Shine Educational and Social Welfare Trust, CHENNAI V. CIT, Trichy

ITA 2778/CHNY/2014

• Counselvise Citation: 277821714 RSA 2014
• Duration Of Justice: 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 24-02-2015
• Assessment Year: misc
• Appeal Filed On: 10-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRADMOD NANGIA IRS
• Assessee Lawyers: J PRABHAKAR
• Keywords: Charitable institution; Cancellation of registration
• Section: 12AA; 12; 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . , . . , ! BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER & SHRI S.S. GODARA, JUDICIAL MEMBER ./ I.T.A. NO.2778/MDS/2014 M/S. SHINE EDUCATIONAL AND SOCIAL WELFARE TRUST, AADHAVAN ARTS AND SCIENCE COLLEGE CAMPUS, ALATHUR, MANAPARAI 621 307. [PAN: AAITS 2956D] ( '# /APPELLANT) VS THE COMMISSIONER OF INCOME TAX-I, TIRUCHIRAPPALLI. ( $%'# /RESPONDENT) / APPELLANT BY : SHRI. J. PRABHAKAR, C.A / RESPONDENT BY : SHRI. PRADMOD NANGIA, IRS, CIT. /DATE OF HEARING : 24.02.2015. /DATE OF PRONOUNCEMENT : 27.02.2015. & / O R D E R PER S.S. GODARA, JUDICIAL MEMBER THIS ASSESSEES APPEAL EMANATES FRO M ORDER DATED 24.09.2014 PASSED BY THE COMMISSIONER OF INCOME TAX -I, I.T.A.NO.2778/MDS/2014 :- 2 -: TIRUCHIRAPALLI, IN C.NO. 6162E/CIT-I/TRY/2014-15, CANCELLING REGISTRATION U/S. 12AA(3) OF THE INCOME TAX ACT, 1 961 [IN SHORT THE ACT]. 2. FACTS OF THE CASE ARE IN A NARROW COMPASS. THE AS SESSEE IS A REGISTERED TRUST U/S. 12AA SINCE 07.06.2010. THERE IS NO DISPUTE ABOUT ITS OBJECTIVE BEING COVERED BY THE CHARITABLE PURPO SE EDUCATION. THE CIT APPEARS TO HAVE ISSUED A NOTICE FOR CANCELLING ITS REGISTRATION FOR NON FILING OF RETURN. HIS ORDER IS SILENT ON THE DATE OF NOTICE. THE ASSESSEE DOES NOT SEEM TO HAVE APPEARED. THE CIT H AS CANCELLED ITS REGISTRATION AS UNDER:- M/S. SHINE EDUCATIONAL AND SOCIAL WELFARE TRUST HA S BEEN GRANTED REGISTRATION U/S. 12AA OF THE INCOME-TAX ACT, 1961 VIDE THIS OFFICE C. NO.6162E(82)/2009-10/CIT-I/TRY DATED 07.06.2010. A S PER SECTION 139(4A) OF THE INCOME-TAX ACT, THE TRUST HAS TO FIL E ITS RETURN OF INCOME, IF THE TOTAL INCOME WITHOUT GIVING EFFECT T O PROVISIONS OF SECTION 11 & 12 EXCEEDS THE MAXIMUM AMOUNT WHICH IS NOT CHARGEABLE TO TAX. IT IS FOUND FROM THE DETAILS AV AILABLE WITH THE DEPARTMENT, THAT THE TRUST HAS NOT FILED ITS RETURN OF INCOME TILL DATE FROM THE GRANT OF REGISTRATION. HENCE A SHOW CAUSE LETTER CITED UNDER REFERENCE 2 A BOVE WAS ISSUED BY THE UNDERSIGNED TO THE ABOVE TRUST REQUIRING TO STATE THE REASONS FOR NON FILING RETURN OF INCOME OF THE TRUST. FURT HER, THE TRUST WAS ALSO REQUESTED TO FILE THE RECEIPTS & PAYMENTS AND INCOME AND EXPENDITURE STATEMENT ACCOUNT AND BALANCE SHEET FOR ALL AYS FOR WHICH RETURNS OF INCOME WERE NOT FILED UPTO AY 2014 -15 BEFORE 15.09.2014. IT IS ALSO MENTIONED IN THAT LETTER TH AT, IN CASE NO REPLY IS RECEIVED AND NO INFORMATION IS FURNISHED BY THE TRUST WITHIN THE DATE MENTIONED, IT WOULD BE PRESUMED THAT TRUST DOE S NOT HAVE ANY OBJECTION FOR WITHDRAWING THE GRANT OF REGISTRATION U/S. 12AA OF THE INCOME-TAX ACT, 1961. I.T.A.NO.2778/MDS/2014 :- 3 -: THE ABOVE LETTER HAS BEEN SENT THROUGH REGISTERED P OST TO THE ADDRESS WHICH WAS GIVEN, WHILE MAKING APPLICATION R EQUESTING FOR GRANT OF REGISTRATION. HOWEVER, THE LETTER WAS RET URNED UNSERVED WITH THE NO SUCH ADDRESSEE, RETURN TO SENDER. THEREFORE IT IS INFERRED THAT THE TRUST IS NOT IN E XISTENCE. AS PER SECTION 12AA(3) OF THE I.T. ACT, WHERE A TRUST OR A N INSTITUTION HAS BEEN GRANTED REGISTRATION UNDER CLAUSE (B) OF SUB S ECTION (1) AND SUBSEQUENTLY, THE COMMISSIONER IF SATISFIED THAT TH E ACTIVITIES OF SUCH TRUST OR INSTITUTION ARE NOT GENUINE OR ARE NOT BEI NG CARRIED OUT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST OR INSTITU TION, AS THE CASE MAY BE, COMMISSIONER OF INCOME TAX SHALL PASS AN OR DER IN WRITING, CANCELLING THE REGISTRATION OF SUCH TRUST OR INSTIT UTION. ACCORDINGLY, THE TRUST HAS TO PROVE THAT THE CHARIT ABLE ACTIVITIES FOR WHICH THE TRUST/INSTITUTION/SOCIETY WAS FORMED ARE GENUINELY CARRIED OUT AND THEREFORE, BASED ON THE FACTS AND CIRCUMSTA NCES OF THE CASE, IT IS CONSTRUED THAT THE TRUST IS NOT EXISTING. THE REFORE, THERE IS NO POINT IN ALLOWING TO CONTINUE THE REGISTRATION GRAN TED U/S. 12AA OF THE I.T. ACT. HENCE, THE REGISTRATION U/S. 12AA OF THE I.T. ACT, 1961 GRANTED TO THE TRUST IS HEREBY CANCELLED. THIS LEAVES THE ASSESSEE AGGRIEVED. 3. WE HAVE HEARD BOTH SIDES AND PERUSED THE CASE FILE . THE CITS ORDER HAS BEEN PASSED EX-PARTE. THE ASSESSEE SUBMI TS NOT TO HAVE RECEIVED THE CITS NOTICE PROPOSING CANCELLATION OF REGISTRATION. HE HAS PROCEEDED TO CANCEL ITS REGISTRATION FOR NON FILING OF RETURN. A PERUSAL OF SECTION 12AA (3) MAKES IT CLEAR THAT SUCH A POWER CAN BE EXERCISED ONLY IF THE CONCERNED CHARITABLE TRUSTS OR INSTIT UTIONS ACTIVITIES NOT GENUINE OR ARE NOT BEEN CARRIED OUT IN ACCORDANCE W ITH ITS OBJECTS AS THE CASE MAY BE. NEEDLESS TO SAY, NON FILING OF A RETURN DOES NOT FIND A MENTION AS A CAUSE FOR CANCELLATION OF SECTION 12AA REGISTRATION. I.T.A.NO.2778/MDS/2014 :- 4 -: WE MAKE IT CLEAR THAT WE ARE DEALING WITH A TAX STA TUE WHEREIN THE POWERS OF THE REVENUE HAVE TO BE LITERALLY INTERPRE TED. THE REVENUE FAILS TO QUOTE ANY CASE LAW WIDENING SCOPE OF SECT ION 12AA(3) IN FACTS OF THE CASE. THEREFORE, WE REJECT THE ASSESSEES TECHNICAL ARGUMENT OF NON SERVICE OF NOTICE AND REVERSE THE CITS ORDE R ON THIS LEGAL ASPECT ITSELF. 4. THE ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED ON FRIDAY, THE 27 TH OF FEBRUARY, 2015, AT CHENNAI. SD/- SD/- ( . ) (A.MOHAN ALANKAMONY) / ACCOUNTANT MEMBER ( . . ) (S.S. GODARA) / JUDICIAL MEMBER ! /CHENNAI. '# /DATED:27.02.2015. KV #$ %&' (' /COPY TO: 1. ) APPELLANT 2. / RESPONDENT 3. * ( )/CIT(A) 4. * /CIT 5. '+ , %%-. /DR 6. , /0 1 /GF. I.T.A.NO.2778/MDS/2014 :- 5 -: