Appeal details
Counselvise Citation
[2021] 108 COUNSELVISE.COM (IT) 3657 (ITAT-CHANDIGARH)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 3 month(s) 12 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
31-05-2021
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
B
Next Hearing Date
03-03-2021
Assessment Year
2019-2020
Appeal Filed On
17-02-2020
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, B CHANDIGARH BEFORE SHRI N.K. SAINI, VICE PRESIDENT & SHRI R.L NEGI, JUDICIAL MEMBER ./ ITA NO. 173/CHD/2020 [ [ / ASSESSMENT YEAR : 2019-20 OD RAJPUT DHARAMSHALA CHARITABLE TRUST HARIDWAR, HOUSE NO. 1034, URBAN ESTATE 2, HISAR (HARYANA) THE CIT (EXEMPTIONS), CHANDIGARH ./PAN NO: AAAT07269B / APPELLANT /RESPONDENT HEARING THROUGH VIDEO CONFERENCING [ /ASSESSEE BY : SHRI TEJ MOHAN SINGH, ADVOCATE / REVENUE BY : SHRI SANDEEP DAHIYA, CIT /DATE OF HEARING : 03.03.2021 / DATE OF PRONOUNCEMENT : 31.05.2021 / ORDER PER R.L. NEGI, JUDICIAL MEMBER: THE ASSESSEE HAS FILED THE CAPTIONED APPEAL AGAINST THE ORDER DATED 03.02.2020 PASSED BY THE COMMISSIONER OF INCOME TAX (EXEMPTIONS), CHANDIGARH [(FOR SHORT THE CIT(E)], U/S 12AA(1)(B)(II) OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT') WHEREBY THE LD. CIT(E) HAS DISMISSED THE APPLICATION FILED BY THE APPELLANT TRUST FOR REGISTRATION U/S 12A OF THE ACT. 2. BRIEF FACTS OF THE CASE ARE THAT THE APPELLANT TRUST APPLIED FOR REGISTRATION U/S 12A OF THE ACT BEFORE THE LD. CIT(E). IN ORDER TO 2 ITA NO. 173-C-2020 OD DHARAMSHALA CHARITABLE TRUST, HISAR APPRAISE THE OBJECTS OF THE TRUST AND ACTIVITIES, THE LD. CIT(E) DIRECTED THE APPLICANT TO SUBMIT THE DETAILS/DOCUMENTS. IN RESPONSE THEREOF, THE TRUST SUBMITTED THE SAME THROUGH ITBA PORTAL. AFTER GOING THROUGH THE DETAILS AND DOCUMENTS SUBMITTED BY THE APPLICANT, THE LD. CIT(E) REJECTED THE APPLICATION OF THE TRUST HOLDING THAT THE APPLICANT IS NOT ELIGIBLE FOR REGISTRATION U/S 12AA OF THE ACT, 3. THE ASSESSEE HAS CHALLENGED THE IMPUGNED ORDER ON THE FOLLOWING GROUNDS: - 1. THAT THE LD. COMMISSIONER OF INCOME TAX (EXEMPTIONS) HAS ERRED IN LAW AS WELL AS ON FACTS IN REJECTING APPLICATION FOR REGISTRATION UNDER SECTION 12AA OF THE ACT WHICH IS ARBITRARY & UNJUSTIFIED. 2. THAT THE LD. COMMISSIONER OF INCOME TAX (EXEMPTIONS) HAS ERRED IN OBSERVING THAT THE ASSESSEE SOCIETY HAS DIVERTED THE RECEIPTS AMOUNTING TO RS.45,70,001.80 TO BALANCE SHEET DURING FY 2018-19 WHICH ARE ON ACCOUNT OF ADDITION TO CORPUS FUND INSTEAD OF TAKING THE SAME INTO INCOME AND EXPENDITURE ACCOUNT WITHOUT ANY REASONING AND AS SUCH THE ORDER PASSED IS ARBITRARY AND UNJUSTIFIED. 3. THAT THE LD. COMMISSIONER OF INCOME TAX HAS ERRED IN LAW AS WELL AS ON FACTS IN OBSERVING THAT BEFORE THE GRANT OF REGISTRATION THAT ALL VOLUNTARY CONTRIBUTIONS INCLUDING CORPUS DONATIONS WITH SPECIFIC DIRECTIONS IS INCOME OF THE TRUST AND LEGITIMATE TAXES OUGHT TO HAVE BEEN PAID BEFORE CONSIDERING THE APPLICATION FOR REGISTRATION WHICH IS NOT A CONDITION PRECEDENT FOR GRANT OF REGISTRATION AND AS SUCH THE ORDER PASSED IS ILLEGAL, ARBITRARY AND UNJUSTIFIED. 4. THAT THE LD. COMMISSIONER OF INCOME TAX HAS ONLY TO SEE THE CHARITABLE NATURE AND GENUINENESS OF THE OBJECTS OF THE TRUST AT THE TIME OF GRANT OF REGISTRATION WHICH HAVE NOT BEEN HELD TO BE NON-CHARITABLE OR NON- GENUINE AND AS SUCH THE ORDER DENYING REGISTRATION IS ILLEGAL, ARBITRARY AND UNJUSTIFIED. 3 ITA NO. 173-C-2020 OD DHARAMSHALA CHARITABLE TRUST, HISAR 5. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS FINALLY HEARD OR DISPOSED OFF. 6. THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX IS ERRONEOUS, ARBITRARY, OPPOSED TO LAW AND FACTS OF THE CASE AND IS, THUS, UNTENABLE. 7. 4. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED BEFORE US THAT APPELLANT/ APPLICANT IS A TRUST CREATED FOR ESTABLISHING A DHARAMSHALA AT HARIDWAR FOR GENERAL PUBLIC, TO MAKE LODGING ARRANGEMENT FOR GENERAL PUBLIC COMING FROM DIFFERENT PARTS OF THE COUNTRY, TO ESTABLISH A LIBRARY HAVING BOOKS ON ANCIENT INDIAN HISTORY AND OTHER EDUCATIONAL BOOKS FOR UPLIFTMENT OF POOR CHILDREN, FOR ORGANIZING YOGA CLASSES ETC. THE LD. COUNSEL FURTHER SUBMITTED THAT SINCE THE APPELLANT/APPLICANT HAD APPLIED FOR REGISTRATION U/S 12A OF THE ACT, THE LD. COMMISSIONER WAS REQUIRED TO EXAMINE THE OBJECTS AND THE ACTIVITIES OF THE TRUST TO ASCERTAIN AS TO WHETHER THE SAME ARE GENUINE OR NO IN ACCORDANCE WITH THE RELEVANT PROVISIONS OF THE ACT. THE LD. COUNSEL FURTHER CONTENDED THAT IN THE PRESENT CASE, THE LD. CIT(E) HAS REJECTED THE APPLICATION AND DENIED REGISTRATION WITHOUT EXAMINING THE OBJECTS AND ACTIVITIES OF THE TRUST, THE IMPUGNED ORDER IS BAD IN LAW. THE LD. COUNSEL FURTHER SUBMITTED THAT SINCE THE LD. COUNSEL FURTHER SUBMITTED THAT THE LD. CIT(E) HAS WRONGLY HELD THAT THE APPELLANT TRUST HAS DIVERTED THE RECEIPTS AMOUNTING TO RS. 45,70,001.80/- TO BALANCE SHEET DURING THE FINANCIAL YEAR 2018-19. ACCORDINGLY, THE COUNSEL SUBMITTED THAT THE IMPUGNED ORDER MAY BE 4 ITA NO. 173-C-2020 OD DHARAMSHALA CHARITABLE TRUST, HISAR SET ASIDE AND THE LD. CIT(E) MAY BE DIRECTED TO ALLOW THE APPLICATION AND GRAND REGISTRATION TO THE APPELLANT TRUST. 5. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTATIVE (DR) SUPPORTING THE ACTION OF THE LD. CIT(E) SUBMITTED THAT THERE IS NO INFIRMITY IN THE ORDER OF THE IMPUGNED ORDER TO INTERFERE WITH. 6. WE HAVE PERUSED THE MATERIAL ON RECORD. AS POINTED OUT BY THE LD. COUNSEL THE LD. CIT(E) HAS DENIED THE REGISTRATION TO THE APPELLANT TRUST WITHOUT GIVING ANY FINDINGS ON THE OBJECTS OF THE TRUST AND THE ACTIVITIES CARRIED OUT BY THE TRUST, WHICH ARE THE CONDITION PRECEDENT FOR DETERMINING THE ELIGIBILITY FOR REGISTRATION U/S 12A OF THE ACT. THE PURPOSE OF THE PROVISIONS UNDER SECTION 12AA IS TO ENSURE THAT THE ACTIVITIES OF THE TRUST ARE CHARITABLE AND NOT CONTRARY TO OBJECTS STIPULATED IN THE TRUST DEED. SINCE THE SECTION 12AA PRESCRIBES THE PROCEDURE FOR REGISTRATION OF A TRUST OR INSTITUTION MADE UNDER CLAUSE (A) OR CLAUSE (AA) OR CLAUSE (AB) OF SUB SECTION (1) OF U/S 12A, THE LD. CIT(E) IS BOUND TO EXAMINE AS TO WHETHER THE OBJECTS OF THE TRUST ARE CHARITABLE IN NATURE AND WHETHER THE ACTIVITIES CARRIED OUT OR PROPOSED TO BE CARRIED OUT BY THE TRUST ARE IN ACCORDANCE WITH THE OBJECTS OF THE TRUST. WE NOTICE THAT IN THE PRESENT CASE, THE LD. CIT(A) HAS NOT TAKEN INTO CONSIDERATION THE SAID ISSUES WHILE DECIDING THE APPLICATION U/S 12A OF THE ACT. IN OUR CONSIDERED OPINION, THE LD. CIT(E)HAS NOT DEALT WITH THE APPLICATION 5 ITA NO. 173-C-2020 OD DHARAMSHALA CHARITABLE TRUST, HISAR OF THE APPELLANT TRUST IN ACCORDANCE WITH THE PROVISIONS OF THE ACT. UNDER THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE MATTER REQUIRES FRESH CONSIDERATION BY THE LD. CIT(E). HENCE, WE SET ASIDE THE IMPUGNED ORDER AND SEND THE APPEAL BACK TO THE LD. CIT(E) FOR DECIDING THE APPLICATION AFRESH IN ACCORDANCE WITH THE PROVISIONS OF LAW AFTER AFFORDING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE APPLICANT TRUST. IN THE RESULT, THE APPEAL FILED BY THE APPELLANT TRUST IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 31/05/2021. SD/- SD/- ( N.K. SAINI) (R.L.NEGI) / VICE PRESIDENT / JUDICIAL MEMBER DATED : 31/05/2021 .. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. / CIT 4. ( )/ THE CIT(A) 5. , , / DR, ITAT, CHANDIGARH 6. [ / GUARD FILE / BY ORDER, / ASSISTANT REGISTRAR
