M/s Cancer Care Charitable Society, Moga V. Commissioner of Income Tax (Exemption), Chandigarh

ITA 37/ASR/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7826 (ITAT-AMRITSAR)
• Duration Of Justice: 7 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 19-06-2017
• Assessment Year: misc
• Appeal Filed On: 17-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DHARAM SINGH LD
• Assessee Lawyers: SHARAM LD
• Keywords: Charitable institution; Bonafide belief
• Section: 80G; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIB UNAL AMRITSAR BENCH; AMRITSAR BEFORE SH. T.S. KAPOOR, ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER I.T.A NO.37(ASR)/2017 ASSESSMENT YEAR:..... ...... M/S. CANCER CARE CHARITABLE SOCIETY, BABA DIDAR SINGH NAGAR, FEROZPUR ROAD, MOGA. PAN:AACAC-0996Q VS. CIT (EXEMPTION), CHANDIGARH. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. M.R.SHARAM (LD. ADV.) RESPONDENT BY: SH. DHARAM SINGH (LD. D.R) DATE OF HEARING:17.08.2017 DATE OF PRONOUNCEMENT:31.08.2017 ORDER PER N.K.CHOUDHRY: THE INSTANT APPEAL HAS BEEN FILED BY THE ASSESSEE, BY FEE LING AGGRIEVED AGAINST THE ORDER DATED 29 TH SEP., 2016 PASSED BY THE LD. CIT (EXEMPTION), U/S 80G(5)(VI) OF THE I. T. ACT. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APP EAL. 1. THAT THE ORDER OF THE COMMISSIONER OF INCOME T AX (EXEMPTIONS) CHANDIGARH IS BAD IN LAW AND IS BEYOND ALL THE CANNONS OF LAW AND JUSTICE. 2. THAT THE ORDER OF THE COMMISSIONER OF INCOME TAX (EXEMPTIONS) CHANDIGARH HOLDING THE APPELLANT NOT ELIGIBLE FOR R EGISTRATION FOR THE PURPOSES OF SECTION 80G IN THE FACTS AND CIRCUMSTAN CES OF THE CASE IS BAD IN LAW AND NEEDS TO BE SET-ASIDE. 3. THAT THE ORDER OF THE COMMISSIONER OF INCOME TAX (EXEMPTIONS) CHANDIGARH DECLINING THE GRANT OF APPROVAL U/S 80G WITHOUT EXAMINING THE PROPER DETAILS AND HOLDING DONATIONS RECEIVED/ ITA NO.37 (ASR)/2017 2 RECEIVABLE BY THE APPELLANT FOR THE PURPOSES OF CAP ITAL FUND IS BAD IN LAW AND NEEDS TO BE SET ASIDE. 4. THAT THE APPELLANT CRAVE LEAVE TO ADD, AMEND , DELETE ANY OF THE GROUNDS OF APPEAL AS MENTIONED ABOVE, BEFORE TH E APPEAL IS FINALLY HEARD. IT IS THEREFORE HUMBLY PRAYED THAT THE ORDER OF THE COMMISSIONER OF INCOME TAX (EXEMPTIONS) CHANDIGARH MAY KINDLY BE SET ASIDE AND THE APPROVAL DECLINED U/S 80G MAY KINDLY BE ALLOWED IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. AT THE OUTSET, THE LD. AR SUBMITTED THAT THE LD. CIT(E) DECLINED TO GRANT THE APPROVAL U/S 80G WITHOUT EXAMIN ING THE PROPER DETAILS AND HOLDING DONATIONS RECEIVED/RECEIVABLE BY TH E APPELLANT FOR THE PURPOSES OF CAPITAL FUND IS BAD IN LAW AND NEEDS TO BE SET ASIDE. THE APPELLANT IS A CHARITABLE TRUST REGISTERED U/S 12AA OF THE ACT AND ENGAGED IN THE CHARITABLE ACTIVITIES INCLUDING TREATME NT OF SERIOUS CANCER PATIENT . THE TRUST WAS REGISTERED U/S 12AA ON 13 .09.2015 AND THEREAFTER, THE APPLICATION IN FORM NO.10G WAS ALSO F ILED ON 15.03.2016 WITH THE CIT(E) ALONG WITH REQUISITE DOCUM ENTS, HOWEVER, IT CAME TO THE KNOWLEDGE OF THE ASSESSEE THAT ORDER WHIL E DECLINING THE REGISTRATION U/S 80G(5)(VI) HAS BEEN PASSED ON 29 TH SEP. 2016. IT IS IMPORTANT TO MENTION HEREIN THAT THE APPELLANT HAD ALSO FILED AN APPLICATION DATED 08.08.2016 AND THE RESPONDENT ISSUED TO SHOW CAUSE NOTICE DATED 19.12.2016 BY WHICH CERTAIN DETAILS WERE SO UGHT FROM THE APPELLANT SOCIETY AND THE APPELLANT WAS UNDER BONAFIDE BELIEF AND IMPRESSION THAT SINCE THE NOTICE DATED 19.12.2106 HAS BE EN ISSUED FOR 28.12.2016 THEREFORE THE MATTER STILL UNDER CONSIDERAT ION. THE LD. AR SUBMITTED THAT EVEN PROPER OPPORTUNITIES OF BEING HEARD WERE NOT GIVEN BY THE LD. CIT(A) AND IN FACT F ROM THE ORDER REFLECTS THAT THE SAME HAVING BEEN PASSED EX-PARTE . ITA NO.37 (ASR)/2017 3 THE LD. AR ALSO RELIED UPON THE DOCUMENTS SUBMITTED HE REIN AND STATED THAT THE SAME DOCUMENTS HAVE ALSO BEEN FILED BEFO RE THE LD. CIT(E), HOWEVER, THE ASSESSEE WAS UNABLE TO PRESENT HIS CASE IN PROPER MANNER DUE THE IMPRESSION OF SHOW CAUSE NOTICE LET TER DATED 19.12.2016 AND THEREFORE, PRAYED FOR REMITTANCE OF T HE CASE TO THE FILE OF LD. CIT(E) FOR DECIDING AFRESH . 4. ON THE OTHER HAND, THE LD. DR RELIED UPON THE ORDE R PASSED BY THE LD. CIT(E). 5. WE HAVE GONE THROUGH WITH THE FACTS AND CIRCUMSTANCE S WITH THE ORDER PASSED BY THE LD. CIT(E) AS WE REALIZE THE OPPO RTUNITIES OF PERSONAL HEARING TO THE APPELLANT WERE GIVEN ON VARI OUS OCCASIONS TO THE ASSESSEE, HOWEVER, IT SEEMS THAT THE ASSESSEE COULD NOT RE PRESENT ITS CASE BEFORE THE LD. CIT(E) IN PROPER MANNER DUE TO ONE OR THE OTHER REASON AS STATED ABOVE, THEREFORE , THE LD. CIT(E) IN ABSENCE OF CO- OPERATION OF THE ASSESSEE CONSIDERED THE REPLY OF THE AS SESSEE AND CAME TO THE BELOW MENTIONED CONCLUSION : (I) IN THE INSTANT CASE, THE SOCIETY HAS TRIED TO ACCORD A VENEER OF CORPUS TO A SIZEABLE CHUNK OF ITS COLLECTION. THEREFORE, B Y MAJORITY SHIFTING THE DONATIONS TO A CORPUS FUND THE SOCIETY IS PRECLUDIN G THE SAME FROM THE INTENDED USE FOR WHICH THE DONORS HAVE GONE AHE AD AND CONTRIBUTED. (II) AS REGARDS THE RATIONALE BEHIND SUCH CASH DEPOSITS, IT HAS BEEN EXPLAINED BY THE APPLICANT HIMSELF THAT SUCH FUNDS ARE ARRANGED BY THE SARPANCHES OF DIFFERENT VILLAGES WHERE CAMPS AR E BEING ORGANIZED AND DONATIONS ARE PREDOMINANTLY IN CASH FROM THE VI LLAGES. THIS DOESNT CLARIFY AS TO WHO WOULD BE ENTITLED TO SEEK EXEMPTIONS U/S 80G GIVEN THE ANONYMITY ABOUT THE ENTIRE THING. ITA NO.37 (ASR)/2017 4 (III) ON PERUSAL OF INCOME AN EXPENDITURE FOR THE F.Y.201 5-16 IT IS REVEALED THAT THE MAIN EXPENDITURE IS ON ACCOUNT OF SALARY, BUT EXPENSES, AND RENT. NO DETAILS, HOWEVER, HAS BEEN P ROVIDED REGARDING THE STAFF TO WHOM SALARY IS BEING PAID. T HE AUDITED ACCOUNTS REVEALS THAT OVER THE PERIOD OF TIME THE E MPHASIS OF THE SOCIETY IS MAINLY ON CREATION OF ASSETS I.E. VEHICL ES, BUSES ETC. AND ENHANCING OF CORPUS/CAPITAL FUND ONLY . AND FINALLY THE LD. CIT(E) DECLINED TO GRANT APPROVA L BY HOLDING AS UNDER: I AM OF THE CONSIDERED VIEW THAT THE APPLICATION H AS NOT BEEN ABLE TO JUSTIFY ITS QUEST FOR APPROVAL SEEKING EXEMPTION S ON DONATIONS MADE TO THE ENTITY. THE REAL PURPOSE AT PRESENT SEE MS TO AIM AT ENHANCING ITS CAPITAL FUND. MOREOVER, THE BENEFICIA RIES IN CASE OF APPROVAL TO THE SOCIETY WHO COULD CLAIM EXEMPTION F OR THEIR DONATIONS ARE NOT IDENTIFIABLE IN THE PRESENT SCHEM E OF THINGS. THE REQUEST FOR GRANT OF APPROVAL U/S 80G IS ACCORDINGL Y DECLINED. WE HAVE GONE THROUGH WITH OBSERVATIONS OF THE LD. CIT (E) AND SHOW CAUSE NOTICE DATED 19.12.2016 AND ALSO SUBMISSIONS OF THE ASSESSEE TO THE EFFECT THAT IN ADDITION TO THE EARLIER A PPLICATION DATED 15.03.2016, THE ASSESSEE HAD ALSO FILED AN APPLICATION DATED 08.08.2016 ON WHICH THE LD. CIT(E), ISSUED A SHOW CAUSE NOTICE DATED 19.12.2016 WHICH CREATED CONFUSION IN THE MIND OF THE ASSESSEE AND THE ASSESSEE PRESUMED THAT ITS PREVIOUS APPLICATION IS STILL UNDER CONSIDERATION. WE ARE SURPRISED AS TO HOW THE ASSESSEE CAN FILE TWO APPLICATIONS UNDER SAME SECTIONS FOR THE SAME PURPOSE, IT IS CLEAR FROM THE FACTS THAT EARLIER APPLICATION WAS PENDING FOR DISPO SAL BEFORE THE LD. CIT(E) AS ON 08.08.2016 , WE HAVE FAILED TO UND ERSTAND THAT WHAT WAS THE CAUSE TO FILE SECOND APPLICATION WITHOUT WAITING FOR THE RESULT OF THE PREVIOUS APPLICATION, IT AMOUNTS TO ABUSE OF TH E PROCESS OF LAW AND CANNOT BE ALLOWED TO BE CARRIED ON, HENCE, WE EXPR ESS OUR DISMAY ITA NO.37 (ASR)/2017 5 ON THE ACTION OF THE ASSESSEE AND DIRECT THE LD. CIT(E) T O REJECT THE SECOND APPLICATION DATED 08.08.2016 WITH COST , IF STILL PENDING BEFORE THE LD. CIT(E). NOW COMING TO THE INSTANT CASE , AS IT REFLECTS FROM TH E ORDER PASSED BY THE CIT(E) THAT THE ASSESSEE WAS FAILED TO DEMON STRATE HIS CASE IN A PROPER AND EFFECTIVE MANNER, THEREFORE, THE LD. CIT(E) WAS NOT HAVING ANY OPTION EXCEPT TO DECIDE THE APPLICATION ON THE BASIS OF MATERIAL AVAILABLE WHICH LD. CIT(E) DID, HOWEVER, CO NSIDERING THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE AND IN ORDER TO GIVE OPPORTUNITIES OF BEING HEARD AND TO FOLLOW THE RULE OF AUDIT AUDI ALTERAM PARTEM , WE FEEL IT APPROPRIATE TO REMIT THE CASE THE FILE OF LD. CIT(E) TO DECIDE AFRESH. IN THE RESULT, THE CASE IS REMANDED TO THE FILES OF LD CIT (E) TO DECIDE AFRESH WHILE GIVING PROPER OPPORTUNITIES OF BEI NG HEARD TO THE PARTIES . THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 31.08.2017. SD/- SD/- (T. S. KAPOOR) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:31.08.2017. /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER