Smt.Bhawari Bai Ghewarchandji Surana Charitable Trust , Bangalore V. The Commissioner of Income Tax (Exemptions) , Bangalore

ITA 1697/BANG/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6969 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 03-07-2019
• Assessment Year: 2017-2018
• Appeal Filed On: 22-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR P V PRADEEP KUMAR CI
• Assessee Lawyers: V GURUNATHAN
• Keywords: Charitable institution; Set aside
• Section: 12A; 12AA; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCHES C BENCH: BANGALORE BEFORE SHRI A.K. GARODIA, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO. 1697 /BANG/2018 SMT. BHAWARI BAI GHEWARCHANDJI SURANA CHARITABLE TRUST, NO.45/3, FAIR FIELD LAYOUT, RACE COURSE ROAD, BENGALURU 560 001 PAN: AARTS 8703M VS. COMMISSIONER OF INCOME TAX (EXEMPTIONS) , BANGALORE. (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI V. GURUNATHAN, ADVOCATE. REVENUE BY: SHRI PRADEEP KUMAR, CIT & DR. P. V. PRADEEP KUMAR, ADDL. CIT (D.R) DATE OF HEARING : 03.07 .2019 DATE OF PRONOUNCEMENT : 31 .07 .2019 O R D E R PER SHRI PAVAN KUMAR GADALE, JM : THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX ( EXEMPTIONS ), BANGALORE PASSED U/S .12AA(1)(B)(II) OF THE INCOME TAX ACT, 1961 DT.25.4.2018 . 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 2 ITA NO.1697/BANG/2018 3. THE BRIEF FACTS OF THE CASE THAT THE ASSESSEE - TRUST WAS REGISTERED WITH SUB - REGISTRAR, BAS AVANAGUDI, CHAMRAJPET ON 3.12.2016 WITH THE OBJECTS TO CONSTRUCT, RENOVATE AND ADMINISTER TEMPLES, DHARMASHALAS, SEMINAR HALLS PRAYER HALLS AS REFERRED AT 3 ITA NO.1697/BANG/2018 PAGE 2 OF THE TRUST DEED AND THEIR OBJECTS THERETO. FURTHER THE TRUST AND TRUSTEES OF MICRO LAB S LI MITED HAS DEDICATED A PORTION OF LAND AS REFERRED IN SCHEDULE B, BALEGARANAHALLI VILLAGE, ATTIBELLE, BANGALORE REFERRED TO AT PARA 4 OF THE TRUST DEED. SUBSEQUENTLY, THE ASSESSEE FILED AN APPLICATION FOR REGISTRATION UNDER SECTION 12A OF THE ACT ON 17.10 .2017 AND AT THE TIME OF REGISTRATION, THE ASSESSEE SUBMITTED THE INCOME TAX RETURNS AND TRUST DEED AND SUBSEQUENTLY ON RECEIPT OF THE LETTER DT.10.12.2018 RECEIVED ON 27.1.2018 FROM THE CIT (EXEMPTIONS) REQUIRING THE ASSESSEE TO FILE THE DETAILS REFERRED AT PAGE 34 OF PAPER BOOK. THE CIT (EXEMPTIONS) ON EXAMINATION OF THE INFORMATION SUBMITTED BY THE ASSESSEE CALLED FOR ADDITIONAL INFORMATIO N IN RESPECT OF MAINTENANCE OF B ANK ACCOUNTS AND AUTHORIZATION AND DEALT ON THE P R O V I S I O N S OF THE SCHEDULE BANK AS REFERRED UN DER SECTION 11(5) OF THE ACT FOR COLLECTING THE DONATIONS AND SUCH AMOUNTS RECEIVED WERE CREDITED TO THE BANK ACCOUNT AND PAYMENTS WERE ALSO REFLECTED. SUBSEQUENTLY, THE ASSESSEE TRUST FILED A LETTER DT.14.4.2018 EXPLAINING THE POINTS IN RESPE CT OF THE CASH DEPOSITS AND RELIED ON THE JUDICIAL DECISIONS. WHEREAS THE CIT (EXEMPTIONS) CONSIDERING THESE SUBMISSIONS AND FACTS OBSERVED 4 ITA NO.1697/BANG/2018 THAT UNLESS AND UNTIL THE TRUST IS REGISTERED, THE BENEFIT OF SECTION 11 CANNOT BE CONSIDERED AND ASSESSEE TRUST PA YMENTS MADE TO MR. HITEN V SHAH COULD NOT BE EXPLAIN ED PROPERLY AND FINALLY THE CIT (EXEMPTIONS) OBSERVED THAT THE ASSESSEE IS NOT INTERESTED IN PRO SECUTING THE APPLICATION FOR R E G I S T R A T I O N O F SEC. 12A OF THE ACT AS NO INFORMATION WAS RECEIVED IN LIEU OF QUE STIONNAIRE ISSUED BY THE CIT (APPEALS) (EXEMPTIONS) AND DISMISSED THE APPLICATION FOR R E G I S T R A T I O N UNDER SECTION 12A OF THE ACT. AGGRIEVED BY THE ORDER, THE ASSESSEE HAS FILED AN APPEAL BEFORE THE TRIBUNAL. 4. AT THE TIME OF HEARING, THE LEARNED AUTHO RISED REPRESENTATIVE SUBMITTED THAT THE ASSESSEE HAS OPENED THE BANK ACCOUNT WITH CANARA BANK WHICH IS A SCHEDULED BANK AND QUALIFIED FOR UTILIZATION OF FUNDS AND SIMILARLY, THE TRUST AND THE TRUSTEES OF MICRO LAB LIMITED HAS ALLOTTED A PORTION OF LAND FO R CONDU CTING THE TRUST ACTIVITIES. THE LEARNED AUTHORISED REPRESENTATIVE REFERRED TO PAGE 73 OF THE PAPER BOOK WHERE THE ASSESSEE HAS EXPLAINED THAT THE DONATIONS ARE RECEIVED FROM MICRO LAB LTD. AND ALSO ON THE REIMBURSEMENT OF EXPENSES TO SHRI DILIP SUR ANA. THE CONTENTION OF THE LD. AR THAT THE ASSESSEE TRUST WAS REGISTERED WITH THE SRO, STATE GOVERNMENT AND OBJECTS ARE CHARITABLE IN 5 ITA NO.1697/BANG/2018 NATURE . THE DETAILS OF EXPENSES INCURRED BY THE TRUST WERE FILED IN THE COURSE OF HEARING REFERRED AT PAGE 74 OF THE PAPER BOOK. THE LD. AR VEHEMENTLY ARGUED THAT THE LEARNED CIT (EXEMPTIONS) HAS NOT PROVIDED ADEQUATE OPPORTUNITY INSPITE OF SUBMITTING ALL THE REQUIRED INFORMATION AND SUPPORTED HIS STAND WITH THE JUDICIAL DECISIONS IN RESPECT OF GRANTING OF REGISTRATI ON UNDER SECTION 12A OF THE ACT . CONTRA, THE LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF LEARNED CIT (EXEMPTIONS) AND SUBMITTED THAT ACTIVITIES OF THE TRUST ARE NOT I N CHARITABLE NATURE AND PRAYED FOR DISMISSAL OF APPEAL. 5. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. PRIMA FACIE, THE MAIN DISPUTED ISSUE IS WITH RESPECT TO REJECTION OF REGISTRATION UNDER SECTION 12AA BY THE CIT (EXEMPTIONS). THE LD. ARS CONTENTION THAT THE LEARNED CIT (EXEMPTIONS ) HAS NOT CONSIDERED THE VITAL MATERIAL AND RESTRICTED HIS OBSERVATIONS ONLY TO A PARTICULAR CLAIM AND NON - COMPLIANCE. THE LD. AR FURTHER EMPHASIZED AT THE TIME OF REGISTRATION THE LEARNED CIT (EXEMPTIONS) HAS TO VERIFY THE GENUINENESS OF THE TRUST WHICH PRIMA FACIE, THE ASSESSEE WAS ABLE TO PROVE WITH E V I D E N C E . WE FIND THAT THE ASSESSEE HAS SUBMITTED THE INFORMATION 6 ITA NO.1697/BANG/2018 AS REQUIRED BY THE CIT (EXEMPTIONS) AT PAGE 4 OF THE ORDER. FURTHER INFORMATION COULD NOT BE SUBMITTED AND HENCE THE CIT (EXEMPTIONS) HAS REJECTED APPLICATION FOR REGISTRATION UNDER SECTION 12AA OF THE ACT. THE LEARNED AUTHORISED REPRESENTATIVE RELIED ON PLETHORA OF JUDICIAL DECISIONS TO SUPPORT THE STAND THAT THE ACTIVITIES OF THE TRUST ARE CHAR ITABLE . UNDER THESE FACTS, WE FEEL IT PROP ER TO RESTORE THE MATTER BACK TO CIT (EXEMPTIONS) FOR FRESH DECISION AFTER CONSIDERING ALL EVIDENCES BROUGHT ON RECORD AND WHICH MAY BE BROUGHT ON RECORD IN SET ASIDE PROCEEDINGS AND PASS NECESSARY ORDER AS PER LAW AFTER PROVIDING ADEQUATE OPPORTUNITY A N D SHOULD PASS A SPEAKING AND REASON E D ORDER. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 3 1 S T JULY, 2019. S D / - S D / - (A.K. GARODIA) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 3 1 .07. 2019. *REDDY GP 7 ITA NO.1697/BANG/2018 COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT (A) 4. PR. CIT 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME - TAX APPELLATE TRIBUNAL BANGALORE