Smt. Keshiben Amrutlal Valani and Shethshri Laherchandbhai Charitable Trust, Banaskantha V. The CIT(Exemption), Ahmedabad

ITA 357/AHD/2023

• Counselvise Citation: [2023] 101 COUNSELVISE.COM (IT) 9764 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 27-11-2023
• Assessment Year: misc
• Appeal Filed On: 10-05-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MEHUL H
• Keywords: Charitable institution; Opportunity of being heard; Set aside
• Section: 80G; 64

Judgement Text

आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरणआयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण, अहमदाबाद 瀈यायपीठ अहमदाबाद 瀈यायपीठअहमदाबाद 瀈यायपीठ अहमदाबाद 瀈यायपीठ ‘D’ अहमदाबाद। अहमदाबाद।अहमदाबाद। अहमदाबाद। IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, AHMEDABAD ] ] BEFORE SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER AND SHRI T.R. SENTHIL KUMAR, JUDICIAL MEMBER ITA Nos.357&358/Ahd/2023 Assessment Year: N.A. Smt. Keshiben Amrutlal Valani and Shetshri Laherchandbhai Charitable Trust, BLE Trust Shah Dineshkuma Amrutlal Akoli Kankrej, Banaskantha, Gujarat-385550 Vs Commissioner of Income Tax (Exemption), Ahmedabad [PAN No. :AAVTS5633C] अपीलाथ / (Appellant) यथ / (Respondent) Appellant by : Shri H. V. Doshi & Shri Mehul H. Doshi, A.R. Respondent by : Dr. Darsi Suman Ratnam, CIT DR स ु नवाई क तार ख/Date of Hearing: 28.11.2023 घोषणा क तार ख /Date of Pronouncement: 30.11.2023 आदेश/O R D E R PER T.R. SENTHIL KUMAR, JUDICIAL MEMBER: These appeals are filed by the assessee as against rejection of registration under Section 12AB and 80G of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) vide separate orders dated 19.03.2023 and 20.03.2023 passed by Commissioner of Income Tax (Exemption), Ahmedabad. ITA No. 358/Ahd/2023 (Denial of Registration u/s. 12AB) 2. The brief facts of the case is that the assessee is a Trust registered under Bombay Public Trust Act for the object of charitable purposes, education, medical, relief to poor and saving ITA Nos.357&358/Ahd/2023 A.Y. N.A. 2 and maintaining life of animals. The assessee Trust filed its application for registration under Section 12AB of the Act on 28.09.2022 in Form No. 10AB r.w.r. 17A on the Income Tax Rules. The Ld. CIT(E) issued a notice dated 08.12.2022 through ITBA portal asking the assessee Trust to furnish detailed note on the activity actually carried out by the Trust as well as the details and documents mentioned therein. The assessee replied to the show- cause notice vide its reply dated 26.12.2022. Another notice was issued by CIT(E) on 30.12.2023 wherein it is stated that partial details were submitted by the assessee, therefore, the assessee was given one more opportunity to comply with the earlier show-cause notice and submit the required documents of order on or before 06.01.2023. In case of non-compliance / part compliance of the said notice, the matter will be decided on the basis of the available material on record. However, the second show-cause notice was not particular about which are the deficit documents i.e. required by the Ld. CIT(E). Therefore, the assessee filed the earlier acknowledgement and details filed before Ld. CIT(E). The Ld. CIT(E) vide his impugned order dated 19.03.2023 rejected the registration under Section 12AB of the Act observing as follows:- “8. The details filed by the applicant are peripheral and the response is cryptic in nature. As discussed above, the applicant/assessee has not submitted, apart from others the crucial information/documents with respect to its accounts. The Rule 17A(2) of Income Tax Rules requires the applicant/assessee to attach with the Form No. 10AB filed, self certified copies of its annual accounts of three years for which such accounts have been made up, preceding the year in which the said application is made or from its inception, whichever period is less. As per details available on records, it is observed that the date of incorporation/creation/registration of applicant/assessee trust is 30/09/2016. However, the applicant/assessee has filed its accounts for FY 2018-19, 2020-21 & 2021-22 and out of the above referred three years, the applicant/assessee has not submitted its accounts for FY 2019-20. It's not the case that the applicant/assessee has been incorporated/created/ registered in the current financial year and for which no accounts have been made up till date. ITA Nos.357&358/Ahd/2023 A.Y. N.A. 3 9. In spite of specific requisitions, the applicant/assessee has not submitted the requisite details. Therefore, no verification of the objects as per the constitution/deed with the activities could be carried out. Thus, the genuineness of the activities does not get established, due to non compliance by the applicant/assessee. Section 12AB makes, it very clear that before granting registration under this section, the Commissioner has to satisfy himself about the genuineness of the activities of the trust or institution and also he has to verify that these activities are in consonance with the objects of the trust or institution. Further, he has to ensure that other laws material for the purpose of achieving objects are complied with.” 2.1 Thus Ld. CIT(E) held that he is unable to arrive at the satisfaction of the genuineness of the activities of the assessee Trust, thereby registration u/s. 12AB was rejected. 3. Aggrieved against the same, the assessee is in appeal before us raising the following Grounds of Appeal: 1. On the facts and in circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Exemption) has erred in rejecting application for registration u/s 12AB of the Act. 2. On the facts and in circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Exemption) has not provided reasonable opportunity of being heard as provided under Second Proviso to Section 12AB (1)(b)(ii)(B) of the Act. 3. On the facts and in circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Exemption) has hurriedly rejected the claim of assessee without pointing out deficiency of non- availability of audit report on record and even not given opportunity for submitting audit report for Financial Year-2019-20 which was available with the appellant turst. 4. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal.” 4. Ld. Counsel Shri H.V. Doshi & Shri Mehal H. Doshi appearing for the assessee submitted before us a Paper Book running to 64 pages which contains the Form 10AB with attachments filed before Ld. CIT(E) and first notice issued by Ld. CIT(E), reply filed by the assessee Trust, Copy of the final show cause notice dated 02-01- 2023 without mentioning specific details required by Ld. CIT(E). Thus, Ld. Counsel submitted that the Ld. CIT(E) vide his second ITA Nos.357&358/Ahd/2023 A.Y. N.A. 4 notice dated 02-01-2023 did not raise any specific deficient document from the assessee Trust, but rejected assessee’s registration application. The Assessee Trust was of the bona fide belief that the details already submitted is sufficient compliance and thereby Ld. CIT(E) has not given proper opportunity to the assessee to confront the details of required to him. Thus the Ld. Counsel pleaded one more opportunity be given to the assessee before Ld. CIT(E), so that the assessee undertake to file all the requisite details, documents and evidences in support of the case, for grant of registration under section 12AB of the Act. 5. Per contra, the Ld. CIT-DR Dr. Darsi Suman Ratnam appearing for the Revenue submitted that Ld. CIT(E) as per section 12AB of the Act, has to conduct an enquiry about the activities of the Trust and to verify the objects as per the Trust Deed and genuineness of the activities of the trust and after satisfying the activities carried out by the assessee, the Ld. CIT(E) can grant registration u/s. 12AB of the Act. Though the Ld. CIT(E) provided opportunities to the assessee as per the statutory provision, the assessee failed to submit the complete details and therefore the rejection of Registration by Ld. CIT(E) is valid in law. Therefore the order passed by Ld. CIT(E) does not require any interference and the appeal filed by the assessee is liable to be dismissed. 6. We have given our thoughtful consideration and perused the materials available on record. As against the hearing notice, the assessee filed its reply vide letter dated 08-12-2022 vide Annexures- A to H. It is seen from the second show cause notice by the Ld. CIT(E), there is no specific requirement about the deficit of documents or records filed by the assessee trust. In the absence of the same, the Ld. CIT(E) could not have rejected the application on ITA Nos.357&358/Ahd/2023 A.Y. N.A. 5 the ground that the Assessee Trust has not submitted its accounts for the Financial Year 2019-20, consequently denying the registration u/s. 12AB of the Act. We find that Ld. CIT(E) has not indicated exact deficiency in the documents submitted by the assessee and exact nature of clarification, explanation required from the assessee, but rejected the registration application without confronting the issue and issuing show-cause notice to the assessee Trust, when the assessee was given provisional registration by CIT(E) vide order dated 10.03.2022. The assessee ought to have been vigilant enough in making all the required details while making its Application of Registration. 7. Therefore considering the facts and circumstances of the case, in order to prevent miscarriage of justice, we find it fit and proper to provide one more opportunity of being heard to the assessee in support of its case for registration of the trust u/s. 12AB of the Act. Therefore we dispose of this appeal by restoring this issue to the file of the Ld. CIT(E) with a direction upon him to provide further opportunity of being heard to the assessee and consider the documents, evidences which the assessee would file as per the notice issued by the Ld. CIT(E). Upon considering the entire set of documents and upon affording an opportunity of being heard to the assessee, the Ld. CIT(E) to dispose of the application for grant of registration of the Trust under Section 12AB of the Act with a speaking order. Needless to say if the assessee fails to co-operate with the Ld. CIT(E) as directed hereinabove, the Ld. CIT(E) would be at liberty to pass orders strictly in accordance with law. 8. In the result, the appeal filed by the Assessee is hereby allowed for statistical purposes. ITA Nos.357&358/Ahd/2023 A.Y. N.A. 6 ITA No. 357/Ahd/2023 (Denial of Registration u/s. 80G) 9. In this case, registration of the assessee trust u/s. 80G(5) was rejected since registration u/s. 12AB was already rejected by the Ld. CIT(E). As we have already set aside the registration of the assessee trust u/s. 12AB, back to the file of the Ld. CIT(E) vide order in ITA No. 359/Ahd/2023, following the same, this appeal is also set aside back to the file of Ld. CIT(E) and decide the case on merits by giving one more opportunity of hearing to the assessee. 10. In the result, both the appeals filed by the Assessee are allowed for statistical purposes. Order pronounced in the Court on 30.11.2023 at Ahmedabad. Sd/- Sd/- (ANNAPURNA GUPTA) ACCOUNTANT MEMBER (T.R. SENTHIL KUMAR) JUDICIAL MEMBER Ahmedabad, dated 30/11/2023 Tanmay, Sr. P.S. TRUE COPY आदेश क त ल प अ े षत/Copy of the Order forwarded to : 1. अपीलाथ! / The Appellant 2. "यथ! / The Respondent. 3. संबं&धत आयकर आय ु (त / Concerned CIT 4. आयकर आय ु (त)अपील (/ The CIT(A)- 5. वभागीय त न&ध ,आयकर अपील य अ&धकरण,राजोकट/DR,ITAT, Ahmedabad, 6. गाड1 फाईल /Guard file. आदेशान ु सार/ BY ORDER, सहायक पंजीकार (Asstt. Registrar) आयकर अपील य अ&धकरण, ITAT, Ahmedabad