NECTAR TOWN FOUNDATION, Pune V. CIT(APPEALS EXEMPTION), PUNE

ITA 1827/PUN/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5191 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 27-09-2021
• Assessment Year: 2019-2020
• Appeal Filed On: 22-11-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: KRISH DESAI
• Keywords: Opportunity of being heard
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE (THROUGH VIRTUAL COURT) BEFORE SHRI INTURI RAMA RAO, AM AND SHRI PARTHA SARATHI CHAUDHURY, JM . / ITA NO.1827/PUN/2019 / ASSESSMENT YEAR : 2019-20 NECTAR TOWN FOUNDATION, SHOP FLOOR NO.311, RAINBOW PLAZA, RAINBOW REALITIES, S.NO.7, CTS NO.1099, RAHATANI, PUNE- 411017. PAN : AAGCN0676A ....... / APPELLANT / V/S. CIT (EXEMPTION), PUNE. / RESPONDENT ASSESSEE BY : SHRI KRISH DESAI REVENUE BY : SHRI DEEPAK GARG / DATE OF HEARING : 27.09.2021 / DATE OF PRONOUNCEMENT : 27.09.2021 / ORDER PER INTURI RAMA RAO, AM: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (EXEMPTION), PUNE [THE CIT (EXEMPTION)] FOR SHORT) U/S 12AA(1)(B)(II) OF THE INCOME TAX ACT, 1961 (THE ACT) DATED 25.09.2019 DENYING THE GRANT OF REGISTRATION U/S 12AA OF THE ACT. 2. BRIEFLY, THE FACTS OF THE CASE ARE AS UNDER :- THE APPELLANT IS A COMPANY REGISTERED U/S 8 OF THE COMPANIES ACT, 2013 ON 16.05.2018. THEREAFTER, THE APPELLANT COMPANY FILED AN APPLICATION IN FORM NO.10A FOR GRANT OF REGISTRATION U/S 12AA OF THE ACT ON 18.03.2019. IT IS ALSO A MATTER OF RECORD THAT THE APPELLANT COMPANY ALSO MADE AN APPLICATION IN FORM NO.10A FOR GRANT OF REGISTRATION U/S 12AA OF THE ACT ON 16.05.2018 WHICH CAME TO BE REJECTED VIDE ORDER DATED 31.01.2019. 2 ITA NO.1827/PUN/2019 SUBSEQUENTLY, THE PRESENT APPLICATION IN FORM NO.10A FOR GRANT OF REGISTRATION U/S 12AA OF THE ACT WAS FILED ON 18.03.2019. 3. ON RECEIPT OF THE APPLICATION IN FORM NO.10A, THE LD. CIT (EXEMPTION), PUNE HAD ISSUED A NOTICE THROUGH ITBA PORTAL TO THE APPELLANT COMPANY ON 10.05.2019 REQUESTING TO FURNISH CERTAIN OTHER INFORMATION/CLARIFICATION BY 18.06.2019. IN RESPONSE TO WHICH, THE APPELLANT COMPANY HAD FILED INFORMATION WHICH ACCORDING TO THE LD. CIT (EXEMPTION), SAME AS THE INFORMATION FILED PURSUANT TO THE EARLIER APPLICATION MADE ON 16.05.2018. BASED ON THE SAME INFORMATION, THE LD. CIT (EXEMPTION) TAKING NOTE OF THE OBSERVATION MADE BY HIM IN THE ORDER DATED 31.01.2019 REJECTING THE APPLICATION FOR GRANT OF REGISTRATION U/S 12AA OF THE ACT MADE ON 16.05.2018 COME TO CONCLUSION THAT THE ACTIVITIES OF THE TRUST/APPELLANT COMPANY ARE NOT GENUINE BASED ON THE FOLLOWING OBSERVATIONS :- (I) THE APPELLANT COMPANY INCURRED EXPENDITURE EVEN PRIOR TO THE INCORPORATION OF THE COMPANY. (II) THE APPELLANT COMPANY MADE ONLY GENERAL ENTRIES IN RESPECT OF THE EXPENDITURE INCURRED BY IT. 4. BEING AGGRIEVED BY THE ABOVE ORDER OF THE LD. CIT (EXEMPTION), THE APPELLANT IS IN APPEAL BEFORE US. 5. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IN OUR CONSIDERED OPINION, THE CONCLUSION REACHED BY THE LD. CIT (EXEMPTION) THAT THE ACTIVITIES OF THE TRUST/APPELLANT COMPANY ARE NOT GENUINE BASED ON THE OBSERVATIONS (SUPRA) IS NOT TENABLE FOR THE REASON THAT THERE IS NO BAR UNDER THE LAW TO INCUR THE EXPENDITURE EVEN PRIOR TO INCORPORATION OF THE COMPANY AND MERELY BECAUSE THE APPELLANT TRUST/COMPANY HAD MADE GENERAL ENTRIES IN RESPECT OF THE EXPENDITURE INCURRED BY THE APPELLANT COMPANY DOES NOT GO TO PROVE THAT THE ACTIVITIES OF THE TRUST/APPELLANT COMPANY ARE NOT 3 ITA NO.1827/PUN/2019 GENUINE. FURTHERMORE, THE LD. CIT (EXEMPTION) IS EXPECTED TO GIVE AN INDEPENDENT FINDINGS PURSUANT TO THE PRESENT APPLICATION AS TO THE NATURE OF THE OBJECTS AS WELL AS THE GENUINENESS OF THE ACTIVITIES CARRIED ON BY THE APPELLANT COMPANY. THE REASONS GIVEN FOR REJECTING THE GRANT OF REGISTRATION PURSUANT TO THE EARLIER APPLICATION CANNOT BE MECHANICALLY ADOPTED SUBSEQUENT TO THE PRESENT APPLICATION, AS BOTH THE PROCEEDINGS ARE INDEPENDENT FROM EACH OTHER. IN THE CIRCUMSTANCES, WE RESTORE THE MATTER BACK TO THE FILE OF THE LD. CIT (EXEMPTION) FOR DE NOVO CONSIDERATION ON THE TOUCHSTONE OF THE LAW LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF ANANDA SOCIAL & EDUCATIONAL TRUST VS. CIT, 114 TAXMANN.COM 693 (SC) AFTER GIVING AN OPPORTUNITY OF BEING HEARD TO THE APPELLANT COMPANY. THUS, THE GROUNDS OF APPEAL RAISED BY THE APPELLANT COMPANY ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 27 TH DAY OF SEPTEMBER, 2021. SD/- SD/- (PARTHA SARATHI CHAUDHURY) (INTURI RAMA RAO) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / PUNE; / DATED : 27 TH SEPTEMBER, 2021. SUJEET / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT (EXEMPTION), PUNE. 4 . , , , / DR, ITAT, A BENCH, PUNE. 5. / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE.