Adhar NPA Plus Bahuddeshiya Sanstha, Amaravati V. Commissioner of Income tax-III, Nagpur

ITA 341/NAG/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1726 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 11 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 30-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KANE
• Keywords: Opportunity of being heard
• Section: 12A; 12AA

Judgement Text

1 ITA NO. 341/NAG/2013. IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. I.T.A. NO. 341/NAG/2013 ADHAR NAP PLUS BAHUDDESHIYA SANSTHA, COMMISSIONER OF SANJAY PAWAR COMPLEX, RADHA NA GAR, V/S. INCOME TAX - III, AMRAVATI - 444603. NAGPUR. PAN AABAA0839R. APPELLANT. RESPONDENT. APPELLANT BY : SHRI KAPIL HIRANI. RESPONDENT BY : SHRI NARENDRA KANE. DATE OF HEARING : 28 - 07 - 2015 DATE OF PRONOUNCEMENT : 21 ST AUGUST, 2015 O R D E R PER SHAMIM YAHYA, A.M. . THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX - III, NAGPUR DATED 28 - 06 - 2013 AND PERTAINS TO REJECTION OF APPLICATION FOR GRANT OF REGISTRATION UNDER SECTION 12A. 2. IN THIS CASE THE LEARNED CIT HAS REJECTED THE ASSESSEES APPLICATION FOR REGISTRATION UNDER SECTION 12A OF I.T. ACT BY OBSERVING AS UNDER : IN RESPONSE TO THE SAME SHRI C.K. INGLE, C.A. AUTHORIZED REPRESENTATIVE OF THE APPLICANT ATTENDE D AND PRODUCED DETAILS CALLED FOR. WHILE GOING THROUGH THE BOOKS IT IS SEEN THAT ONE OF THE STAFF OF THE TRUST, 2 ITA NO. 341/NAG/2013. WHO IS ALSO THE PRESIDENT OF THE TRUST SMT. VIDYA VILAS TAYADE IS PAID REMUNERATION ON MONTHLY BASIS FROM THE TRUST. THUS THE TRUST DID NOT FULFIL THE CONDITION OF SEC. 131(1)(C) . THE AUTHORIZED REPRESENTATIVE WAS ASKED TO EXPLAIN THE SAME. IN REPLY TO THIS QUERY THE COUNSEL FILED A REPLY VIDE LETTER NO. NIL DATED 13.06.2013. AS PER PARA 4 OF THE REPLY, THE COUNSEL STATED THAT THAT TH E MRS. VIDYA TAYADE IS WORKING AS A PROGRAMME COORDINATOR FOR THE SOCIETY. THE AMOUNT PAID TO HER IS ` .10,000/ - P.M. AS CONSOLIDATED PAYMENT SO AS TO REIMBURSE HER THE OUT OF POCKET EXPENSES TO CARRY OUT THE ACTIVITY. THIS REGULAR PAYMENT OF ` .10,000/ - P.M. TO SMT. VIDYA VILAS TAYADE WAS JUSTIFIED AS ABOVE. THE NATURE OF PAYMENT MADE TO SMT. VIDYA VILAS TAYADE, PRESIDENT OF THE TRUST IS FOUND TO BE ON MONTHLY BASIS AND AS SUCH IT CANNOT BE SAID TO BE REIMBURSEMENT OF OUT - OF - POCKET EXPEN SES. THE APPLICANT HAS THUS CONTRAVENED THE PROVISIONS OF SEC. 13(1)(C) OF THE I.T. ACT, 1961. IN VIEW OF THE ABOVE, THE APPLICATION FILED BY THE APPLICANT TRUST, SEEKING REGISTRATION U/S. 12A OF THE INCOME TAX ACT, 1961, IS HEREBY REJECTED. 3. AGAIN ST THE ABOVE ORDER THE ASSESSEE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT LEARNED CIT HAS ERRED IN REJECTING THE APPLICATION FOR REGISTRATION UNDER SECTION 12A BY INVOK ING THE PROVISIONS OF SECTION 13(1). HE CONTENDED THAT POWERS OF CIT (EXEMPTION) WHEN AN APPLICATION IS RECEIVED FOR REGISTRATION UNDER SECTION 12A IS LIMITED TO THE PRESCRIPTION OF SECTION 12AA OF THE I.T. ACT. HE SUBMITTED THAT SECTION 12AA EMPOWERS T HE LEARNED CIT TO MAKE ENQUIRY WITH A VIEW TO SATISFY HIMSELF ABOUT THE GENUINENESS , ABOUT OBJECTS AND ACTIVITIES OF THE TRUST. IN THIS REGARD HE REFERRED TO THE CASE LAW FROM ITAT, DELHI BENCH A IN THE CASE OF AGGARWAL MITRA MANDAL TRUST V/S. DIRECTOR O F INCOME TAX (EXEMPTION) WHEREBY DENIAL OF REGISTRATION TO THE ASSESSEE ON THE GROUND OF VIOLATION OF PROVISIONS OF SECTION 13(1)(B) WAS SET ASIDE. FOR SIMILAR PROPOSITION LEARNED COUNSEL REFERRED T HE FOLLOWING CASE LAWS : 3 ITA NO. 341/NAG/2013. 1. ASHOKA EDUCATIONAL TRUST V/ S. CIT (2014) 42 CCH 90 (PUNE) 2. SAINT KABIR EDUCATIONAL TRUST V/S. CIT (2010) 41 DTR 267 (AMRITSAR). 3. SWARGIYA JAGANNATH JATTEWAR SHIKSHAN SANSTHA V/S. CIT (2013) 155 TTJ (NAGPUR) 104. 5. PER CONTRA LEARNED D.R. SUBMITTED THAT THE MATTER MAY BE SET ASIDE TO THE FILE OF THE LEARNED CIT TO EXAMINE THE APPLICATION WITH RESPECT TO THE AIMS AND OBJECTS OF THE TRUST AND DECIDE AFRESH. 6. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS AND PERUSED THE RECORDS. WE FIND THAT THE INVOCATION OF LEARNED CIT OF THE PROVISIONS OF SECTION 13(1)(B) WHILE CONSIDERING THE APPLICATION FOR REGISTRATION UNDER SECTION 12A IS NOT SUSTAINABLE AS THE SAME IS BEYOND THE PRESCRIPTION OF SECTION 12AA OF THE I.T. ACT. WE MAY GAINFULLY REFER HEREUNDER THE PROVISIONS OF SECTION 12AA: . 12AA. (1) THE [ PRINCIPAL COMMISSIONER OR ] COMMISSIONER, ON RECEIPT OF AN APPLICATION FOR REGISTRATION OF A TRUST OR INSTITUTION MADE UNDER CLAUSE ( A ) [OR CLAUSE ( AA ) OF SUB - SECTION (1)] OF SECTION 12A , SHALL ( A ) CALL FOR SUCH DOCUMENTS OR INFORMATION FROM THE TRUST OR INSTITUTION AS HE THINKS NECESSARY IN ORDER TO SATISFY HIMSELF ABOUT THE GENUINENESS OF ACTIVITIES OF THE TRUST OR INSTITUTION AND MAY ALSO MAKE SUCH INQUIRIES AS HE MAY DEEM NECESSARY IN THIS BEHALF; AND ( B ) AFTER SATISFYING HIMSELF ABOUT THE OBJECTS OF THE TRUST OR INSTITUTION AND THE GENUINENESS OF ITS ACTIVITIES, HE ( I ) SHALL PAS S AN ORDER IN WRITING REGISTERING THE TRUST 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 APPLICANT : PROVIDED THAT NO ORDER UNDER SUB - CLAUSE ( II ) SHALL BE PASSED UNLESS THE APPLICANT HAS BEEN GIVEN A REASONABLE OPPORTUNITY OF BEING HEARD. 4 ITA NO. 341/NAG/2013. THE ABOVE MAKES IT CLEAR THAT SECTION 12AA PROVIDES THAT WHEN AN APPLICATION IS RECEIVED FOR REGISTRATION OF A TRUST OR INSTITUTION UNDER SECTION 12A THE COMMISSIONER OF INCOME TAX HAS TO SATISFY H I MSELF ABOUT THE GENUINENESS OF ACTIVITIES O F THE TRUST AND AFTER SATISFYING HIMSELF ABOUT THE OBJECTS OF THE TRUST, HE HAS TO PASS AN ORDER. THUS THE ENQUIRY BY THE COMMISSIONER OF INCOME TAX IN THIS REGARD IS WITH RESPECT TO SATISFY HIMSELF ABOUT THE GENUINENESS OF THE ACTIVITIES AND OBJECTS OF THE TRUST AS EXPOUNDED BY THE ITAT, DELHI BENCH IN THE CASE OF AGGARWAL MITRA MANDAL TRUST (SUPRA). APPLICATION OF SECTION 13 FALLS WITHIN THE EXCLUSIVE DOMAIN OF THE ASSESSING OFFICER AND THE PROVISIONS CONTAINED THEREIN CAN BE INVOKED BY HIM WHILE FRAMING THE ASSESSMENT AND NOT BY THE CIT WHILE CONSIDERING THE APPLICATION FOR REGISTRATION UNDER SECTION 12AA. 7. NO CONTRARY DECISION HAS BEEN PRODUCED BEF ORE US BY THE R EVENUE. FURTHER MORE WE NOTE THAT THE LEARNED CIT HAS NOT MENTIONED ANYTHING ABOUT ANY ENQUIRY AND RESULTS OBTAINED EXCEPT FOR THE FACT THAT ` .10,000/ - IS BEING PAID AS CONSOLIDATED PAYMENT SO AS TO REIMBURSE THE PRESIDENT OF THE TRUST FOR H ER OUT OF POCKET EXPENSES TO CARRY OUT THE ACTIVITIES. LEARNED COUNSEL OF THE ASSESSEE HAS STRONGLY DISPUTED THE FINDING OF THE LEARNED CIT ON MERITS ALSO. HE HAS CLAIMED THAT NO BENEFIT OR PERQUISITE IS BEING EXTENDED TO THE PRESIDENT. THE TRUST ENGAGED I N DISSEMINATING AIDS AWARENESS PROGRAMME IN REMOTE AND FAR FLUNG AREAS. FOR THIS, MRS. VIDYA TAYADE, PRESIDENT, HAS TO INCUR TRAVELLING EXPENSES OUT OF HER OWN POCKET WHICH IS BEING REIMBURSED. 8. WE HAVE CONSIDERED THE ABOVE SUBMISSIONS. IN OUR CONSI DERED OPINION AS HELD BY THE ITAT IN THE CASE OF AGGARWAL MITRA MANDAL TRUST (SUPRA), ADJUDICATION OF THIS ASPECT IS NOT RELEVANT AT THIS JUNCTURE. HENCE WE ARE NOT ENGAGING INTO THE SAME. CLEARLY THE ORDER OF LEARNED CIT IS NOT AT ALL SUSTAINABLE AND IS LIABLE TO BE SET ASIDE. HOWEVER, WE NOTE THAT THE LEARNED D.R. HAS PLEADED 5 ITA NO. 341/NAG/2013. THAT THE MATTER MAY BE REMITTED TO THE FILE OF LEARNED CIT TO ENABLE HIM TO EXAMINE THE AIMS AND OBJECTS OF THE TRUST TO EXAMINE THE APPLICATION PROPERLY UNDER SECTION 12A OF THE I.T. ACT. IN THE INTEREST OF JUSTICE WE ACCEPT THIS REQUEST OF LEARNED D.R.. ACCORDINGLY THE ISSUE IS REMITTED TO THE FILE OF LEARNED CIT TO EXAMINE THE APPLICATION OF REGISTRATION UNDER SECTION 12A AFRESH AS PER THE PROVISIONS OF LAW. LEARNED CIT SHALL KEEP IN MIND OUR OBSERVATIONS AND THE CASE LAWS AS CITED ABOVE. 9 . IN THE RESULT, THIS APPEAL FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 21 ST DAY OF AUGUST, 2015. SD/ - SD/ - (MUKUL K. SHRAWAT) ( SHAMIM YAHYA) JUDICIAL MEMBER ACC OUNTANT MEMBER. NAGPUR, DATED: 2 1 S T AUGUST, 2015. COPY OF ORDER FORWARDED TO : 1. THE ASSESSEE. 2. REVENUE. 3. THE CIT(A) 4. THE CIT, NAGPUR. 5. THE D.R., ITAT, NAGPUR. 6. GUARD FILE. TRUE COPY. BY ORDER WAKODE ASSISTANT REGISTRAR, ITAT, NAGPUR