Rajkot Chamber of Commerce & Industries, Rajkot V. The CIT(exemption), Ahmedabad

ITA 263/RJT/2019

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 5367 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 8 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-07-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2018-2019
• Appeal Filed On: 06-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT Before: Shri Waseem Ahmed, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member Rajkot Chamber of Co mmerc e & Industry, Center Point, Karan sinhji Main Road, Rajkot PAN: AA BAR48 96B (Appellant) Vs The CIT (Ex emp tio n), Ah med abad (Resp ondent) Asses see by : Shri R. D. Lalchandani, A. R. Revenue by : Shri S anjeev Jain, CIT-D. R. Date of hearing : 30-06 -2022 Date of pronouncement : 20-07-2022 आदेश /ORDER PER BENCH:- This assessee’s appeal for A.Y. 2018-19, arises from order of the CIT (Exemption), Ahmedabad dated 23-09-2019, in proceedings under section 12AA(1)(b)(ii) of the Income Tax Act, 1961; in short “the Act”. ITA No. 263 /Rjt/2019 Assessment Year 2018-19 I.T.A No. 263/Rjt/2019 A.Y. 2018-19 Page No Rajkot Chamber of Commerce & Industry vs. CIT (Exemption) 2 2. The assessee has raised the following grounds of appeal:- “1. The Commissioner of Income Tax erred in refusing to grant approval to the Association under section 12AA of the Act. 2. Without prejudice to ground no 1, the Association had filed the details to the extent available with the Commissioner of Income Tax. 3. Without prejudice to ground no 1 & 2 the Appellant is ready to file all other details as may be required by the Commissioner.” 3. The brief facts of the case are that the assessee / applicant filed an application for registration of the trust section 12AA of the Act which was received by the office of the CIT (Exemption) on 09-03-2019 in Form number 10A under Rule 17A of the Income Tax Rules, 1962. The CIT (Exemption) issued letter dated 05-08-2019 asking the applicant to furnish certain details in respect of the activities carried out the Trust as well as certain details/documents as mentioned in the said letter. In response, the applicant filed a request for adjournment. Thereafter, CIT (Exemption) issued another notice to the applicant on 24-08-2019 asking the applicant to furnish detailed note of the activities carried out by the Trust, however, the notice remained un-compiled with. Therefore, the CIT (Exemptions) dismissed the application of the assessee/applicant for registration of the Trust under section 12AA of the Income Tax Act, with the following observations: I.T.A No. 263/Rjt/2019 A.Y. 2018-19 Page No Rajkot Chamber of Commerce & Industry vs. CIT (Exemption) 3 “6. Perusal of submission filed reveals that the applicant has not filed self-certified copy of registration with Registrar of Companies or Registrar of Firms and Societies or Registrar of Public Trusts, as the case may be, self certified copy of Memorandum of Association and Rules & Regulations/Articles of Association/Trust Deed/Constitution/Public Trust Register (PTR), Bank Statement, Receipt and Payment Account, Income & Expenditure Account & Audited Account for the F.Y. 2018-19 and Provisional Account for the period 01.04.2019 to till date, ID proof of the trustees and Copy of PAN card of the trust, Undertaking u/s. 2(15), 11(5), 13(1)(c) & 13(3) of the I.T. Act, 1961, Details regarding donations received & paid and No Objection Certificate from the owner of the premises from which it operating along with proof of his ownership. In spite of specific requisitions, the applicant has not submitted the requisite details. Therefore, no verification of the objects as per the trust deed with the activities carried out if any could be made. Thus, the genuineness of the activities does not get established. This clearly indicates that the applicant does not have intention even to start charitable/religious activities. Section 12AA makes, it very clear that before granting registration under this section, the Commissioner has to satisfy himself about the genuineness of the activities of the trust or institution and also he has to verify that these activities are in consonance with the objects of the trust or institution. Reliance in this regard is placed on judgment delivered by the Hon'ble Supreme Court in the case of Commissioner of Income-tax, Ujjain Vs Dawoodi Bohara Jamat Civil Appeal No. 2492 of 2014. The facts considered in Para 14 of the judgment by the Hon'ble Apex Court are reproduced for sake of convenience: "Section 12AA lays down the procedure to be followed by the Commissioner for grant or refusal of application for registration made under Section 12A. According to procedure so laid down, the Commissioner shall call for documents and information and conduct an enquiry to satisfy himself of the genuineness of the trust and upon reaching satisfaction of the charitable or religious nature of the objects and the authenticity of the activities of the trust, he would grant registration. If he is not satisfied of the aforesaid, the request made in the application may be declined." I.T.A No. 263/Rjt/2019 A.Y. 2018-19 Page No Rajkot Chamber of Commerce & Industry vs. CIT (Exemption) 4 As discussed above, the applicant has failed to file documentary evidences to enable me to satisfy about the genuineness of its activities and to verify these activities are in consonance with its objects. 7. Looking to the above facts, I am unable to arrive at the satisfaction of the genuineness of the activities. Hence, the application filed in Form No. 10A for the approval u/s. 12AA of the IT. Act, 1961, is rejected.” 4. The assessee/applicant is in appeal before us against the aforesaid order passed by CIT (Exemptions) dismissing the application of the assessee/applicant, without giving an opportunity of being heard. The counsel for the assessee submitted that the Trust is carrying out activities within the scope permitted under the Income Tax Act, and if given an opportunity of hearing, the assessee/applicant is willing to file all necessary details/documents as may be required for registration of Trust. The counsel for the assessee submitted that the order dismissing the application of the assessee/applicant has been passed ex- parte without giving him a fair opportunity of hearing. Given the above facts, we note that the CIT (Exemptions) passed the order ex-parte and the assessee/applicant did not have opportunity to present his case in detail. We note is that only two notices of hearing were issued to the assessee/applicant out of which only one remained un-compiled with. In the interest of justice, we are therefore, hereby setting aside the matter to the file of CIT (Exemptions) for fresh consideration, after giving due opportunity of hearing to the assessee/applicant. In the result, the matter is being restored to the file of CIT (Exemptions) with directions mentioned above. I.T.A No. 263/Rjt/2019 A.Y. 2018-19 Page No Rajkot Chamber of Commerce & Industry vs. CIT (Exemption) 5 5. In the result, the appeal of the assessee/applicant is being allowed for statistical purposes. Order pronounced in the open court on 20-07-2022 Sd/- Sd/- (WASEEM AHMED) (SIDHHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad : Dated 20/07/2022 आदेश क त ल प अ े षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order, Assistant Registrar, Income Tax Appellate Tribunal, Rajkot