Modern Education Society , BADNERA V. CIT.(Exemption), PUNE

ITA 357/NAG/2019

AI Insights

The appeals by Modern Education Society and Agrawal Seva Samiti Paratwada were against the orders of the Commissioner of Income Tax (Exemption), Pune, which had denied their applications for registration under section 12AA of the Income Tax Act, 1961. The primary reason for the denial was the failure of the appellants to provide sufficient evidence to prove the genuineness of their charitable activities. The Tribunal, considering the welfare nature of the Income Tax laws and the constitutional directive principles, decided to remand the cases for a fresh examination, allowing the appellants another opportunity to present their case.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 136368 (ITAT-NAGPUR)
• Duration Of Justice: 3 year(s) 9 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 28-08-2023
• Assessment Year: misc
• Appeal Filed On: 12-11-2019
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAILASH KANOJIA LD.
• Assessee Lawyers: NOTICE DT WAS
• Section: 80G; 12A; 12AA

Judgement Text

॥आयकरअपीलीय न्यायाधिकरण, नागपुर न्यायपीठ, नागपुर में॥ ITAT-Nagpur Page 1 of 6 IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI G. D. PADMAHSHALI, ACCOUNTANT MEMBER (Through Virtual Hearing from Pune) आयकर अपील सं. / ITA No.357/PUN/2019 Modern Education Society, C/o. Pawan Nagar, Navi Basti, Badnera Dist-Amravati, Amravati – 444 701. PAN: AACTT6288M . . . . . . .अपीलाथी / Appellant बनाम / V/s The Commissioner of Income Tax (Exemption), Pune . . . . . . . प्रत्यथी / Respondent आयकर अपील सं. / ITA No.375/PUN/2019 Agrawal Seva Samiti Paratwada, Akola Rd.,Partwada Dist-Amravati, Paratwada – 488 206. PAN: AADTA5413G . . . . . . .अपीलाथी / Appellant बनाम / V/s The Commissioner of Income Tax (Exemption), Pune . . . . . . . प्रत्यथी / Respondent द्वारा / Appearances Assessee by : None for 357, Mr R B Atal for 375 Revenue by : Shri Kailash Kanojia [‘Ld. DR’] सुनवाई की तारीख / Date of conclusive Hearing : 29/08/2023 घोषणा की तारीख / Date of Pronouncement : 01/09/2023 Modern Education Society ITA No. 357/NAG/2019 & Agrawal Seva Samiti ,Paratwada, ITA No. 375/NAG/2019 ITAT-Nagpur Page 2 of 6 आदेश / ORDER PER G. D. PADMAHSHALI; Both these appeals are directed against separate orders of the Commissioner of Income Tax (Exemption), Pune [‘CIT(E)’] passed u/s 12AA(1) of the Income-tax Act, 1961 [‘the Act’] vide DIN & order No. ITBA/EXM/S/EXM1/2019-20/1018509401(1) dt. 30/09/2019 & ITBA/EXM/S/EXM1/2019-20/1019599135(1) dt. 31/10/2019. 2. Despite service of notice, none appeared on behalf of assessee, in the larger interest of justice we proceeded to adjudicate issue ex-parte u/r 24 of ITAT- Rules, 1963 with able assistance from the Revenue. 3. During the course of hearing, a common threadbare issue in both these appeals came to the attention, for the reason, two appeals are taken up together for the sake of brevity and for a common & consolidated order. We first deal with ITA No. 357/NAG/2019 as lead case, resultantly, our adjudication laid in subsequent paragraphs shall mutatis-mutandis apply to ITA No. 375/NAG/2019. Modern Education Society ITA No. 357/NAG/2019 & Agrawal Seva Samiti ,Paratwada, ITA No. 375/NAG/2019 ITAT-Nagpur Page 3 of 6 4. ITA No.357/NAG/2019 Brief facts in this case are that, the appellant vide Form No.10A dt. 31/03/2019 made an application to the respondent under clause (iii) of section 12A of the Act thereby sought regular/final registration u/s 12A of the Act. The Ld. CIT(E) noted that the applicant trust while running educational institutes has accumulated surplus over past few years, however failed to file its return of income and further necessary details showcasing utilization of such accumulated of surplus towards its objects, in event it the genuineness of activities failed to established by positive satisfaction. Resultantly by the impugned order the Ld. CIT(E) for his failure to arrive at positive satisfaction about genuineness of activities of the assessee in the absence of evidences. 5. ITA No.375/NAG/2019 In this case also the assessee has made an online application in Form No.10A for approval of the Trust / Institution under section 12AA of the Income Tax Act, 1961 on 24/04/2019 under the category of charitable trust / institution. In order the vouch the genuineness Modern Education Society ITA No. 357/NAG/2019 & Agrawal Seva Samiti ,Paratwada, ITA No. 375/NAG/2019 ITAT-Nagpur Page 4 of 6 of activities the appellant by notice dt 15/05/2019 was called upon to furnish certain information/clarification. The applicant has claimed to have carried out activities such as educational, medical and financial aid to needy and poor people, engaged in creating awareness and promoting blood donation camps, eye donation camps etc. However, the applicant failed to prove genuineness of such activities if at all undertaken by adducing credible supporting evidence, for the reason the application by the impugned order was came rejected by the Ld. CIT(E). 6. At the virtual hearing, Ld. DR candidly submitted that, in both these cases, since the appellants failure to adduce sufficient evidences in support of its activities and connected documents as envisaged u/r 17K(2) of IT-Rules, the Ld. CIT (E) rejected to grant registration u/s 12AA of the Act, it shall in all the fairness could be remanded for de-nova consideration, however with a direction to the appellant to adduce necessary evidences in one-go without delaying the remand proceedings. Modern Education Society ITA No. 357/NAG/2019 & Agrawal Seva Samiti ,Paratwada, ITA No. 375/NAG/2019 ITAT-Nagpur Page 5 of 6 7. It has to be appreciated that the purpose of the provisions for registration of trust u/s 12AB and granting of recognition u/s 80G of the Act, derives their spirit from the Directive Principles of State Policy enshrined in the Constitution of India. The Govt. of India makes every endeavour to provide welfare to one and all in the society at large, and in view thereof the registration for public charitable trusts are given in order to ensure that through these charitable trusts benefits flows to entire society, thus the Directive Principles of State Policy are achieved. These provisions for the trust registration u/s 12AB and granting of recognition u/s 80G of the Act enhance the socio economic welfare in the society. Furthermore, the Income Tax laws are welfare legislations and not penal in nature. Therefore, in the interest of justice and considering all the afore-stated observations, we are of the considered view that, albeit the appellant failed to adduce necessary documents before registering authority, however deserves one more opportunity to make good the defects/shortcomings. Modern Education Society ITA No. 357/NAG/2019 & Agrawal Seva Samiti ,Paratwada, ITA No. 375/NAG/2019 ITAT-Nagpur Page 6 of 6 8. In view hereof, without offering our comment on merits of the case, we set aside both these impugned orders and remit these matter back to the file of Ld. CIT(E) for de-nova adjudication preferably in three effective hearings to the appellant assessee. Needless to say that, the appellants shall ensure necessary compliance in accordance with law and shall adhere to timelines strictly without seeking any unreasoned adjournment. 9. In result, these appeals are ALLOWED FOR STATISTCIAL PURPOSES. U/r 34 of ITAT Rules, order pronounced in open court on this Friday 01 st day of September, 2023. -S/d- -S/d- S. S. GODARA G. D. PADMAHSHALI JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे/ PUNE ; दिन ांक / Dated : 01 st day of September, 2023. आदेशकीप्रधिधलधपअग्रेधिि / Copy of the Order forwarded to : 1.अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr.CIT(Exemption),Pune 4. The CIT-Concerned (MH-India) 5. DR, ITAT, Nagpur Bench 6.ग र्डफ़ इल / Guard File. Ashwini आदेशान ु सार / By Order वररष्ठ ननजी सनिव / Sr. Private Secretary आयकर अपीलीय न्यायानिकरण, प ु णे / ITAT, Pune.