SHREE 1008 MUNISUVARNATH THRITHANKAR SAMOSHARAN, GURGAON V. CIT(E), CHANDIGARH

ITA 426/DEL/2021

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 8026 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-08-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: misc
• Appeal Filed On: 12-04-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution; Set aside
• Section: 12A; 12AA; 13; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G NEW DLEHI BEFORE SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER AND SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER ITA NO. 426/DEL/2021 SHREE 1008 MUNISUVARNATH, VS. CIT (EXEMPTION), THRITHANKAR SAMOSHARAN, CHANDIGARH. C/O JAIN MANDIR, H.NO. 527, SEC. 15, PART-I, GURGAON. PAN : ABGAS0409M (APPELLANT) (RESPONDENT) APPELLANT BY : MS. RANO JAIN, ADVOCATE RESPONDENT BY: SH. H.K. CHOUDHARY, CIT/DR DATE OF HEARING: 25/08/2021 DATE OF ORDER : 25/08/2021 ORDER PER K. NARASIMHA CHARY, J.M. AGGRIEVED BY THE ORDER DATED 10/3/2021 PASSED BY TH E LEARNED COMMISSIONER OF INCOME-TAX (EXEMPTION) [LD. CIT(E) ] UNDER SECTION 12AA (1) (B) (II) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT), REJECTING THE APPLICATION OF ASSESSEE FOR GRANT OF REGISTRATION U /S. 12A OF THE ACT. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE A PPLIED FOR REGISTRATION U/S. 12A OF THE ACT AND STATED OBJECTS OF THE ASSESSEE ARE MAINLY RELIGIOUS WHICH ARE DAILY WORSHIP OF JAIN LO RD; TO WORK FOR SOCIETY WELFARE; TO OPEN SCHOOLS AND PATHSHALAS; TO OPEN CH ARITABLE HOSPITALS ETC. 2 LD. CIT(E) BY ORDER DATED 10.03.2021 REJECTED THE S AID APPLICATION ON THE GROUND THAT FOR THE ASSESSMENT YEARS 2018-19 TO 202 0-21, THE ASSESSEE HAD SURPLUS, WHICH IS THEIR INCOME, BUT THEY HAVE N OT FILED ANY INCOME TAX RETURN. ON THIS GROUND LD. CIT(E) REFUSED TO GRANT THE REGISTRATION SOUGHT. 3. IT IS THE SUBMISSION ON BEHALF OF THE ASSESSEE B Y THE LD. AR THAT IF THE ASSESSEE HAD NOT FILED ANY RETURN OF INCOME, BU T AS A MATTER OF FACT, WAS UNDER LEGAL OBLIGATION TO FILE THE SAME, IN SUC H CONDITION, THE AUTHORITIES CAN ALWAYS TAKE REMEDIAL MEASURES, BUT NOT FILING OF RETURN IS NOT A GROUND TO REJECT THE APPLICATION FOR REGISTRA TION. HE PLACES RELIANCE ON THE ORDER OF COORDINATE BENCH IN SHRI SHIRDI SAI DARBAR CHARITABLE TRUST (DHARAMSHALA), BARNALA VS. CIT (EXEMPTIONS) ( ITA NO. 692/CHANDI/2015), WHEREIN IT WAS HELD THAT IN ORDER TO GRANT EXEMPTION, LD. CIT(E) HAD TO SATISFY THAT THE OBJECTS OF THE A SSESSEE ARE CHARITABLE IN NATURE AND ACTIVITIES ARE GENUINE. REST OF THE THIN GS ARE TO BE TAKEN CARE AT APPROPRIATE STAGE SUBSEQUENT THERETO. LEARNED DR HEAVILY PLACES RELIANCE ON THE ORDER OF LD. CIT(E). 4. WE HAVE GONE THROUGH THE IMPUGNED ORDER. LD. CIT (E) DID NOT COMMENT ON THE OBJECTS AND ACTIVITIES OF THE ASSESS EE, BUT THE SOLE GROUND FOR REJECTING THE REGISTRATION IS THE ASSESS EE NOT FILING THE INCOME- TAX RETURN FOR EARLIER YEARS. 5. IN SHRI SHIRDI SAI DARBAR CHARITABLE TRUST (DHAR AMSHALA) (SUPRA), BARNALA V. CIT (EXEMPTIONS), THE CHANDIGARH BENCH O F THE TRIBUNAL IN ITA NO. 692/CHANDI/2015 BY ORDER DATED 08-06-2016, HELD THAT, - 7. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOT H THE PARTIES, PERUSED THE FINDINGS OF THE AUTHORITIES BELOW AND C ONSIDERED THE MATERIAL AVAILABLE ON RECORD. THE FIRST REASON ON T HE BASIS OF WHICH THE 3 COMMISSIONER OF INCOME TAX (EXEMPTIONS) HAS REFUSED TO GRANT REGISTRATION TO THE ASSESSEE IS THAT THE ASSESSEE H AS NOT BEEN FILING ITS INCOME-TAX RETURNS IN THE EARLIER YEARS. WE DO NOT FIND THAT IT IS A GOOD REASON TO REJECT THE APPLICATION FOR REGISTRATION S INCE THE TWO CONDITIONS WHICH THE COMMISSIONER OF INCOME TAX (EXEMPTIONS) H AS TO SATISFY WHILE GRANTING THE REGISTRATION UNDER SECTION 12A OF THE ACT, ARE THAT THE OBJECTS OF THE ASSESSEE ARE CHARITABLE IN NATURE AN D THE ACTIVITIES ARE GENUINE. JUST BECAUSE THE ASSESSEE HAS NOT FILED IT S INCOME TAX RETURNS IN EARLIER YEARS, IT CANNOT BE SAID THAT THE ACTIVITIE S OF THE ASSESSEE ARE NOT GENUINE. RELIANCE PLACED BY THE LEARNED COUNSEL FOR THE ASSESSEE ON THE JUDGMENT OF THE ALLAHABAD HIGH COURT AS WELL AS THE ORDER OF THE CHENNAI BENCH OF THE TRIBUNAL ARE NOT OUT OF PLACE, WHEREBY IT HAS BEEN HELD THAT NON-FILING OF RETURN CANNOT BE ONE OF THE REASONS FOR DENYING REGISTRATION UNDER SECTION 12A OF THE 5 ACT. 8. SECTION 13 COMES INTO PLAY AT THE TIME OF GRANTI NG EXEMPTION UNDER SECTION 11 OF THE ACT AND NOT AT THE TIME OF GRANTI NG REGISTRATION UNDER SECTION 12A OF THE ACT. THE ONLY TWO REQUIREMENTS A S STATED HEREINABOVE WHILE GRANTING REGISTRATION UNDER SECTION 12A OF TH E ACT, 6 ARE WITH RESPECT TO THE CHARITABLE NATURE OF THE OBJECTS OF THE ASSESSEE AND GENUINENESS OF THE ACTIVITIES. SINCE WE OBSERVE THA T NO ADVERSE REMARKS HAVE BEEN MADE BY THE COMMISSIONER OF INCOME TAX (E XEMPTIONS) WITH REGARD TO THE OBJECTS CONTAINED IN MEMORANDUM AND A S STATED HEREINABOVE THAT THE OBSERVATIONS OF THE COMMISSION ER OF INCOME TAX (EXEMPTIONS) DO NOT LEAD TO THE CONCLUSION THAT THE ACTIVITIES OF THE ASSESSEE ARE NOT GENUINE, WE HERE BY DIRECT THE COM MISSIONER OF INCOME TAX (EXEMPTIONS) TO GRANT REGISTRATION UNDER SECTIO N 12A OF THE ACT TO THE ASSESSEE. 6. IT IS, THEREFORE, CLEAR THAT THE LD. CIT(E) DID NOT EXAMINE THE MATTER TO APPRECIATE THE OBJECTIVES OF THE ASSESSEE OR ACT IVITIES THEREOF. IF THE ASSESSEE IS UNDER LEGAL OBLIGATION TO FILE THE INCO ME TAX RETURN AND DID NOT FILE THE SAME, IT IS ALWAYS OPEN TO THE AUTHORI TIES TO TAKE APPROPRIATE ACTION FOR SUCH LAPSES, BUT IT CANNOT BE A GROUND T O REJECT THE REGISTRATION, IN THE LIGHT OF THE ABOVE DECISION OF THE TRIBUNAL. WE, 4 THEREFORE, SET ASIDE THE IMPUGNED ORDER AND RESTORE THE ISSUE TO THE FILE OF LD. CIT(E) FOR CONSIDERING THE APPLICATION IN AC CORDANCE WITH LAW. 7. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS THE 25 TH DAY OF AUGUST, 2021. SD/- SD/- (PRASHANT MAHARISHI) (K. NARSIMHA CHARY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 25/08/2021 AKS