M/s Shree Somdutt Sharma Memorial Trust, Muzaffarnagar V. CIT(E), Lucknow

ITA 228/DEL/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6706 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 11-05-2016
• Assessment Year: misc
• Appeal Filed On: 18-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAKHI BIMAL S RDR
• Keywords: Opportunity of being heard; Corroborative evidences
• Section: 12A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: F: NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER, AND SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER ITA NO. 228/DEL /2016 SHREE SOMDUTT SHARMA MEMORIAL TRUST VS. THE C.I .T[E] VILLAGE NAGLA PITHORA LUCKNOW BLOCK BAGHRA, MUZAFFARANAGAR UTTAR PRADESH PAN : AAPTS 0806 B [APPELLANT] [RESPONDENT] DATE OF HEARING : 11.05.2016 DATE OF PRONOUNCEMENT : 29.07.2016 APPELLANT BY : SHRI ANIL JAIN, A DV RESPONDENT BY : SHRI RAKHI BIMAL, S R-DR ORDER PER CHANDRA MOHAN GARG, JUDICIAL MEMBER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE CIT(EXEMPTIONS), LUCKNOW, DATED 21/12/ 2015. 2. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D HAVE CAREFULLY PERUSED THE RELEVANT MATERIAL PLACED ON R ECORD ON THE 2 ITA NO. 228/D EL/2016 2 TRIBUNAL INTER ALIA ORDER U/S 12AA(1)(B)(III) OF TH E INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT'. 3. THE LD. AR DREW OUR ATTENTION TOWARDS ASSESSEES PAPER BOOK PAGES 20 AND 21 AND CONTENDED THAT THE ASSESSEE REP LIED TO THE NOTICE DATED 23.11.2015 OF THE CIT(E) SUPPLIED ALL REQUIRED DETAILS ALONGWITH RELEVANT DOCUMENTS BUT THE CIT(E) IN THE IMPUGNED ORDER INCORRECTLY OBSERVED THAT THE APPLIC ANT SOCIETY COULD NOT PRODUCE THE BOOKS, BANK STATEMENTS AND VO UCHERS IN RESPECT OF EXPENSES CLAIMED BY THE ASSESSEE FOR VER IFICATION OF GENUINENESS OF THE ACTIVITIES OF THE APPLICANT TRUS T. THE LD. AR ALSO POINTED OUT THAT THE APPLICATION OF THE ASSESS EE HAS BEEN DISMISSED ON VAGUE AND GENERAL ALLEGATIONS WHICH AR E NOT SUFFICIENT FOR REJECTION OF APPLICATION U/S 12A OF THE ACT. THE LD. AR ALSO SUBMITTED THAT THE CIT(E) WAS DUTY BOUND TO EXAMINE THE OBJECTS AND APPLICATION OF FUNDS BY THE ASSESSEE WH ICH HAS BEEN IGNORED AND FROM THE OBJECTS OF THE ASSESSEE, AS ME NTIONED IN THE COPY OF TRUST DEED DATED 13.10.2014, AVAILABLE AT PAGES 3 TO 19 OF THE ASSESSEES PAPER BOOK, CLAUSE (III), IT I S CLEAR THAT THE MAIN OBJECTS OF THE ASSESSEE IS TO SERVE THE NATION OF INDIA IN THE FIELD OF EDUCATION WITHOUT ANY DISCRIMINATION ON TH E BASIS OF CASTE OR CREED, RELIGION AND GENDER ETC WHICH HAS B EEN IGNORED BY 3 ITA NO. 228/D EL/2016 3 THE CIT(E) WHILE REJECTING THE APPLICATION OF THE A SSESSEE. THE LD. AR POINTED OUT THAT THE TRUST WAS CREATED ON 13 .10.2014 AND APPLICATION FOR REGISTRATION WAS FILED ON 29.6.2015 AND THERE WAS A SPAN OF ONLY 8 MONTHS AND DURING THIS SHORT PERIO D, THERE WAS NOTABLE ACTIVITY UNDERTAKEN BY THE ASSESSEE EXCEPT ACCEPTING DONATIONS AND PROCURING LAND FOR THE PURPOSE OF CON STRUCTION OF EDUCATIONAL INSTITUTION AS PER THE OBJECTS OF THE A SSESSEE-TRUST. THE LD. COUNSEL LASTLY POINTED OUT THAT THE ASSESSE E WAS NEVER ASKED TO SUBMIT ANY OTHER DOCUMENTS OR DETAILS EXCE PT BY NOTICE DATED 23.11.2015 BY FILING REPLY ON 18.12.2015, AVA ILABLE AT PAGES 20-21 OF ASSESSEES PAPER BOOK, ALONGWITH LIST OF T RUSTEES, LIST OF MEMBERS OF THE TRUST AND LIST OF ALL DONORS OF THE TRUST, AVAILABLE AT PAGES 20 TO 35 OF THE ASSESSEES PAPER BOOK. TH E ASSESSEE ALSO FILED DETAILS OF DONORS ABOVE RS. 1 LAKHS ALONGWITH THEIR CONFIRMATIONS, BANK STATEMENT, PROOF OF SOURCE OF I NCOME, AVAILABLE AT PAGES 58 TO 88 OF THE ASSESSEES PAPER BOOK. THE LD. AR POINTED OUT THAT AS PER THE COPY OF PURCHASE DEE D OF THE LAND AVAILABLE AT PAGES 89 TO 152 OF THE ASSESSEE PAPER BOOK, IT IS AMPLY CLEAR THAT THE LAND HAS BEEN PURCHASED BY REG ISTERED SALE DEED FROM RESPECTIVE LAND OWNERS IN THE NAME OF APP LICANT TRUST AND THERE IS NO MISUSE OF FUNDS OF THE ASSESSEE AND IT CANNOT BE 4 ITA NO. 228/D EL/2016 4 ALLEGED THAT THE DONATIONS RECEIVED BY THE APPLICAN T TRUST WERE EVER USED OTHER THAN OR BEYOND THE AMBIT OF CHARITA BLE OBJECT OF THE ASSESSEE-TRUST. 4. PER CONTRA, THE LD. DR SUPPORTED THE ORDER OF TH E LD. CIT(E) AND STRONGLY OPPOSED THE GRANT OF REGISTRATION U/S 12A OF THE ASSESSEE TO THE ASSESSEE AND SUBMITTED THAT NO BOOK S OF ACCOUNTS AND RELEVANT DOCUMENTS AND EVIDENCE WERE SUBMITTED BEFORE THE CIT(E) DESPITE OF SEVERAL REQUESTS. THE LD. AR ALS O POINTED OUT THAT THE ASSESSEE HAS SHOWN WORK-IN-PROGRESS BUT NO VOUCHERS OR DETAILS REGARDING BASIS OF WORK IN PROGRESS AS SHOW N BY THE ASSESSEE COULD BE FURNISHED BEFORE THE CIT(E). THE LD. DR ALSO DREW OUR ATTENTION TOWARDS PARA 8 AT PAGE 2 OF THE IMPUGNED ORDER AND POINTED OUT THAT THE LAW REQUIRES CONJUNC TIVE TEST WHEREBY OBJECTS HAVE TO BE CHARITABLE AND GENUINENE SS OF CHARITABLE ACTIVITIES SHOULD BE ESTABLISHED FOR REG ISTRATION OF APPLICATION U/S 12A. MERE RECITALS OF OBJECTS OR A CTIVITIES WITHOUT COGENT OR CORROBORATIVE EVIDENCES ARE NOT S UFFICIENT BY THEMSELVES TO ENABLE A REGISTERING AUTHORITY TO ARR IVE AT THE SATISFACTION MANDATED BY LAW. THE LD. DR ALSO CONT ENDED THAT NO SPECIFIC REPLY HAS BEEN FILED AND THE DOCUMENTS ON RECORD DO NOT SUFFICE TO ESTABLISH THE GENUINENESS OF THE ACTIVIT IES OF THE 5 ITA NO. 228/D EL/2016 5 ASSESSEE TRUST. AS SUCH, THE FINDINGS OF FACT REGA RDING ITS CHARITABLE ACTIVITIES OR RATHER THE LACK THEREOF AR RIVED AT ON THE BASIS OF EVIDENCE FILED AND ARGUMENTS ADDRESSED STA ND UNCONTROVERTED. FINALLY, THE LD. DR DID NOT RAISE ANY SERIOUS OBJECTION THE LD. ARS ALTERNATIVE PLEA THAT IF REQ UIRED THE ASSESSEE IS READY TO SUBMIT ALL THE RELEVANT DOCUME NTS, BOOKS OF ACCOUNTS ETC, FOR EXAMINATION FOR GRANT OF REGISTRA TION U/S 12A OF THE ACT. 5. ON CAREFUL CONSIDERATION OF THE ABOVE RIVAL SUBM ISSIONS, WE OBSERVE THAT AS PER CLAUSE (III) OF THE TRUST DEED, PRIMA FACIE, OBJECTS OF THE ASSESSEE SEEMS TO BE CARRYING OUT AC TIVITIES IN THE FIELD OF EDUCATION. AT THE SAME TIME, WE MAY POINT OUT THAT FROM THE OBSERVATIONS RECORDED BY THE CIT(E), IN PA RA 3 TO 8 OF THE IMPUGNED ORDER, WE ARE SATISFIED THAT THE ASSES SEE-APPLICANT TRUST COULD NOT PRODUCE BOOKS OF ACCOUNT, BANK STAT EMENT AND VOUCHERS IN RESPECT OF EXPENSES CLAIMED BY THE APPL ICANT FOR VERIFICATION OF GENUINENESS OF THE ACTIVITIES OF TH E TRUST. WE ALSO FIND THAT THE DUTY OF THE APPLICANT TO SATISFY THE REGISTRATION GRANTING AUTHORITY REGARDING CHARITABLE OBJECTS AND ITS ACTIVITIES FOR THE BENEFIT OF COMMON MAN WITHOUT ANY DISCRIMIN ATION BUT THE ASSESSEE COULD NOT GET OPPORTUNITY TO EXPLAIN T HE SAME 6 ITA NO. 228/D EL/2016 6 BEFORE THE CIT(E) AS AFTER RECEIVING THE REPLY FROM THE APPLICANT, REGARDING NOTICE DATED 23.11.2015 WHICH WAS FILED O N 18.12.2015, THE CIT(E) PROCEEDED TO ADJUDICATE THE APPLICATION OF THE ASSESSEE AND DISMISSED THE SAME AFTER ONLY TWO DAYS BY PASSING ORDER O, 21.12.2015 WITHOUT ANY FURTHER OPPORTUNITY TO THE ASSESSEE TO EXPLAIN AND ESTABLISH ITS CLAIM FOR GRA NT OF REGISTRATION. THEREFORE, IN THE INTEREST OF JUSTIC E, WE DEEM IT FIT TO RESTORE THE GROUNDS OF APPEAL RAISED BY THE ASSE SSEE TO THE FILE OF THE CIT(E) FOR FRESH ADJUDICATION. NEEDLESS TO MENTION THAT THE CIT(E) SHALL PROVIDE DUE AND PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE WITHOUT BEING PREJUDICED WITH THE EARLIER IMPUGNED ORDER. GROUNDS OF APPEAL RAISED BY THE ASS ESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 29.07. 2016. SD/- SD/- (S.V. MEHROTRA) (C.M. GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 29 TH JULY, 2016 VL/ 7 ITA NO. 228/D EL/2016 7 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI