/2022 ITA No.163/Vns/2019 Assessment Year: N.A. GyanPeeth Trust, Sonebhadra, U.P. 6 Copy forwarded to: Appellant –1.GyanPeeth Trust, Ternahi, Robertsganj,Sonebhadra-222645, Uttar Pradesh 2. Respondent –The CIT(Exemption), T.C. 46-V UP State Construction Infrastructure Development Corporation, VibhutiKhand, Gomti Nagar, Lucknow 3. The CIT-DR, ITAT, Varanasi, U.P. 4. The CIT, Varanasi, U.P. By order Assistant Registrar