Sant Shree Brahmlin Manchharambapu Charitable Trust, Surat V. Commissioner of Income Tax (Exemption), Ahmedabad

ITA 300/SRT/2023

AI Insights

The case involves the Sant Shree Brahmlin Manchharambapu Charitable Trust appealing against the decision of the Commissioner of Income Tax (Exemptions), Ahmedabad, which rejected their application for registration under Section 12AB of the Income Tax Act, 1961. The primary reason for rejection was the absence of financial statements for FY 2019-20, which the CIT(E) deemed necessary to verify the genuineness of the trust's activities and their alignment with the trust's objectives. The tribunal found that the trust had provided substantial documentation but had failed to submit the required financial statements due to a lack of time. The tribunal decided to remand the case back to the CIT(E) for a fresh evaluation, allowing the trust an opportunity to submit the missing documents.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 302126 (ITAT-SURAT)
• Duration Of Justice: 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-07-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 09-07-2023
• Assessment Year: 2022-2023
• Appeal Filed On: 30-04-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DENISH MASHROOWALA
• Keywords: Charitable institution
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER ITA No. 300/SRT/2023 (AY: N/A) (Hearing in Virtual Court) Sant Shree Brahmlin Manchharambapu Charitable Trust, D102, Sanskruti Complex, Dabholi Road, Nr. Haridarshan Society, Singanpore Road, Surat-395005, Gujarat. PAN: ABATS 7121 H Vs. Commissioner of Income Tax (Exemptions), Ahmedabad. APPELLANT RESPONDEDNT Assessee by Shri Denish Mashroowala, C.A and Shri Dinesh Radadiya, Advocate. Department by Shri Ashok B. Koli (CIT-DR) Date of Institution of Appeal 01/05/2023 Date of hearing 10/07/2023 Date of pronouncement 10/07/2023 Order under Section 254(1) of Income Tax Act PER: PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by the assessee-trust is directed against the order of learned Commissioner of Income Tax, (Exemptions), Ahmedabad [in short the ld. CIT(E)] dated 20/03/2023 in rejecting the application of assessee- trust for registration under Section 12AB of the Income Tax Act, 1961 (in short, the Act). The assessee has raised following grounds of appeal: “(1) The learned CIT(Exemption) Ahmedabad has rejected application for registration U/s 12AA of Income Tax Act, 1961 on procedural ground. The applicant failed to upload the details under bonafide account for FY 2019-20.. ITA No. 300/SRT/2023 Sant Shree Brahmlin Manchharambapu Charitable Trust Vs CIT(E) 2 (2) Assessee/Trust are under impression that trust is created on 06/01/2020 so there is no financial statement for FY 2019-20 but there is its and forget to upload financial statement for FY 2019-20. (3) General notice to all applicant and very short time period for reply, no specific notice for requisite documents.” 2. Brief facts of the case are that the assessee is filed an application for registration under Section 12AB of the Act in Form 10AB in accordance with Rule 17A of the Income Tax Rules, 1962, (in short, the Rules). The assessee furnished necessary required details at the time of filing application electronically/online. On receipt of such application, the ld. CIT(E) issued notice dated 23/01/2023 and subsequently on 04/02/2023 for requiring certain details including the Form No. 10AB, certified copies of annual accounts of three years preceeding to the filing of application. The assessee filed required details alongwith accounts for 2020-21 and 2021-22. No accounts for F.Y. 2019-20 was furnished. The ld. CIT(E) on considering such details, noted that in absence of accounts for F.Y. 2019- 20, the genuinenity of activities could not be verified vis a vis object of assessee. Even the verification of object as per constitution deed activities could not be verified. The ld. CIT(E) was of the view that for granting registration under Section 12AB of the Act, he was required to specify about genuineness of activities of the trust or institution and those activities are in consonance of the object of the trust or institution, thus in absence of required details, the ld. CIT(E) rejected the application ITA No. 300/SRT/2023 Sant Shree Brahmlin Manchharambapu Charitable Trust Vs CIT(E) 3 vide impugned order dated 20/03/2023. Aggrieved by the order of ld. CIT(E), the assessee has filed present appeal before this Tribunal. 3. We have heard the submissions of learned Authorised Representative (ld. AR) of the assessee submits and the learned Commissioner of Income Tax-Departmental Representative (ld. CIT-DR) for the revenue. The ld. AR of the assessee submits that initially the assessee furnished complete details alongwith Form 10AB in accordance with Rule 17A of the Rules while filing/uploading the application for registration. The ld. CIT(E) in para 6 of the impugned order, has accepted that the assessee as a trust has uploaded copy of institutions deed alongwith details of registration with Charity Commissioner. The ld. CIT(E) also accepted that the assessee has furnished accounts for F.Y. 2020-21 and 2021-22 as recorded in para 7 of impugned order. However, the assessee could not furnish the accounts for F.Y. 2019-20 due to paucity of time. The assessee trust undertake to furnish further required details, before the ld. CIT(E) for his satisfaction for examining the genuinenity of activities in accordance with object of trust. The ld. AR of the assessee submits that they have very good case on merit and is likely to succeed, if one more opportunity is given to furnish the required details and to reconsider their application afresh. 4. On the other hand, the ld. CIT-DR for the revenue supported the order of ld. CIT(E). The ld. CIT-DR submits that the assessee has not furnished ITA No. 300/SRT/2023 Sant Shree Brahmlin Manchharambapu Charitable Trust Vs CIT(E) 4 required details and evidences qua the activities if any carried out in consonance with the object of the assessee. In absence of such information and evidence, the ld. CIT(E) rightly rejected the application of assessee for registration under Section 12AB of the Act. 5. We have considered the submissions of both the parties and have gone through the order of ld. CIT(E) carefully. We find that there is no dispute that the assessee furnished copy of trust deed/instrument of trust, details of registration with charity Commissioner and audited accounts for F.Y. 2020-21 and 2021-22. Only audited accounts for F.Y. 2019-20 was not furnished as required by ld. CIT(E). The ld. AR of the assessee submits that they were allowed very short time to make response and they are still ready to furnish required details including audited accounts for F.Y. 2019-20. Considering the fact that the assessee has raised specific grounds of appeal and made submission that they would not furnish accounts for F.Y. 2019-20 due to paucity of time, therefore, we deem it appropriate to restore the issue back to the file of ld. CIT(E) to allow the assessee to file requisite details including audited accounts for F.Y. 2019-20. Needless to direct that before deciding the application afresh, the ld. CIT(E) shall grant opportunity of hearing including to make further submission to prove the object of assessee-trust and its activities. In the result, grounds of assessee’s appeal is allowed for statistical purposes. ITA No. 300/SRT/2023 Sant Shree Brahmlin Manchharambapu Charitable Trust Vs CIT(E) 5 6. In the result, this appeal of assessee is allowed for statistical purposes only. Order pronounced on 10/07/2023 in open court. Sd/- Sd/- (Dr. ARJUN LAL SAINI) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat, Dated: 10/07/2023 *Ranjan Copy to: 1. Assessee – 2. Revenue - 3. CIT 4. DR By Order 5. Guard File Sr. Private Secretary, ITAT Surat