Sh. Seth Vinod Kumar Somani Charitable Trust, Bathinda V. The Commissioner of Income Tax(Exemptions), Chandigarh

ITA 286/ASR/2015

• Counselvise Citation: [2016] 128 COUNSELVISE.COM (IT) 9755 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 27-07-2016
• Assessment Year: 2015-2016
• Appeal Filed On: 05-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution; Opportunity of being heard
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH. A.D.JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A NO.286(ASR)/2015 ASSESSMENT YEAR: 2015-16 SETH KUMAR SOMANI CHARITABLE TRUST, 14, NEW SHAKTI NAGAR, BATHINDA. PAN:AAOTS5900M VS. CIT (EXEMPTION), CHANDIGARH. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. J.K. GUPTA (ADV.) RESPONDENT BY: SH. RAHUL DHAWAN (DR.) DATE OF HEARING: 27.07.2016 DATE OF PRONO UNCEMENT: 01.08.2016 ORDER PER T. S. KAPOOR (AM): THIS IS AN APPEAL FILED BY ASSESSEE AGAINST THE ORD ER OF LEARNED CIT (EXEMPTION), PASSED U/S 12AA OF THE ACT, FOR ASST. YEAR: 2015-16. 2. THE ASSESSEE IS AGGRIEVED WITH THE ORDER PAS SED BY LEARNED CIT (EXEMPTION) AS HE HAS REFUSED TO GRANT REGISTRATION U/S 12AA OF THE ACT. 3. THE LEARNED DR HAD FILED AN APPLICATION FOR ADJO URNMENT BUT KEEPING IN VIEW THE MATERIAL ON RECORD WE DEEMED IT APPROPRIATE TO PROCEED WITH THE MATTER AND THEREFORE, THE APPLICAT ION FOR ADJOURNMENT WAS REJECTED AND LEARNED AR WAS DIRECTED TO PROCEED WITH HIS ARGUMENTS. 4. AT THE OUTSET, TSHE LEARNED AR STATED THAT HE W ILL NOT BE PRESSING GROUND NO.5, THEREFORE, THE SAME MAY BE DISMISSED A S NOT PRESSED. ITA NO.286 (ASR)/2015 ASST. YEA R: 2015-16 2 5. THE LEARNED AR SUBMITTED THAT LEARNED CIT(EXEMP TION) HAS NOT GRANTED THE REGISTRATION HOLDING THAT NO CHARITABLE ACTIVITY WAS UNDER TAKEN BY THE ASSESSEE, WHEREAS THE FACT REMAINS THA T ASSESSEE HAD GRANTED SCHOLARSHIP TO A GIRL STUDENT AND IN THIS R ESPECT OUR ATTENTION WAS INVITED TO (PB PAGE-11) WHERE A COPY OF RECEIPT GIVEN BY STUDENT OF HAVING RECEIVED THE SCHOLARSHIP WAS PLACED. THEREF ORE, IT WAS SUBMITTED THAT THE LEARNED CIT (EXEMPTION)S FINDING THAT THE ASSESSEE HAD NOT CARRIED OUT ANY CHARITABLE ACTIVITY IS NOT CORRECT. 6. WITHOUT PREJUDICE IT WAS SUBMITTED THAT AT THE T IME OF REGISTRATION THE LEARNED CIT IS REQUIRED ONLY TO EXAMINE THE OBJ ECTS OF THE ASSESSEE WHICH IN THE PRESENT CASE ARE CHARITABLE IN NATURE AS IS APPARENT FROM THE COPY OF TRUST DEED PLACED AT (PB PAGE-1TO 8) IT WAS FURTHER SUBMITTED THAT IN THE NEXT YEAR, THE LEARNED CIT(A) HAS GRANT ED REGISTRATION VIDE ORDER DATED 30.11.2015 AND FILED A COPY OF THE ORDE R. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, IT WAS SUBMITTED THAT ORDE R MAY BE PASSED GRANTING REGISTRATION TO THE ASSESSEE IN THE YEAR U NDER CONSIDERATION. 7. THE LEARNED DR, HOWEVER, SUPPORTED THE ORDER OF CIT(EXEMPTION) AND STATED THAT NO CHARITABLE ACTIVITY WAS UNDERTAK EN BY THE ASSESSEE AND EVIDENCE OF ANY CHARITABLE ACTIVITY WAS NOT FIL ED BEFORE THE LEARNED CIT(EXEMPTION). 8. WE HAVE HEARD THE RIVAL PARTIES AND GONE THROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT THE TRUST WAS CREATE D VIDE TRUST DEED ITA NO.286 (ASR)/2015 ASST. YEA R: 2015-16 3 DATED 26 SEP. 2014 AND THE OBJECTS OF THE TRUST DEE D OF THE SOCIETY ARE CHARITABLE IN NATURE. AT THE TIME OF GRANTING REGIS TRATION TO AN ASSESSEE THE LEARNED CIT (EXEMPTION) HAS TO ONLY EXAMINE THE OBJECTS FOR WHICH THE SOCIETY HAS BEEN REGISTERED. THE PROVISIONS OF SECTION 12AA REGARDING REGISTRATION ARE VERY CLEAR IN THIS RESPECT WHICH F OR THE SAKE OF CONVENIENCE ARE REPRODUCED BELOW. 12AA (1) THE [***] COMMISSIONER, ON RECEIPT OF AN APPLI CATION FOR REGISTRATION OF A TRUST OR INSTITUTION MADE UNDER C LAUSE (A) [OR CLAUSE (AA) OF SUB-SECTION (1)] OF SECTION 12A, SHALL- (A) CALL FOR SUCH DOCUMENTS OR INFORMATION FROM THE TRU ST OR INSTITUTION AS HE THINKS NECESSARY IN ORDER TO SATI SFY HIMSELF ABOUT THE GENUINENESS OF ACTIVITIES OF THE TRUST OR INSTI TUTION AND MAY ALSO MAKE SUCH INQUIRIES AS HE MAY DEEM NECESSARY I N THIS BEHALF; AND (B) AFTER SATISFYING HIMSELF ABOUT THE OBJECTS OF THE T RUST OR INSTITUTION AND THE GENUINENESS OF ITS ACTIVITIES, HE (I) SHALL PASS AN ORDER IN WRITING REGISTERING THE TRUS T OR INSTITUTION; (II) SHALL, IF HE IS NOT SO SATISFIED, PASS AN ORDER IN WRITING REFUSING TO REGISTER THE TRUST OR INSTITUTION, AND A COPY OF SUCH ORDER SHALL BE SENT TO THE APPLI CANT: PROVIDED THAT NO ORDER UNDER SUB-CLAUSE (II) SHALL BE PASSE D UNLESS THE APPLICANT HAS BEEN GIVEN A REASONABLE OPPORTUNITY O F BEING HEARD. [(1A) ALL APPLICATIONS, PENDING BEFORE THE CHIEF CO MMISSIONER ON WHICH NO ORDER HAS BEEN PASSED UNDER CLAUSE (B) OF SUB-SE CTION (1) BEFORE THE 1 ST DAY OF JUNE, 1999, SHALL STAND TRANSFERRED ON THAT DAY TO THE COMMISSIONER AND THE COMMISSIONER MAY PROCEED WITH SUCH APPLICATIONS UNDER THAT SUB-SECTION FROM THE STAGE AT WHICH THEY WERE ON THAT DAY.] (2) EVERY ORDER GRANTING OR REFUSING REGISTRATION U NDER CLAUSE (B) OF SUB- SECTION (1) SHALL BE PASSED BEFORE THE EXPIRY OF SI X MONTHS FROM THE END OF THE MONTH IN WHICH THE APPLICATION WAS RECEIVED UNDER CLAUSE (A) [OR CLAUSE 9AA) OF SUB-SECTION (1)] OF SECTION 12A] [(3) WHERE A TRUST OR AN INSTITUTION HAS BEEN GRANT ED REGISTRATION UNDER CLAUSE (B) OF SUB-SECTION (1) SUBSEQUENTLY THE COMM ISSIONER IS SATISFIED THAT THE ACTIVITIES OF SUCH TRUST OR INSTITUTION AR E NOT GENUINE OR ARE NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECTS OF THE TRUST OR INSTITUTION, AS THE CASE MAY BE, HE SHALL PASS AN O RDER IN WRITING CANCELING THE REGISTRATION OF SUCH TRUST OR INSTITU TION ITA NO.286 (ASR)/2015 ASST. YEA R: 2015-16 4 PROVIDED THAT NO ORDER UNDER THIS SUB-SECTION SHALL BE PASSE D UNLESS SUCH TRUST OR INSTITUTION HAS BEEN GIVEN A REASONAB LE OPPORTUNITY OF BEING HEARD.] THE ABOVE PROVISIONS CLEARLY STATES THAT AT THE TIM E OF REGISTRATION THE COMMISSIONER HAS TO SATISFY HIMSELF ABOUT THE OBJEC TS OF TRUST, AND GENUINENESS OF ITS ACTIVITIES. 9. MOREOVER, WE FIND THAT IN THE NEXT YEAR THE LEAR NED CIT(EXEMPTION) ON THE BASIS OF SAME TRUST DEED HAS ALLOWED REGISTR ATION TO THE ASSESSEE, THEREFORE, REFUSAL TO GRANT REGISTRATION IN THE PRE SENT YEAR IS NOT JUSTIFIED. THEREFORE, WE DIRECT THE CIT(EXEMPTION) TO GRANT RE GISTRATION TO THE ASSESSEE U/S 12AA OF THE ACT. 10. IN VIEW OF THE ABOVE, THE APPEAL FILED BY ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 01 .08.2016. SD/- SD/- (A.D. JAIN) (T. S. KAPOOR) JUDICIAL MEMBER ACCOUNTAN T MEMBER DATED: 01.08.2016. /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER