The Divya Jyoti Seva Sansthan, Pratapgarh V. Commissioner of Income Tax (E), Lucknow

ITA 464/LKW/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9441 (ITAT-LUCKNOW)
• Duration Of Justice: 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 09-08-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K MADHUK
• Assessee Lawyers: SHWETA MITTA
• Keywords: Set aside
• Section: 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI. A. D. JAIN, VICE PRESIDENT AND SHRI T. S. KAPOOR, ACCOUNTANT MEMBER ITA NO. 464 & 463/LKW/2019 ASSESSMENT YEAR: N.A. THE DIVYA JYOTI SEVA SANSTHAN BHUPIYA MAU PRATAPGARH V. CIT (EXEMPTIONS) LUCKNOW TAN/PAN: AAABT4344A (APPELLANT) (RESPONDENT) APPELLANT BY: MS. SHWETA MITTA, FCA RESPONDENT BY: SHRI S. K. MADHUK, CIT (DR) DATE OF HEARING: 17 12 20 20 DATE OF PRONOUNCEMENT: 07 01 20 20 O R D E R PER A. D. JAIN, V.P.: THESE ARE ASSESSEES APPEALS AGAINST THE ORDERS OF THE LD. CIT (EXEMPTIONS), LUCKNOW, BOTH DATED 10/6/2019, REJECTING THE APPLICATIONS, FOR REGISTRATION UNDER SECTION 12A(A) OF THE INCOME TAX ACT, 1961, AND GRANT OF APPROVAL UNDER SECTION 80G(5)(VI) OF THE ACT. 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE FILED AN APPLICATION FOR REGISTRATION UNDER SECTION 12A(A) OF THE INCOME- TAX ACT, 1961 ON 27/12/2018 WITH THE CIT (EXEMPTIONS), LUCKNOW. THE LD. CIT (EXEMPTIONS) ISSUED A LETTER DATED 22/5/2019 TO THE ASSESSEE CALLING FOR SPECIFIC QUERIES REGARDING ITS APPLICATION FOR REGISTRATION UNDER SECTION 12A OF THE ACT, FOR COMPLIANCE ON 10/6/2019. ON THIS DATE, I.E., 10/6/2019, NEITHER ANYBODY APPEARED BEFORE THE LD. CIT (EXEMPTIONS) NOR FILED ANY APPLICATION FOR ADJOURNMENT. THE LD. CIT (EXEMPTIONS) REJECTED ITA NO.464 & 463/LKW/2019 PAGE 2 OF 5 THE APPLICATION MOVED BY THE ASSESSEE ON THE GROUND, AS ARE MENTIONED AT PARAS 3 AND 4 OF HIS ORDER, THAT THE APPLICANT HAS MERELY SUBMITTED THE MOA AND NO MATERIAL HAS BEEN PROVIDED THAT COULD THROW SOME LIGHT UPON THE ACTIVITIES, IF ANY, CARRIED OUT BY THE APPLICANT AS CLAIMED IN THE TRUST DEED; AND THAT THE APPLICANT SOCIETY HAS NOT BEEN ABLE TO PRODUCE THE BOOKS OF ACCOUNT, BANK STATEMENT AND VOUCHERS IN RESPECT OF EXPENSES CLAIMED BY THE APPLICANT FOR VERIFICATION OF OBJECTS AND ACTIVITIES OF THE TRUST. 3. BEFORE US, THE LD. A.R. OF THE ASSESSEE SUBMITTED THAT THE LD. CIT (EXEMPTIONS), LUCKNOW HAD REJECTED THE APPLICATION OF THE ASSESSEE MECHANICALLY, OBSERVING THAT THE APPLICANT HAS MERELY SUBMITTED THE MOA AND NO MATERIAL HAS BEEN PROVIDED THAT COULD THROW SOME LIGHT UPON THE ACTIVITIES, IF ANY, CARRIED OUT BY THE APPLICANT AS CLAIMED IN THE TRUST DEED; AND THAT THE APPLICANT SOCIETY HAS NOT BEEN ABLE TO PRODUCE THE BOOKS OF ACCOUNT, BANK STATEMENT AND VOUCHERS IN RESPECT OF EXPENSES CLAIMED BY THE APPLICANT FOR VERIFICATION OF OBJECTS AND ACTIVITIES OF THE TRUST. THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT THE LD. CIT (EXEMPTIONS) HAS ERRED IN LAW AND ON FACTS IN PASSING THE EX-PARTE ORDER, WITHOUT PROVIDING DUE OPPORTUNITY OF HEARING TO THE APPLICANT; THAT AT THE TIME OF GRANTING OF REGISTRATION UNDER SECTION 12AA OF THE ACT, THE BOOKS OF ACCOUNT ARE NOT REQUIRED TO BE EXAMINED AND ONLY THE OBJECTS OF THE SOCIETY ARE TO BE LOOKED INTO; AND THAT THE LD. CIT (EXEMPTIONS) HAS WRONGLY DOUBTED THE CHARITABLE CHARACTER OF THE APPLICANT SOCIETY. THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT THE ORDER OF THE LD. CIT (EXEMPTIONS) IS NOT SUSTAINABLE IN LAW, AS DUE AND APPROPRIATE OPPORTUNITY OF HEARING WAS NOT AFFORDED TO THE ASSESSEE. HE PRAYED THAT THEREFORE, THE ORDER OF THE LD. CIT ITA NO.464 & 463/LKW/2019 PAGE 3 OF 5 (EXEMPTIONS) MAY BE SET ASIDE AND HE MAY BE DIRECTED TO GRANT REGISTRATION TO THE ASSESSEE SOCIETY, UNDER SECTION 12AA OF THE ACT. 4. THE LD. D.R., ON THE OTHER HAND, HAS PLACED RELIANCE ON THE ORDER OF THE LD. CIT (EXEMPTION), LUCKNOW. 5. HEARD. WE FIND THAT THE ASSESSEE HAD APPLIED FOR REGISTRATION UNDER SECTION 12AA OF THE ACT, WHICH WAS REJECTED BY THE LD. CIT (EXEMPTIONS), OBSERVING THAT THE APPLICANT HAS MERELY SUBMITTED THE MOA AND NO MATERIAL HAS BEEN PROVIDED THAT COULD THROW SOME LIGHT UPON THE ACTIVITIES, IF ANY, CARRIED OUT BY THE APPLICANT AS CLAIMED IN THE TRUST DEED; AND THAT THE APPLICANT SOCIETY HAS NOT BEEN ABLE TO PRODUCE THE BOOKS OF ACCOUNT, BANK STATEMENT AND VOUCHERS IN RESPECT OF EXPENSES CLAIMED BY THE APPLICANT FOR VERIFICATION OF OBJECTS AND ACTIVITIES OF THE TRUST. BUT, THE LD. CIT (EXEMPTION), LUCKNOW HAS NOT EXAMINED THE OBJECTS OF THE ASSESSEE-SOCIETY, WHETHER THE SOCIETY WAS FORMED TO UNDERTAKE CHARITABLE ACTIVITIES OR NOT. MOREOVER, THE LD. CIT (EXEMPTION), LUCKNOW HAS NOT POINTED OUT ANY SPECIFIC ACTIVITY, WHICH CAN BE SAID TO BE A NON-CHARITABLE ACTIVITY. IT IS A SETTLED POSITION OF LAW THAT WHILE GRANTING REGISTRATION UNDER SECTION 12AA OF THE ACT, THE LD. CIT (EXEMPTIONS) IS REQUIRED TO EXAMINE THE OBJECTS OF THE ASSESSEE. IF THE OBJECTS OF THE ASSESSEE ARE CHARITABLE IN NATURE, REGISTRATION SHOULD BE GRANTED TO THE ASSESSEE. IT CAN ONLY BE DENIED, IF THE LD. CIT (EXEMPTIONS) HAS BROUGHT SOMETHING ON RECORD TO ESTABLISH THAT THE ASSESSEE WAS ENGAGED IN ACTIVITIES OTHER THAN CHARITABLE ONES. THIS ASPECT WAS EXAMINED BY THIS BENCH OF THE TRIBUNAL IN VARIOUS CASES, WHEREIN, THE TRIBUNAL HELD THAT WHILE GRANTING REGISTRATION UNDER SECTION 12A OF THE ACT, THE LD. CIT (EXEMPTIONS) IS REQUIRED TO EXAMINE, AS TO WHETHER THE OBJECTS OF THE APPLICANT ARE OF ITA NO.464 & 463/LKW/2019 PAGE 4 OF 5 CHARITABLE NATURE OR NOT. IN THE INSTANT CASE, THE LD. CIT (EXEMPTIONS) HAS NOT EXAMINED THE NATURE OF THE OBJECTS OF THE SOCIETY, BUT HE HAS DENIED THE REGISTRATION. THEREFORE, WE SET ASIDE THE ORDER OF THE LD. CIT (EXEMPTIONS) AND RESTORE THE MATTER TO HIS FILE WITH A DIRECTION TO RE-ADJUDICATE THE ISSUE OF GRANT OF REGISTRATION UNDER SECTION 12A OF THE ACT IN THE LIGHT OF THE OBJECTS OF THE ASSESSEE-SOCIETY, AFTER AFFORDING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE, PREFERABLY WITHIN TWO MONTHS FROM THE DATE OF RECEIPT OF THIS ORDER. 6. SINCE WE HAVE SET ASIDE THE ORDER OF THE LD. CIT (EXEMPTIONS), REJECTING THE APPLICATION FOR REGISTRATION UNDER SECTION 12A OF THE ACT, THE ORDER OF THE LD. CIT (EXEMPTIONS) REJECTING THE APPLICATION FOR GRANT OF APPROVAL UNDER SECTION 80G(5)(VI) OF THE ACT IS ALSO RESTORED TO HIS FILE FOR RE-ADJUDICATION OF THE REQUEST OF THE ASSESSEE FOR APPROVAL UNDER SECTION 80G(5) OF THE ACT, AS PER LAW. 7. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 07/01/2020. SD/- SD/- [ T. S. KAPOOR ] [ A. D. JAIN ] ACCOUNTANT MEMBER VICE PR ESIDENT DATED:07/01/2020 JJ:1712 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ITA NO.464 & 463/LKW/2019 PAGE 5 OF 5 BY ORDER ASSISTANT REGISTRAR