Gawar Foundation, Haryana V. CIT(E), Chandigarh

ITA 3477/DEL/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3334 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 03-05-2017
• Assessment Year: misc
• Appeal Filed On: 29-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S K JAIN; VINOD GARG S
• Keywords: Charitable institution; Opportunity of being heard
• Section: 12AA; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 3477/DEL/2015 A.Y. : ------- GAWAR FOUNDATION THROUGH : S.K. JAIN, ADVOCATE, 696/8, GANGA BAGH, HANSI 125033 (HARYANA) (PAN: AACTG1482C) VS. COMMISSIONER OF INCOME TAX (EXEMPTIONS), CR BUILDING, 4 TH FLOOR, SECTOR-17-E, CHANDIGARH (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. S.K. JAIN & SH. VINOD GARG, ADVOCATES DEPARTMENT BY : SH. N.K. BANSAL, SR. DR ORDER PER H.S. SIDHU, JM THE ASSESSEE HAS FILED THIS APPEAL AGAINST THE IMPUGNED ORDER DATED 07/5/2015 PASSED BY THE LD. COMMISSIONER OF INCOME TAX(EXEMPTIONS), CHANDIGARH. 2. THE GROUNDS RAISED IN ITA NO. 3477/DEL/2015 RE AD AS UNDER:- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND UNDER LAW ACTION OF LD. CIT(E) IN REFUSING REGISTRA TION UNDER S. 12A(1)(AA) OF INCOME TAX ACT, 1961 IS ARBITRARY, ERRONEOUS, UNWARRANTED AND ILLEGAL AND MUST BE QUAS HED WITH DIRECTION FOR RELIEF. 2 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND UNDER LAW LD. CIT(E) FELL IN ERROR IN REFUSING REGI STRATION UNDER SECTION 12A(1)(AA) OF THE ACT ON INVALID FOOTINGS A ND ERRONEOUS CONSIDERATIONS AS REASONS POINTED OUT FOR REJECTION ARE NOT VALID AND AS SUCH LEGALLY THE IMPUGNED ORD ER DESERVES TO BE SET ASIDE. 3. THAT LD. CIT(A) IS NOT JUSTIFIED IN REFUSING REG ISTRATION UNDER SECTION 12A(1)(AA) OF THE ACT AS THE IMPUGNED ORDER DATED 7.5.2015 IS BASED ON SURMISES AND CONJECTURES AND O N WHIMSICAL GROUNDS AND IRRELEVANT CONSIDERATIONS. 4. THAT LD. CIT(E) HAS NOT SPECIFIED IN IMPUGNED OR DER DATED 7.5.2015, CONDITION OF S. 12AA(1)(B)(II) OF THE AC T BEING NOT SATISFIED LEADING TO REFUSING REGISTRATION UNDER SE CTION 12A(1)(AA) OF THE ACT AND AS SUCH ORDER IS LIABLE T O BE SET ASIDE. 5. THAT LD. CIT(E) ERRED IN REFUSING REGISTRATION U NDER SECTION 12A(1)(AA) OF THE ACT BECAUSE APPELLANT TRUST APPLI ED INCOME FOR GIVING DONATION TO ANOTHER ESTABLISHED CHARITA BLE ORGANIZATION, THE FINDING IS AGAINST LAW RECOGNIZED BY VARIOUS HONBLE HIGH COURTS AND AS SUCH ORDER IS LIABLE TO BE SET ASIDE. THAT APPELLANT ASSESSEE CRAVES LEAVE TO ADD INTO A ND / OR ALTER, AMEND, SUBSTITUTE, MODIFY OR WITHDRAW ANY OF THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. 3. THE FACTS IN BRIEF ARE THAT AN APPLICATION FOR G RANT OF APPROVAL U/S. 12AA IN FORM NO. 10A WAS FILED BY THE APPLICANT ON 14.11.2014 BEFORE THE LD. CIT(E), HISAR, WHICH WAS LATER TRANSFERRED DUE TO CHANGE OF JURISDICTION TO THE LD. CIT(E), CHANDIGARH. THE APP LICANT TRUST WAS 3 CREATED ON 27.8.2014 AND THE SAME WAS REGISTERED WI TH SUB REGISTRAR, HISAR ON 27.8.2014. A PERUSAL OF THE TRUST DEED OF THE APPLICANT SHOWS THAT IN CLAUSE 17 OF THE TRUST DEED, IT HAS BEEN ST ATED THAT ALL FUNDS, SURPLUS AND INCOME OF THIS TRUST SHALL BE KEPT IN B ANKS AND THE BANK ACCOUNTS OF THIS TRUST. WHEREAS THERE IS NO SUCH CL AUSE IN THE TRUST DEED THAT THE APPLICANT TRUST SHALL INVEST IN THE MODES SPECIFIED IN SUB-SECTION 5 OF SECTION 11 OF THE INCOME TAX ACT. AS PER PROVI SIONS OF SECTION 11(2) OF THE INCOME TAX ACT, THE APPLICANT WAS REQUIRED T O INVEST OR DEPOSIT ANY MONEY OR SUM ACCUMULATED OR SET APART IN THE SPECIF IED MODES AS PROVIDED UNDER SUB-SECTION (5) OF SECTION 11 OF THE INCOME TA ACT. BEFORE THE LD. CIT(E) THE APPLICANT TRUST HAS SUBMI TTED THAT IN CLAUSE 24 OF THE TRUST DEED THE TRUSTEES UNANIMOUSLY SHALL HA VE THE POWER TO DISSOLVE THE TRUST IN CASE IF IT IS SO DEEMED EXPED IENT AND NECESSARY AND IN SUCH EVENTUALITY, THE ASSETS REMAINING ON THE DA TE OF DISSOLUTION OF THIS TRUST SHALL UNDER NO CIRCUMSTANCES BE DISTRIBUTED A MONG THE TRUSTEES, BUT THE SAME SHALL BE TRANSFERRED TO ANOTHER PUBLIC CHARITABLE ORGANIZATION WHETHER REGISTERED OR UNREGISTERED. T HERE IS NO SUCH CLAUSE IN THE TRUST DEED THAT THE ASSETS AND PROPERTIES OF THE TRUST SHALL BE CONSIDERED FOR TRANSFER TO ANY OTHER SOCIETY / TRUS T WITH IDENTICAL AIMS AND OBJECTS. THE LD. CIT(E) OBSERVED THAT ON PERUSAL O F THE INCOME & EXPENDITURE ACCOUNT OF THE APPLICANT TRUST SHOWS TH AT THE MAIN EXPENDITURE WAS INCURRED BY THE APPLICANT BY WAY OF DONATION TO ANOTHER TRUST NAMELY SHRI KRISHAN PARNAMI MANAV SEWA TRUST, HISAR, HOWEVER, THE APPLICANT TRUST HIMSELF HAS NOT MADE ANY SUCH E XPENDITURE FOR A 4 CHARITABLE PURPOSE, WHICH IS COVERED U/S. 2(15) OF THE INCOME TAX ACT, THEREFORE, THE APPLICANT WAS NOT QUALIFIED FOR EXE MPTION U/S. 12AA OF THE INCOME TAX ACT, HENCE, THE APPLICATION FOR REGISTR ATION U/S. 12AA WAS REJECTED BY THE LD. CIT(E) VIDE HIS ORDER DATED 7.5 .2015. 4. AGGRIEVED WITH THE IMPUGNED ORDER DATED 7.5.201 5 PASSED BY THE LD. CIT(E), ASSESSEE IS IN APPEAL BEFORE THE TRIBUN AL. 5. AT THE TIME OF HEARING, LD. A.R. OF THE ASSESSE E HAS FILED A PAPER BOOK CONTAINING PAGES 1 TO 67 HAVING THE COPY OF FO RM NO. 10A DATED 14.11.2014 SUBMITTED IN O/O CIT, HISAR, REGD. TRUST DEED NO. 6349 DATED 29.8.2014, NOTES ON ACTIVITIES, INCOME AND EX PENDITURE ACCOUNT FROM 27.8.2014 TO 14.11.2014 AND BALANCE SHEET AS O N 14.11.2014; PROVISIONAL INCOME AND EXPENDITURE ACCOUNT FROM 27. 8.2014 TO 31.3.2015 AND BALANCE SHEET AS ON 31.3.2015; REGISTRATION CER TIFICATE UNDER SECTION 34(3) OF JUVENILE JUSTICE (CARE & PROTECTION OF CHI LDREN) ACT, 2000 IN THE NAME OF SHRI KRISHAN PRANAMI BAL SEWA ASHRAM, HISAR ; THANKS LETTER DATED 11.11.2014; PARTYWISE DETAILS OF EXPENDITURE DURING 27.8.2014 TO 31.3.2015; BANK ACCOUNT NO. OF ASSESSEE WITH OBC, HISAR FROM 22.10.2014 TO 6.4.2015; LETTER OF ITO(E), ROHTAK DA TED 16.4.2015; LETTER TO ITO(E), ROHTAK DATED 22.4.2015; LETTER OF CIT(E) , CHANDIGARH DATED 12.3.2015; LETTER TO CIT(E), CHANDIGARH DATED 2.4.2 015; DETAILS OF VOLUNTARY CONTRIBUTIONS RECEIVED BY ASSESSE RS. 37 LACS; CONFORMATION OF GAWAR CONSTRUCTION LTD., GURGAON REGARDING DONATION OF RS. 37 LACS DURING 22.10.2014 TO 31.3.2015; DETAILS OF INTER TR UST DONATIONS MADE IN 5 KIND TO SH. KRISHAN PRANAMI BAL SEWA ASHRAM, HISAR AT RS. 32,79,951/- AS PER INCOME AND EXPENDITURE ACCOUNT; ITR-7 OF ASS ESSMENT YEAR 2015- 16; ACK. DATED 31.8.2015 OF AY 2015-16; ITR-7 OF AY 2016-17 AND ACK. NO DATED 2.8.2016 OF AY 2016-17. LD. COUNSEL OF THE ASSESSEE ALSO CERTIFIED THAT THE ABOVE DOCUMENTS ARE ON RECORD OF THE RESPONDENT AND INCOME TAX OFFICER (EXEMPTIONS) AND NO NEW EVIDENC E IS ADDUCED. HE FURTHER STATED THAT LD.CIT(E) HAS NOT CONSIDERED TH E VITAL AND LEGALLY TENABLE DOCUMENTARY EVIDENCES TENDERED, AS AFORESAI D AND PASSED A NON- SPEAKING ORDER AND CONTENTION RAISED DURING THE PRO CEEDINGS BEFORE THE LD. CIT(E), WHICH GOES TO THE ROOT OF THE MATTER A ND ARE VERY ESSENTIAL TO ADJUDICATE THE ISSUE IN DISPUTE. IN VIEW OF THE ABO VE, HE REQUESTED THAT THE ISSUE INVOLVED IN THE PRESENT APPEAL MAY BE SET ASIDE TO THE FILE OF THE LD.CIT(A) TO DECIDE THE SAME AFRESH UNDER THE LAW, AFTER CONSIDERING ALL THE DOCUMENTS AND GIVE ADEQUATE OPPORTUNITY OF BEI NG HEARD TO THE ASSESSEE TO SUBSTANTIATE HIS CASE. 6. ON THE CONTRARY, LD. DR OPPOSED THE REQUEST OF T HE LD. COUNSEL OF THE ASSESSEE AND RELIED UPON THE ORDERS OF THE AUTH ORITIES BELOW. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS. WE HAVE GONE THROUGH THE ORDER PASSED BY THE REVENUE AUTHOR ITIES ESPECIALLY THE IMPUGNED ORDER AS WELL AS THE PAPER BOOK CONTAINING PAGES 1 TO 67 HAVING THE COPY OF FORM NO. 10A DATED 14.11.2014 SU BMITTED IN O/O CIT, HISAR, REGD. TRUST DEED NO. 6349 DATED 29.8.2014, N OTES ON ACTIVITIES, INCOME AND EXPENDITURE ACCOUNT FROM 27.8.2014 TO 14 .11.2014 AND 6 BALANCE SHEET AS ON 14.11.2014; PROVISIONAL INCOME AND EXPENDITURE ACCOUNT FROM 27.8.2014 TO 31.3.2015 AND BALANCE SHE ET AS ON 31.3.2015; REGISTRATION CERTIFICATE UNDER SECTION 34(3) OF JUV ENILE JUSTICE (CARE & PROTECTION OF CHILDREN) ACT, 2000 IN THE NAME OF SH RI KRISHAN PRANAMI BAL SEWA ASHRAM, HISAR; THANKS LETTER DATED 11.11.2014; PARTYWISE DETAILS OF EXPENDITURE DURING 27.8.2014 TO 31.3.2015; BANK ACC OUNT NO. OF ASSESSEE WITH OBC, HISAR FROM 22.10.2014 TO 6.4.20 15; LETTER OF ITO(E), ROHTAK DATED 16.4.2015; LETTER TO ITO(E), ROHTAK DA TED 22.4.2015; LETTER OF CIT(E), CHANDIGARH DATED 12.3.2015; LETTER TO CI T(E), CHANDIGARH DATED 2.4.2015; DETAILS OF VOLUNTARY CONTRIBUTIONS RECEIVED BY ASSESSE RS. 37 LACS; CONFORMATION OF GAWAR CONSTRUCTION LTD ., GURGAON REGARDING DONATION OF RS. 37 LACS DURING 22.10.2014 TO 31.3.2 015; DETAILS OF INTER TRUST DONATIONS MADE IN KIND TO SH. KRISHAN PRANAM I BAL SEWA ASHRAM, HISAR AT RS. 32,79,951/- AS PER INCOME AND EXPENDIT URE ACCOUNT; ITR-7 OF ASSESSMENT YEAR 2015-16; ACK. DATED 31.8.2015 OF AY 2015-16; ITR-7 OF AY 2016-17 AND ACK. NO DATED 2.8.2016 OF AY 2016-17 . LD. COUNSEL OF THE ASSESSEE ALSO CERTIFIED THAT THE ABOVE DOCUMENT S ARE ON RECORD OF THE RESPONDENT AND INCOME TAX OFFICER (EXEMPTIONS) AND NO NEW EVIDENCE IS ADDUCED. IN VIEW OF THE ABOVE, WE ARE OF THE VIE W THAT LD.CIT(E) HAS NOT CONSIDERED THE VITAL AND LEGALLY TENABLE DOCUME NTARY EVIDENCES TENDERED, AS AFORESAID AND PASSED A NON-SPEAKING OR DER AND CONTENTION RAISED DURING THE PROCEEDINGS BEFORE THE LD. CIT(E) , WHICH GOES TO THE ROOT OF THE MATTER AND ARE VERY ESSENTIAL TO ADJUDI CATE THE ISSUE IN DISPUTE. THEREFORE, IN THE INTEREST OF JUSTICE, THE ISSUE INVOLVED IN THE 7 PRESENT APPEAL REQUIRES FRESH ADJUDICATION BY THE L D.CIT(E), AS PER LAW, AFTER CONSIDERING ALL THE DOCUMENTS AND GIVE ADEQU ATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE TO SUBSTANTIATE HIS CAS E. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ISSU E IN DISPUTE IS SET ASIDE AND RESTORED BACK TO THE FILE OF THE LD.CIT(E) TO C ONSIDER THE ISSUE IN DISPUTE AFRESH AFTER GIVING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND ALSO CONSIDER ALL THE DOCUMENTS AVAILA BLE WITH THE ASSESSEE. THE ASSESSEE IS ALSO DIRECTED TO SUBMIT ALL THE NEC ESSARY DOCUMENTS BEFORE THE LD.CIT(E) TO SUBSTANTIATE HIS CASE AND F ULLY COOPERATE WITH THE LD.CIT(E) DURING THE PROCEEDINGS. IN THE RESULT, T HE APPEAL OF THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, THE ASSESSEES APPEAL STANDS ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 09/05/2017. SD/- SD/- (PRASHANT MAHARISHI) [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 09/05/2017 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES