KRISHNA SHIKSHA SEWA SANSTHAN, ALLAHABAD V. COMMISSIONER OF INCOME TAX (EXEMPTION), LUCKNOW

ITA 33/ALLD/2020

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 8288 (ITAT-ALLAHABAD)
• Duration Of Justice: 1 year(s) 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 25-03-2021
• Assessment Year: 2019-2020
• Appeal Filed On: 12-02-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHANTANU DHAMIJA
• Assessee Lawyers: S K JAISWAL
• Keywords: Principle of natural justice; Competent authority; Set aside
• Section: 12A; 12AA; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ALLAHABAD BENCH , ALLAHABAD [ THROUGH VIRTUAL COURT ] BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER I . T . A . NO . 33 /ALLD/20 20 ASSESSMENT YEAR: 20 19 - 20 KRISHNA SHIKSHA SEWA SANSTHAN, JAMUA, MEJA, ALLAHABAD - 212302 V S . THE COMMISSIONER OF INCOME TAX (EXEMPTION), 5 TH FLOOR, SOUTH BLOCK, T.C./46V, U.P.S.D.C. LTD., VIBHUTI KHAND, GOMTI NAGAR, LUCKNOW - 226010 PAN: AADAK3109Q (APPELLANT) (RESPONDENT) APPELLANT BY SHRI S.K. JAISWAL, CA RESPONDENT BY SHRI SHANTANU DHAMIJA, CIT DR DATE OF HEARING 25 /03 /2021 DATE OF PRONOUNCEMENT 26 /03 / 2021 O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 30.01.2020 OF CIT (EXEMPTION ) PASSED U/S 12AA (1) (B)(II) OF THE INCOME TAX ACT, WHEREBY THE APPLICATION OF THE ASSESSEE FOR REGISTRATION U/S 12A OF THE INCOME TAX ACT WAS REJECTED. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: - 1. BECAUSE THE LEARNED COMMISSIONER OF INCOME TAX (EXEMPTION) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT ACTIVITIES OF THE APPELLANT REMAINS UNVERIFIED, THEREFORE THE APPLICANT LOOSES ITS ELIGIBILITY FOR REGISTRATION UNDER SECTION 12AA(1)(B)(II) OF THE INC OME TAX ACT, 1961. ITA NO. 33/ALLD/2020 2 2. BECAUSE THE LEARNED COMMISSIONER OF INCOME TAX (EXEMPTION) FAILS TO APPRECIATE THE FACT THAT APPLICANT SOCIETY IS DOING ITS CHARITABLE ACTIVITIES IN THE RURAL AND REMOTE AREA AND FURNISHED THE COMPLETE DETAILS OF SERVICE RENDERED TO T HE SOCIETY, THE FINDING TO THE CONTRARY IS BASED ON CONJECTURE AND SURMISES AND NOT ON THE BASIS OF ANY MATERIAL ON RECORD. 3. BECAUSE THE ORDER APPEALED AGAINST IS CONTRARY TO THE FACTS, LAW AND PRINCIPLE OF NATURAL JUSTICE. 3. THE LD. AR OF THE ASSES SEE HAS SUBMITTED THAT THE ASSESSEE HAS FILED THE APPLICATION IN FORM NO. 10A ON 15.07.2019. HOWEVER, THE COMMISSIONER (EXEMPTION) HAS ISSUED NOTICE TO THE ASSESSEE FOR GIVING AN OPPORTUNITY OF HEARING ON 2 ND JANUARY 2020. IN RESPONSE TO THE SAID NOTICE, T HE ASSESSEE FILED AN APPLICATION FOR SEEKING ADJOURNMENT OF HEARING WHICH WAS RE - FIXED TO 23.01.2020. HE HAS POINTED OUT THAT ON THE DATE OF HEARING ON 23.01.2020, HE APPEARED BEFORE THE CIT (EXEMPTION) AND FILED BOOKS OF ACCOUNT AND OTHER DETAILS. THE LD. CIT (EXEMPTION) VIDE ORDER SHEET DATED 23.01.2020 HAS ASKE D THE ASSESSEE TO SUBMIT THE DETAILS OF DONATIONS RECEIVED IN THE F.Y. 2017 - 18 & 2016 - 17. IN COMPLIANCE TO THE SAID DIRECTIONS, THE ASSESSEE FILED THE WRITTEN SUBMISSIONS ALONG WITH DETAILS OF THE DONATIONS AND CONFIRMATIONS OF THE LOCAL DONORS ON 24.01.20 20 ITSELF. HE HAS REFERRED TO THE WRITTEN SUBMISSIONS AS WELL AS THE DETAILS FILED BY THE ASSESSEE ON 24.01.2020 AND SUBMITTED THAT DUE TO PAUCITY OF TIME, THE ASSESSEE COULD NOT OBTAIN THE CONFIRMATION FROM OUTSIDE DONORS. THE LD. AR HAS THUS CONTENDED TH AT THE OBSERVATIONS OF THE COMMISSIONER (EXEMPTION) THAT THE ASSESSEE DID NOT SUBMIT ANY CONFIRMATION OF DONATION IS CONTRARY TO THE RECORD . F URTHER, THE COMMISSIONER HAS ALSO GIVEN THE REASONS FOR REJECTING THE APPLICATION THAT THE ASSESSEE HAS NOT FILED ANY EVIDENCE IN SUPPORT OF THE CLAIM THAT IT HAS ORGANIZED MEDICAL CAMP FOR PROVIDING THE MEDICAL FACILITIES AND SUPPORTING BILLS OF EXPENDITURE TO SUBSTANTIATE THE ACTIVITY CARRIED OUT BY THE ASSESSEE TO ATTAIN THE OBJECTS OF ITA NO. 33/ALLD/2020 3 THE ASSESSEE TRUST. THE LD. A R HAS SUBMITTED THAT THE COMMISSIONER (EXEMPTION) NEVER ASKED THE ASSESSEE TO SUBMIT THOSE DETAILS OR BILLS AS WELL AS PHOTOGRAPHS . E VEN OTHERWISE PHOTOGRAPHS FOR ORGANIZING THE MEDICAL CAMP IS NOT REQUIRED. THUS, THE LD. AR HAS CONTENDED THAT THE ASSESSEE HAS FURNISHED RELEVANT PARTICULARS AS WELL AS DOCUMENTARY EVIDENCE IN SUPPORT OF THE DONATIONS AND ALSO FILED THE BOOKS OF ACCOUNT SHOWING ALL THE DETAILS OF THE EXPENDITURE INCURRED BY THE ASSESSEE WHICH IS DULY AUDITED. HE HAS THUS PLEADED THAT THE IMPU GNED ORDER MAY BE SET ASIDE AND THE COMMISSIONER MAY BE DIRECT ED TO GRANT THE REGISTRATION U/S 12A OF THE INCOME TAX ACT. 4. ON THE OTHER HAND, THE LD. CIT DR HAS SUBMITTED THAT THE CIT (EXEMPTION) HAS GIVEN VARIOUS REASONS FOR REJECTING THE APPLICATION A ND THE ABSENCE OF THE CONFIRMATION IS ONLY ONE PART OF THE REASONS AND NOT THE SOLE BASIS OF REJECTION. HE HAS REFERRED TO PARA 2 AND 3 OF THE IMPUGNED ORDER AND SUBMITTED THAT APART FROM THE NON FURNISHING OF THE CONFIRMATION T HE COMMISSIONER (EXEMPTION) HAS OBSERVED THAT THE ASSESSEE SOCIETY STATED TO HAVE PROVIDED MEDICAL SERVICES TO THE POOR IN THE RURAL AREAS BY ORGANIZING MEDICAL CAMP AND RUNNING MEDICAL CLINIC H OWEVE R, IN SUPPORT OF THE SAID CLAIM THE ASSESSEE HAS NOT SUBM ITTED OR PRODUCED ANY EVIDENCE LIKE PLACE OF CAMP, DATE OF CAMP, BENEFICIARY OF CAMP ETC. NOR THE ASSESSEE HAS PROVIDED ANY PHOTOGRAPHS, BILLS OF EXPENDITURE TO SUBSTANTIATE THE CLAIM OF ACTIVITY AS CLAIMED BY THE ASSESSEE. THUS, THE ASSESSEE HAS FAILED TO PROVIDE THE MATERIAL TO CORROBORATE TH E CHARITABLE NATURE OF OBJECTS AND GENUINENESS OF THE ACTIVITY. HE HAS RELIED UPON THE IMPUGNED ORDER OF THE COMMISSIONER (EXEMPTION). 5 . WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON R ECORD. WE HAVE ALSO CAREFULLY PERUSED THE IMPUGNED ORDER PASSED BY THE COMMISSIONER (EXEMPTION) AND NOTED THAT VIDE ORDER SHEET ENTRY DATED 23.01.2020 , THE ASSESSEE WAS ASKED TO SUBMIT THE CONFIRMATION OF DONATIONS . I N RESPONSE TO THAT THE ASSESSEE SUBMITT ED THE CONFIRMATION FOR ITA NO. 33/ALLD/2020 4 THE FINANCIAL YEAR 2018 - 19 OF 4 PERSONS OUT OF 13 PERSONS FROM WHOM DONATIONS WERE RECEIVED BY THE ASSESSEE SOCIETY. FURTHER, TWO OF THE 4 PERSONS ARE MEMBERS OF THE SOCIETY. THE COMMISSIONER (EXEMPTION) THUS OBSERVED THAT THE DONAT IONS TO THE TUNE OF RS. 2,94,000/ - REMAIN UNVERIFIED. SIMILARLY, FOR THE F.Y. 2017 - 18, THE COMMISSIONER (EXEMPTION) OBSERVED THAT THE ASSESSEE DID NOT SUBMIT ANY CONFIRMATION OF DONATIONS. THE ASSESSEE HAS EXPLAINED THAT THE CONFIRMATION OF THE LOCAL DONOR S WERE SUBMITTED ALONG WITH WRITTEN SUBMISSION ON 24.01.2020 AND DUE TO THE PAUCITY OF TIME THE ASSESSEE COULD NOT FURNISHED THE CONFIRMATION OF THE OUTSIDE DONATIONS. IT IS APPARENT THAT THE ASSESSEE HAS FURNISHED THE WRITTEN SUBMISSION AND THE CONFIRMATI ON OF THE LOCAL DONORS ON THE VERY NEXT DATE WHEN THE COMMISSIONER ASKED THE ASSESSEE TO SUBMIT THE CONFIRMATION OF DONATIONS . S INCE THE ORDER WAS ALSO PASSED ON 30.01.2020 T HEREFORE, THE TIME CONSTRAINTS FOR TAKING THE CONFIRMATION OF DONATIONS FROM OUTSIDE DONORS CANNOT BE RULED OUT. APART FROM INCOMPLETE CONFIRMATION, THE COMMISSIONER HAS ALSO MADE OBSERVATIONS OF LACK OF DOCUMENTARY EVIDENCE TO SUPPORT THE ACTIVITY OF PROVIDING MEDICAL SERVICES TO THE POOR IN THE RURAL AREAS AS CLAIM ED BY THE ASSESSEE AND THE EXPENDITURE BOOKED IN THE INCOME AND EXPENDITURE ACCOUNT IS NOT SUPPORTED BY THE BILLS AND OTHER DOCUMENTARY EVIDENCE. THEREFORE, THE COMMISSIONER (EXEMPTION) HAS BASICALLY RAISED TWO OBJECTIONS : (I) INCOMPLETE CONFIRMATION OF DO NATIONS AND (II) NON FURNISHING OF BILLS IN SUPPORT OF THE EXPENDITURE AS WELL AS THE EVIDENCE TO PROVE THAT THE ASSESSEE HAS ACTUALLY CARRIED THE MEDICAL SERVICES TO THE POOR BY ORGANIZING MEDICAL CAMPS AND RUNNING MEDICAL CLINICS. THERE IS NO QUARREL ON THE POINT THAT WHILE GRANTING THE REGISTRATION U/S 12A THE COMPETENT AUTHORITY (COMMISSIONER) IS REQUIRED TO SATISFY HIMSELF ABOUT THE CHARITABLE NATURE OF THE OBJECTS OF THE TRUST/INSTITUTIONS AND GENUINENESS OF THE ACTIVITIES. SO FAR AS THE CHARITABLE NA TURE OF THE OBJECTS OF TH E ASSESSEE SOCIETY IS CONCERNED, T HE CIT (EXEMPTION) HAS NOT DOUBTED THE CHARITABLE NATURE OF THE OBJECTS WHICH ARE DULY STATED IN THE MEMORANDUM ITA NO. 33/ALLD/2020 5 AND RULES OF THE SOCIETY AND AVAILABLE WITH THE COMMISSIONER (EXEMPTION). THE ONLY PR ECONDITION WHICH THE ASSESSEE WAS REQUIRED TO SATISFY THE COMMISSIONER (EXEMPTION) IS THE GENUINENESS OF THE ACTIVITY TO ACHIEVE THE OBJECTS OF THE ASSESSEE SOCIETY. SO FAR AS THE CONFIRMATION OF THE DONATIONS ARE CONCERNED SINCE THE ASSESSEE HAS EXPLAINED THE CAUSE OF INCOMPLETE CONFIRMATION AS TIME CONSTRAINS T HEREFORE, WE FIND THAT THE ASSESSEE OUGHT TO HAVE BEEN GRANTED SUFFICIENT TIME FOR SUBMITTING THE CONFIRMATION OF DONATIONS. THE SECOND OBJECTION IS REGARDING THE GENUINENESS OF THE ACTIVITIES AND P ROOF OF PROVIDING THE MEDICAL SERVICES TO THE POOR BY ORGANIZING MEDICAL CAMP RUNNING MEDICAL CLINICS. THOUGH, THE COMMISSIONER (EXEMPTION) HAS OBSERVED THAT THE SAID CLAIM I S NOT SUPPORTED BY THE EVIDENCE H OWEVER, WE FIND FORCE IN THE CONTENTION OF THE AS SESSEE THAT THE ASSESSEE WAS NOT SPECIFICALLY ASKED BY THE COMMISSIONER TO PRODUCE SUCH EVIDENCE. ACCORDINGLY, IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN THE INTEREST OF JUSTICE, WE SET ASIDE THE IMPUGNED ORDER OF THE COMMISSIONER (EXEMPTION) AND RE MIT THE MATTER TO THE RECORD OF THE COMMISSIONER (EXEMPTION) FOR DECIDING THE SAME AFRESH AFTER GIVING ONE MORE OPPORTUNITY TO THE ASSESSEE TO SUBMIT THE COMPLETE CONFIRMATION OF DONATIONS AS WELL AS OTHER DOCUMENTARY EVIDENCE IN SUPPORT OF CARRYING OUT TH E ACTIVITIES OF PROVIDING MEDICAL SERVICES TO THE POOR IN THE RURAL AREAS. THE ASSESSEE IS DIRECTED TO PRODUCE THE COMPLETE CONFIRMATION OF DONATIONS AS DESIRED BY THE COMMISSIONER (E) AND ALSO PRODUCE THE DOCUMENTARY EVIDENCE IN SUPPORT OF THE MEDICAL SERVICES PROVIDED TO THE POOR AND THE RURAL AREAS. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 6 . ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH MARCH, 2021. SD/ - SD/ - ( RAMIT KOCHAR ) (VIJAY PAL RAO) A CCOUNTANT M EMBER JUDICIAL MEMBER ITA NO. 33/ALLD/2020 6 ALLAHABAD DATED: 26 /0 3 /2021 A.K., PS COPY FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE DR, I.T.A.T. 6. GUARD FILE BY ORDER (I.T.A.T., ALLAHABAD) TRUE COPY