SHRI VARDHMAN STHANAKWASI JAIN SHRAWAK SANGH, Akola V. COMMISSIONER OF INCOME TAX-I,nagpur, Nagpur

ITA 447/NAG/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3139 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 20-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KANE
• Assessee Lawyers: TUSHAR CHANDHARI
• Section: 12A

Judgement Text

1 ITA NO. 447/NAG/2014 IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. ITA NO. 447/NAG/2014 SHRI VARDHMAN STHANAKWASI JAIN COMMISSIONER OF INCOME TAX - I, SHRAWAK SANGH, AKOLA. VS. NAGPUR. PAN AALTS5719F APPELLANT. RESPONDENT. APPELLANT BY : SH RI TUSHAR CHANDHARI. RESPONDENT BY : SHRI NARENDRA KANE. DATE OF HEARING : 03 - 02 - 2016 DATE OF PRONOUNCEMENT : 5 TH FEBRUARY, 2016. O R D E R PER SHRI SHAMIN YAHYA, A.M . THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX REJECTING THE ASSESSEES APPLICATION SEEKING REGISTRATION U/S 12A OF THE I.T. ACT VIDE ORDER DATED 19 - 08 - 2014. 2. IN THIS CASE LEARNED CIT HAS DISMISSED THE A SSESSEES APPLICATION FOR REGISTRATION U/S 12A BY OBSERVING AS UNDER : IN THIS CASE, APPLICATION SEEKING REGISTRATION U/S 12A OF THE INCOME TAX ACT, 1961 WAS FILED BY THE APPLICANT IN THIS OFFICE ON 28/3/2014. THE TRUST CAME INTO EXISTENCE ON 26/8/201 0. THE TRUST HAS BEEN SET UP WITH FOLLOWING OBJECTS: 1. TO ORGANISE RELIGIOUS FUNCTIONS AT URBAN AND RURAL AREAS; 2. TO RUN DHARAMSHALA AND CHILD WELFARE CENTRES; 3. TO ORGANISE PROGRAMMES FOR RURAL PEOPLE SUCH AS CHARCHAS A TRA, SEMINARS, LECTU RES, BHAJAN COMPETITIONS, CULTURAL PROGRAMMES ETC. 4. RUNNING OF RELIGIOUS LIBRARIES, YOGA TRAINING, RELIGIOUS ACTIVITY CENTRES; 2 ITA NO. 447/NAG/2014 5. RUNNING OF MEDITATION CENTRES, NATUROPATHY CENTRES ETC. FOR RURAL PEOPLE. TO VERIFY THE GENUINENESS OF THE ACTIVITIES OF THE TRUST AS REQUIRED IN THE SECTION, THE CASE WAS FIXED FOR HEARING ON 19/8/2014. THE PROCEEDINGS WERE ATTENDED TO BY SHRI PRAKASHCHAND ZAMBAD, PRESIDENT OF THE TRUST AND SHRI RAMESH CHOWDHARY, CA. THE BILLS AND VOUCHERS IN SUPPORT OF EXPENSES DEBITED TO INCOME & EXPENDITURE ACCOUNT WERE ALSO PRODUCED. ON PERUSAL OF THESE, IT IS SEEN THAT THE APPLICANT HAD SPENT AN AMOUNT OF RS.3375/ - TOWARDS ADVERTISEMENT, LEGAL EXPENSES, BANK CHARGES ETC. DURING THE FINANCIAL YEAR ENDING 31/3/2011. DURING THE PREVIOUS YEAR ENDING 31/3/2012, THE APPLICANT HAD INCURRED TOTAL EXPENDITURE OF RS.105/ - WHICH RELATED TO CHARGES PAID TO THE BANK. FOR THE PREVIOUS YEAR ENDING 31/3/2013, THE TRUST HAD INCURRED EXPENDITURE OF RS.1,02,031/ - ON REPAIRS AND SALARY, RS.4834/ - ON LEGAL EXPENSES, RS.17,742/ - ON ELECTRICITY, GENERAL EXPENSES ETC. AN AMOUNT OF RS.27,680/ - WAS INCURRED ON PARYUSHAN PARV. SIMILARLY, FOR THE PREVIOUS YEAR ENDING 31/3/2014, THE TUST HAD INCURRED EXPENDITURE OF RS.1,81,836/ - ON REPAIRS & MAINTENANCE AND SALARIES AND RS.8503/ - ON EL ECTRICITY ETC.; RS.14,730/ - HAVE BEEN INCURRED ON PARYUSHAN PARV, RS.9950/ - ON JEEVDAYA AND RS.12,960/ - ON MAHOTSAVA AND CULTURAL EXPENSES. 3. FROM THE ABOVE, IT IS CLEAR THAT VERY NOMINAL EXPENSES HAVE BEEN INCURRED BY THE APPLICANT ON THE OBJECTS OF TH E TRUST. THE JEEDAYA EXPENSES & MAHOTSAVA EXPENSES, WHICH CAN BE SAID TO BE INCURRED FOR THE OBJECTS OF THE T R UST, ARE NOT SUPPORTED BY INDEPENDENT EVIDENCE. THESE EXPENSES ARE SUPPORTED BY ONLY SELF - SUPPORTING VOUCHERS. EVEN THE EXPENSES ON REPAIRS & MAIN TENANCE COMPRISING EXPENDITURE ON BRICKS, SAND ETC. ARE NOT SUPPORTED BY ANY BILL. THESE EXPENSES HAVE BEEN CLAIMED ONLY ON THE BASIS OF SELF - SUPPORTING VOUCHERS. IN ABSENCE OF ANY INDEPENDENT EVIDENCE, IT CANNOT BE VERIFIED WHETHER THE TRUST HAS CARRIED OUT ANY CHARITABLE/RELIGIOUS ACTIVITIES. THEREFORE, I AM NOT SATISFIED ABOUT THE ACTIVITIES OF THE TRUST AND REJECT THE APPLICATION FILED BY THE APPLICANT SEEKING REGISTRATION U/S 12A OF THE INCOME TAX ACT. 3. AGAINST THE ABOVE ORDER, ASSESSEE IS IN APPEA L BEFORE US. LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT THE LEARNED CIT HAS NOT GRANTED ADEQUATE OPPORTUNITY TO THE ASSESSEE. HE FURTHER SUBMITTED THAT THE LEARNED CITS INFERENCE THAT THE ASSESSEE HAS NOT INCURRED MUCH EXPENDITURE ON CHARITABLE ACTIVI TY IS BASED ON INCORRECT APPRECIATION OF FACTS. LEARNED COUNSEL SUBMITTED THAT THE LEARNED CIT HAS ONLY REFERRED TO THE PROFIT AND LOSS ACCOUNT AND HAS NOT 3 ITA NO. 447/NAG/2014 REFERRED TO THE BALANCE SHEET WHERE THE ASSESSEE HAS INCURRED SUBSTANTIAL EXPENDITURE. FURTHER LEARN ED COUNSEL OF THE ASSESSEE SUBMITTED THAT THERE ARE SEVERAL DECISIONS FROM HONBLE COURTS/ITAT THAT WHEN THE REVENUE HAS NOT FOUND ANY SHORT COMINGS IN THE OBJECT OF THE ASSESSEE TRUST THEN REJECTION OF APPLICATION FOR REGISTRATION U/S 12A IS NOT WARRANTE D. 4. PER CONTRA LEARNED D.R. AGREED THAT THE MATTER MAY BE REMITTED TO THE LEARNED CIT TO CONSIDER THE ISSUE AFRESH AFTER GIVING THE ASSESSEE PROPER OPPORTUNITY OF BEING HEAD. 5. UPON CAREFUL CONSIDERATION WE FIND CONSIDERABLE COGENCY IN THE ASSESSEES SUBMISSION THAT LEARNED CIT HAS NOT GRANTED PROPER OPPORTUNITY AND THERE IS INCORRECT APPRECIATION OF FACTS INASMUCH AS LEARNED CIT HAS NOT AT ALL REFERRED TO THE BALANCE SHEET OF THE ASSESSEE. FURTHER MORE THERE IS NO OBSERVATION ON THE PART OF LEARNED CI T REGARDING THE VERACITY OF THE OBJECTS AS PER LAW. IN THESE CIRCUMSTANCES, IN OUR CONSIDERED OPINION, INTEREST OF JUSTICE WILL BE SERVED IF THE MATTER IS REMITTED TO THE FILE OF LEARNED CIT TO CONSIDER THE ISSUE AFRESH AFTER GIVING THE ASSESSEE ADEQUATE O PPORTUNITY OF BEING HEARD. ACCORDINGLY WE REMIT THE ISSUE RAISED IN THE APPEAL TO THE FILE OF LEARNED CIT. 6. IN THE RESULT, THIS APPEAL BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 5 TH DAY OF FEBRU ARY, 2016. SD/ - SD/ - (MUKUL K. SHRAWAT) ( SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER. NAGPUR, DATED: 5 TH FEBRUARY, 2016. 4 ITA NO. 447/NAG/2014 COPY FORWARDED TO : 1. SHRI VARDHMAN STHANAKWASI JAIN SHRAWAK SANGH, C/O PRAKASH ZAMBAD TULSI, BEHIND GOVT. MILK SCHEME, SHASTRI NAGAR, AKOLA. 2. C.I.T., NAGPUR. 3. D.R., ITAT, NAGPUR. 4. GUARD FILE TRUE COPY BY ORDER WAKODE. ASSISTANT REGISTRAR, ITAT, NAGPUR