Maharashtra Environmental Engineering Training Research Academy, Nashik V. Commissioner of Income-tax - 1,

ITA 2131/PUN/2014

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 5451 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 01-10-2018
• Assessment Year: misc
• Appeal Filed On: 01-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard
• Section: 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO. 2131 /P U N/201 4 ORDER UNDER SECTION 12AA OF THE ACT MAHARASHTRA ENVIRONMENTAL ENGINEERING TRAINING RESEARCH ACADEMY, MEETRA, OPP. REVENUE COMMISSIONER OFFICE, ISP ROAD, NASHIK ROAD, NASHIK 422101 . / APPELLANT PAN: A ACAM8190Q VS. THE COMMISSIONER OF INCOME TAX - I, NASHIK . / RESPONDENT / APPELLANT BY : S HRI PRAMOD SHINGTE / RESPONDENT BY : SHRI RAJEEV KUMAR / DATE OF HEARING : 0 3 . 1 0 . 201 8 / DATE OF PRONOUNCEMENT: 16 . 1 0 .201 8 / ORDER PER SUSHMA CHOWLA, J M : TH E APPEAL FILED BY ASSESSEE IS AGAINST ORDER OF CIT - 1, NASHIK , DATED 30 .0 9 .201 4 PASSED UNDER SECTION 12AA OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT ) . 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - ITA NO. 2131 /P U N/20 1 4 MAH. ENVIRONMENTAL ENGG. TRAINING RESEARCH ACADEMY 2 1. THE HONBLE COMMISSIONER OF INCOME TAX - I, NASHIK ERRED IN APPRECIATING THE SUBMISSIONS, WHILE PASSING HIS ORDER REJECTING APPLICATION FOR REGISTRATION U/S 12AA OF THE INCOME TAX ACT, 1961 . 2. THE HONBLE COMMISSIONER OF INCOME TAX - I, NASHIK ERRED IN REJECTING THE REGISTRATION OF TRUST U/S 12AA WITHOUT GIVING A REASONABLE TIME TO EXPLAIN THE FACTS. 3. THE HONBLE COMMISSIONER HAS ERRED IN RELYING ON THE NON - RECOMMENDATION OF REGISTRATIO N ADVISED BY THE LD. A.O. AND JT. CIT WITHOU T INTIMATING THE REASONS THEREOF. 4. THE ORDER DT. 30/09/2014 PRONOUNCED BY THE HONBLE COMMISSIONER OF INCOME TAX - I, NASHIK REJECTING THE REGISTRATION OF TRUST U/S 12AA BE SET ASIDE AND THE HONBLE COMMISSIONER OF INCOME TAX - I, NASHIK BE DIRECTED TO GRANT THE REGISTRATION OF THE SAME UNDER THE INCOME TAX ACT, 1961 TO THE APPELLANT TRUST. 3. THE ASSESSEE IS AGGRIEVED BY THE ORDER OF COMMISSIONER IN REJECTING APPLICATION MADE FOR REGISTRATION OF TRUST UNDER SECTI ON 12AA OF THE ACT WITHOUT GIVING REASONABLE TIME TO EXPLAIN THE FACTS. 4. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE HAD FILED APPLICATION IN FORM NO.10A OF THE ACT FOR REGISTRATION OF CHARITABLE OR RELIGIOUS TRUST UNDER SECTION 12AA OF THE ACT ON 3 0.03.2014. THE COMMISSIONER NOTED THAT TRUST WAS CREATED ON 19.11.2012 AND WAS REGISTERED UNDER THE BOMBAY PUBLIC TRUSTS ACT ON 19.11.2012. THE ASSESSING OFFICER HAD SUBMITTED HIS REPORT DATED 22.09.2014 THROUGH JOINT CIT, RANGE - 1, NASHIK. BOTH THE ASSE SSING OFFICER AND JOINT CIT, RANGE - 1, NASHIK DID NOT RECOMMEND THE APPLICATION FOR REGISTRATION UNDER SECTION 12A OF THE ACT. THE COMMISSIONER FURTHER NOTES THAT LETTER DATED 18.09.2014 WAS ISSUED TO THE TRUST PROVIDING AN OPPORTUNITY OF BEING HEARD ON 24 .09.2014 AND HE WAS ALSO REQUESTED TO PRODUCE THE BOOKS OF ACCOUNT/BILLS/VOUCHERS FOR VERIFICATION. IN RESPONSE, SHRI A.D. DESHPANDE, ADMINISTRATIVE AND FINANCE OFFICER ATTENDED ON 24.09.2014 AND 29.09.2014. HE WAS AGAIN ASKED TO PRODUCE BOOKS OF ACCOUNT FOR VERIFICATION AND PROOF OF CARRYING OUT THE CHARITABLE ACTIVITIES. SINCE THE ASSESSEE TRUST DID NOT PRODUCE ITA NO. 2131 /P U N/20 1 4 MAH. ENVIRONMENTAL ENGG. TRAINING RESEARCH ACADEMY 3 BOOKS OF ACCOUNT, THE COMMISSIONER HELD THAT IT WAS NOT CARRYING OUT THE CHARITABLE ACTIVITIES, HENCE THE APPLICATION FOR REGISTRATION UNDER SE CTION 12AA OF THE ACT WAS REJECTED BY COMMISSIONER. 5. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF COMMISSIONER. 6. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT TRUST WAS CONSTITUTED AS AN AUTONOMOUS INSTITUTE AND WAS IN THE PROCESS OF DEVELOPMENT AND NO ACTIVITIES WERE BEING CARRIED OUT AT THE RELEVANT TIME. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FURTHER STATED THAT FOR FINANCIAL YEAR 2013 - 14, THE TRUST HAD CARRIED OUT ITS AUDIT AND HENCE, BOOKS OF ACCOUNT W ERE NOW AVAILABLE WITH THE ASSESSEE. HE FURTHER STATED THAT THE COMMISSIONER HAS FAILED TO GIVE A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE SINCE THE HEARING TOOK PLACE TOWARDS THE FAG - END OF ORDER PASSING DEADLINE OF 30.09.2014. 7. THE LEARNED D EPARTMENTAL REPRESENTATIVE FOR THE REVENUE ON THE OTHER HAND, PLACED RELIANCE ON THE ORDER OF COMMISSIONER. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. UNDER THE PROVISIONS OF SECTION 12A OF THE ACT, IT IS PROVIDED THAT THE COMMISSIONE R ON RECEIPT OF AN APPLICATION FOR REGISTRATION OF TRUST OR INSTITUTION UNDER SECTION 12A OF THE ACT, SHALL, CALL FOR SUCH DOCUMENTS OR INFORMATION FROM THE TRUST OR INSTITUTION, IN ORDER TO SATISFY HIMSELF ABOUT THE GENUINENESS OF ACTIVITIES OF THE TRUST OR INSTITUTION AND MAY ALSO MAKE SUCH ENQUIRIES AS HE MAY DEEM NECESSARY IN THIS BEHALF UNDER CLAUSE (B). IT IS FURTHER PROVIDED THAT AFTER ITA NO. 2131 /P U N/20 1 4 MAH. ENVIRONMENTAL ENGG. TRAINING RESEARCH ACADEMY 4 SATISFYING HIMSELF ABOUT THE OBJECT OF TRUST OR INSTITUTION AND THE GENUINENESS OF ACTIVITIES, COMMISSIONER SHALL P ASS AN ORDER IN WRITING REGISTERING THE TRUST OR INSTITUTION , O R SHALL, IF HE HAS NOT SO SATISFIED, PASS AN ORDER IN WRITING REFUSING TO REGISTER THE TRUST OR INSTITUTION. UNDER THE PROVISO, IT IS FURTHER PROVIDED THAT NO ORDER SHALL BE PASSED BY THE COMM ISSIONER UNDER SUB - CLAUSE (2) UNLESS THE APPLICANT HAS BEEN GIVEN REASONABLE OPPORTUNITY OF BEING HEARD. IT IS FURTHER PROVIDED UNDER SUB - SECTION (2) TO SECTION 12AA OF THE ACT THAT EVERY ORDER GRANTING OR REFUSING REGISTRATION SHALL BE PASSED BEFORE THE EXPIRY OF SIX MONTHS FROM THE END OF MONTH IN WHICH APPLICATION WAS RECEIVED. AS PER REQUIREMENT OF THE ACT, THE COMMISSIONER AFTER RECEIVING APPLICATION FOR REGISTRATION OF TRUST OR INSTITUTION UNDER SECTION 12A OF THE ACT HAS TO BE SATISFIED ABOUT THE O BJECTS OF TRUST OR INSTITUTION AND GENUINENESS OF ITS ACTIVITIES IN WHICH REGARD, HE CAN MAKE ANY ENQUIRY, HE MAY DEEM FIT. THE SATISFACTION OF TRUST AND GENUINENESS OF ITS ACTIVITIES IS NOT NECESSARILY TO BE SEEN FROM THE BOOKS OF ACCOUNT BECAUSE IN MANY CASES, THE TRUST OR INSTITUTION MAY APPLY FOR ITS REGISTRATION BEFORE START OF ITS ACTIVITIES, HENCE AN APPLICANT CANNOT BE PRESSED TO PRODUCE BOOKS OF ACCOUNT. IN THE FACTS OF PRESENT CASE, THE TRUST WAS CREATED ON 19.11.2012, IT WAS REGISTERED UNDER TH E BOMBAY PUBLIC TRUSTS ACT ON 31.01.2013. THE TRUST HAD FILED APPLICATION FOR REGISTRATION UNDER SECTION 12A OF THE ACT ON 30.03.2014. THE ORDER HAD TO BE PASSED BY THE COMMISSIONER UNDER SECTION 12AA OF THE ACT BY 30.09.2014. THE PERUSAL OF ORDER REFLE CTS THAT FOR THE FIRST TIME A LETTER WAS ISSUED TO THE APPLICANT TRUST ON 18.09.2014 AND THE REPRESENTATIVE HAD ATTENDED ON 24.09.2014 AND 29.09.2014. THE ORDER WAS PASSED ON 30.09.2014. THE ASSESSEE FOR THE FIRST TIME HAS PREPARED ITS ACCOUNTS FOR THE F INANCIAL YEAR 2013 - 14 WHICH COULD NOT BE PRODUCED. IN THE FIRST INSTANCE, THE COMMISSIONER WHILE VERIFYING THE OBJECTS OF TRUST AND ITA NO. 2131 /P U N/20 1 4 MAH. ENVIRONMENTAL ENGG. TRAINING RESEARCH ACADEMY 5 GENUINENESS OF ITS ACTIVITIES NEED NOT ONLY CONSIDER THE BOOKS OF ACCOUNT BUT CAN ALSO TAKE INTO CONSIDERATION EVIDENCE WHI CH PROVES THE GENUINENESS OF ACTIVITIES CARRIED ON BY THE ASSESSEE AND COME TO A FINDING WHETHER THE SAME ARE CHARITABLE OR NOT. THE ASSESSEE BEFORE US HAS ALSO FILED AUDITED REPORT FOR FINANCIAL YEAR 2012 - 13, WHEREIN THERE WAS NO INCOME & EXPENDITURE IN THE HANDS OF ASSESSEE. HE HAS FURTHER FILED COPY OF INCOME & EXPENDITURE ACCOUNT FOR THE FINANCIAL YEAR 2013 - 14 AND 2014 - 15. HENCE, WE FIND NO MERIT IN THE ORDER OF COMMISSIONER IN THIS REGARD. 9. NOW, COMING TO THE SECOND ASPECT OF THE ORDER PASSED, WH EREIN THE COMMISSIONER HAS REFERRED TO THE LETTERS OF ASSESSING OFFICER AND JOINT CIT, WHO HAVE NOT RECOMMENDED APPLICATION FOR REGISTRATION UNDER SECTION 12A OF THE ACT. FIRST OF ALL, THE REASONS FOR NOT RECOMMENDING APPLICATION ARE NOT CLEAR AND SECONDL Y, THE SAID LETTER HAS NOT BEEN SHOW CAUSED TO THE ASSESSEE, HENCE THE COMMISSIONER HAS ERRED ON RELYING ON THE SAME. 10. ANOTHER ASPECT OF THE PROCEEDINGS BEFORE THE COMMISSIONER IS FAILURE TO PROVIDE REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. THE COMMISSIONER STARTED THE PROCEEDINGS AT FAG END OF PERIOD OF SIX MONTHS AVAILABLE TO HIM AND DID NOT PROVIDE REASONABLE OPPORTUNITY. IN THE TOTALITY OF THE ABOVE SAID FACTS AND CIRCUMSTANCES, WE HOLD THAT THE ORDER OF COMMISSIONER SUFFERS FROM NOT GI VING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. HENCE, WE REMIT THIS ISSUE BACK TO THE FILE OF COMMISSIONER TO LOOK INTO THE OBJECTS OF TRUST AND GENUINENESS OF ITS ACTIVITIES AND DECIDE THE ISSUE OF GRANT OF REGISTRATION TO THE ASSESSEE UNDER SEC TION 12AA OF THE ACT. THE COMMISSIONER SHALL AFFORD REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE WHILE DECIDING THE ISSUE. ITA NO. 2131 /P U N/20 1 4 MAH. ENVIRONMENTAL ENGG. TRAINING RESEARCH ACADEMY 6 THE GROUNDS OF APPEAL RAISED BY ASSESSEE ARE THUS, ALLOWED FOR STATISTICAL PURPOSES. 1 1 . IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 16 TH DAY OF OCTOB ER , 201 8 . SD/ - SD/ - (ANIL CHATURVEDI) (SUSHMA CHOWLA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 16 TH OCTOB ER , 201 8 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3 . 4 . , , / DR A , ITAT, PUNE ; / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE