Adani Skill Development Centre, Ahmedabad V. The C.I.T. (Exemption), Ahmedabad

ITA 486/AHD/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6175 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 25-04-2017
• Assessment Year: misc
• Appeal Filed On: 27-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIBHA BHALLA CIT DR
• Assessee Lawyers: S N SOPARKAR
• Keywords: Principle of natural justice
• Section: 12AA

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD EKUHK CKSJM EKUHK CKSJM EKUHK CKSJM EKUHK CKSJM BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER AND SHRI, MANISH BORAD, ACCOUNTANT MEMBER I.T.A. NO.486/AHD/2017 ADANI SKILL DEVELOPMENT CENTRE. AHMEDABAD VS. CIT (EXEMPTION) AHMEDABAD. ! PAN/GIR NO. : AAOCA 4064 B ( ' / APPELLANT ) .. ( #' RESPONDENT ) '$ APPELLANT BY : SHRI S.N. SOPARKAR, AR #'%$ / RESPONDENT BY : MS. VIBHA BHALLA, CIT DR & '(%)* / DATE OF HEARING 25/04/2017 +,-.%)* / DATE OF PRONOUNCEMENT 27/04/2017 / O R D E R PER SHRI MAHAVIR PRASAD, JUDICIAL MEMBER : THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE I S DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX(EXEMPTI ON)- AHMEDABAD, DATED 25/01/2017. 2. ASSESSEE HAS BEEN TAKEN FOLLOWING GROUNDS OF APP EALS: (I). ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE ORDER DATED 25.1.2017 PASSED BY THE LEARNED CIT(EXEMPTIONS) U/S .12AA OF THE I.T. ACT IS BAD IN LAW AND, THEREFORE, DESERVES TO BE QU ASHED FOR THE REASON THAT THE SAID ORDER WAS PASSED WITHOUT CONSIDERING THE DETAILED SUBMISSIONS FILED BY THE APPELLANT VIDE ITS LETTER DATED 22.12.2016. ITA NO.486/AHD/ 2017. ADANI SKILL DEVELOPMENT CENTRE VS. CIT(EXEMPTION) - 2 - (II). ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT (EXEMPTIONS) ERRED IN REJECTING THE APPLICATION FILED BY THE APPELLANT FOR APPROVAL U/S.12AA OF THE I.T. ACT IN SPITE OF THE FACT THAT ALL STATUTORY CONDITIONS WERE FULLY SATISFIED BY TH E APPELLANT. 3. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER:- THE APPLICATION FOR REGISTRATION OF THE TRUST U/S 12AA OF THE INCOME-TAX ACT WAS RECEIVED ON 04.07.2016 BY THE OFFICE IN FOR M NO.10A UNDER RULE 11AA OF THE ACT ALONG WITH REGISTRATION CERTIF ICATE OF CHARITY COMMISSIONER. THE LIST OF THE OBJECTS OF THE TRUST INCLUDES MANY ACTIVITIES. 4. A LETTER DATED 01.09.2016 WAS ISSUED TO THE APPL ICANT TO FURNISH DETAILED NOTE ON THE ACTIVITIES ACTUALLY CARRIED OU T BY THE TRUST AS WELL AS THE FOLLOWING DOCUMENTS / DETAILS: (I). PLEASE SPECIFY THE CLAUSE IN TRUST DEED REGARD ING REVOCABILITY OR IRREVOCABILITY. (II). PLEASE STATE WHETHER DEED CONTAINS UTILIZATIO N CLAUSE? (SPECIFYING THAT THE PROFITS ARE TO BE USED ONLY FOR THE OBJECT S OF THE TRUST) (III). PLEASE STATE ANY PART OF TRUST PROPERTY OR I NCOME IS USED OR APPLIED OR ENSURES DIRECTLY OR INDIRECTLY FOR THE B ENEFIT OF ANY PERSON SPECIFIED U/S. 13(3) OF THE IT. ACT? (IV). DETAILS OF DONATIONS RECEIVED OR PAID AND CON FIRMATION/PAN OF THE DONORS. (V). DETAILS OF MOVABLE & IMMOVABLE ASSETS HELD AS ON DATE. (VI). WHETHER NOC FROM THE PREMISES OWNER IS OBTAIN ED OR RENTAL AGREEMENT IS ENCLOSED. (VII). PLEASE SUBMIT DOCUMENTARY EVIDENCES OF ACTUA L CHARITABLE ACTIVITIES CARRIED OUT BY THE TRUST FROM THE DATE O F INCEPTION OF TRUST TILL DATE. ITA NO.486/AHD/ 2017. ADANI SKILL DEVELOPMENT CENTRE VS. CIT(EXEMPTION) - 3 - (VIII). PLEASE SUBMIT COPY OF AUDITED ACCOUNTS LIKE COPY OF RECEIPT AND PAYMENT A/C., INCOME & EXPENDITURE A/C, BALANCE SHE ET, FOR THREE YEARS OR FROM THE DATE OF CREATION TILL DATE, WHICHEVER IS LESS. (IX). PLEASE GIVE DETAILS AS TO HOW THE TRUST GENER ATES FUNDS FOR ACHIEVING THE OBJECT OF TRUST. (X). PLEASE SUBMIT EVIDENCES THAT THE CORPUS AMOUNT HAS BEEN TRANSFERRED TO THE TRUST/INSTITUTION. (XI). PLEASE SPECIFY THAT THE TRUST IS IN RECEIPT O F AMOUNTS MENTIONED IN FIRST PROVISO TO SECTION 2(15) OF THE IT. ACT. (XII). COPY OF CERTIFICATE OF UNDERTAKING? (XIII). COPY OF CERTIFICATE U/S. 13(1) (C) OF THE I T. ACT? (XIV). FURTHER, IT IS SEEN THAT AS PER TRUST DEED T HE DISSOLUTION CLAUSE IS NOT PROPER. 5. HOWEVER, ON GIVEN DATE, NEITHER APPLICANT ATTEND ED THE OFFICE NOR FURNISHED ANY DETAILS/ DOCUMENTS NOR SOUGHT ANY ADJ OURNMENT. 6. FOLLOWING THE PRINCIPLES OF NATURAL JUSTICE, ONE MORE OPPORTUNITY WAS GIVEN TO THE ASSESSEE, ANOTHER NOTICE WAS ISSUE D TO THE APPLICANT ON 02.12.2016. ON TOP OF THIS LETTER, 'FINAL OPPORTUNITY' IS WRITT EN IN BOLD LETTER TO INTIMATE THE ASSESSEE THAT THIS IS THE LA ST OPPORTUNITY FOR PROCEEDINGS U/S 12AA OF THE INCOME-TAX ACT, 1961. V IDE ABOVE- MENTIONED LETTER, THE CASE WAS FIXED FOR 26.12.2016, IN THIS LETTER, IT IS MADE AMPLY CLEAR TO THE APPLICANT THAT IN CASE OF N ON-COMPLIANCE, THEIR APPLICATION FOR REGISTRATION IS LIABLE TO BE REJECT ED FOR WANT OF THE DETAILS AS ASKED FOR IN THE ABOVE-SAID LETTER. THE APPLICAN T HAS NOT RESPONDED TO THIS LETTER ALSO. SINCE THE APPLICANT HAS NOT FURNI SHED THE REQUIRED DETAILS, ACCORDINGLY LEARNED CIT CONSTRAINED TO DISPOSE OF T HE REGISTRATION APPLICATION ON THE BASIS OF MATERIAL AVAILABLE ON R ECORD. ITA NO.486/AHD/ 2017. ADANI SKILL DEVELOPMENT CENTRE VS. CIT(EXEMPTION) - 4 - 7. PERUSAL OF RECORDS REVEALS THAT THE APPLICANT HA S NEITHER CARRIED OUT ANY CHARITABLE/RELIGIOUS ACTIVITIES NOR ESTABLISHED CORPUS TO UNDERTAKE THE CHARITABLE ACTIVITIES. THIS CLEARLY INDICATES THAT THE APPLICANT DOES NOT HAVE INTENTION EVEN TO START CHARITABLE/RELIGIOUS A CTIVITIES. SECTION 12AA MAKES IT VERY CLEAR THAT BEFORE GRANTING REGISTRATI ON UNDER THIS SECTION, THE COMMISSIONER HAS TO SATISFY HIMSELF ABOUT THE G ENUINENESS OF THE ACTIVITIES OF THE TRUST OR INSTITUTION AND ALSO HE HAS TO VERIFY THAT THESE ACTIVITIES ARE IN CONSONANCE WITH THE OBJECTS OF TH E TRUST OR INSTITUTION. RELIANCE IN THIS REGARD IS PLACED ON THE CASE OF HARDAYAL CHARITABLE AND EDUCATIONAL TRUST VS. CIT-II, AGRA, 150 TTJ 384 (AGRA) (2012) OR 25 TAXMANN.COM 28 (AGRA) . AS DISCUSSED ABOVE, THE APPLICANT HAS FAILED TO FILE DOCUMENTARY EVIDENCES TO ENABLE THE LEARNED CIT TO SATISFY ABOUT THE GENUINENESS OF ITS ACTIVITIES AND TO VERI FY THESE ACTIVITIES ARE IN CONSONANCE WITH ITS OBJECTS. 8. LOOKING AT THE ABOVE FACTS, LEARNED CIT REJECTED THE APPLICATION FILED IN FORM NO.10A FOR THE APPROVAL U/S.12AA OF T HE INCOME TAX ACT. 9. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IMP UGNED ORDER PASSED BY THE LEARNED CIT(EXEMPTION), IT WAS STATED THAT MEMORANDUM OF ASSOCIATION (MOA) DATED 27/04/2016 AND WAS INCOR PORATED ON 16/04/2016 VIDE CERTIFICATE OF INCORPORATION U/S.7( 2) OF THE COMPANIES ACT, 2013 ISSUED BY THE GOVERNMENT OF INDIA, MINIST RY OF CORPORATE AFFAIRS, CENTRAL REGISTRATION CENTRE. AS PER THE MO A THE APPELLANT WAS INCORPORATED FOR CARRYING ON PUBLIC CHARITABLE ACTI VITIES IRRESPECTIVE OF ITA NO.486/AHD/ 2017. ADANI SKILL DEVELOPMENT CENTRE VS. CIT(EXEMPTION) - 5 - CAST, CREED OR RELIGION AND THE OBJECTS AND ACTIVIT IES TO BE CARRIED OUT WERE CLEARLY SPECIFIED IN THE MOA. THE APPELLANT APPLIED FOR REGISTRATION U/S. 12A(1) OF THE IT ACT TO THE CIT(EXEMPTIONS), AHMEDA BAD VIDE ITS APPLICATION DATED 30/06/2016, RECEIVED IN THE OFFIC E OF THE CIT(EXEMPTIONS) ON 04/07/2016. THIS APPLICATION WAS ACCOMPANIED BY THE STATUTORY FORM NO.10A WITH ANNEXURES-A & B AS A LSO ALL OTHER NECESSARY DOCUMENTS INCLUDING A COPY OF MOA. PAN WA S ALREADY ALLOTTED TO THE APPELLANT BY THE IT DEPARTMENT AND COPY OF THE PAN CARD WAS ALSO FILED. LIST OF SHAREHOLDERS AND DIRECTORS WITH ADDRESS WAS ALSO FILED. 10. THE LEARNED AR ALSO FILED DETAILED PAPER BOOK C ONTAINING ALL THE PAPERS PERTAINING TO APPLICATION FOR REGISTRATION O F CERTIFICATE U/S. 12AA. 11. IN VIEW OF THE FOREGOING OBSERVATION, WE DIRECT THE LEARNED CIT(EXEMPTION) TO RECONSIDER APPLICATION OF THE APP ELLANT AND BEFORE PASSING THE ORDER OF THE LEARNED CIT(EXEMPTION) WIL L ALSO KEEP IN MIND BELOW CASE [2013] 29 TAXMANN.COM 228 (GUJARAT) IN THE MATTER O F CIT-I VS. KUTCHI DASA OSWAL MOTO PARIWAR AMBAMA TRU ST : SECTION 12AA OF THE INCOME-TAX ACT, 1961 - CHARITAB LE OR RELIGIOUS TRUST - REGISTRATION PROCEDURE - POWER OF COMMISSIO NER - ASSESSEE MADE AN APPLICATION FOR REGISTRATION UNDER SECTION 12A(1)(A) - COMMISSIONER NOTED FROM TRUST DEED THAT OBJECTIVES OF TRUST WERE MAINLY RELIGIOUS - COMMISSIONER CALLED UPON ASSESSEE TO PR ODUCE EVIDENCE REGARDING EXPENSES INCURRED TOWARDS OBJECTS OF ORGA NIZATION - ON FAILURE OF ASSESSEE TO BRING ON RECORD ANY SUCH EVI DENCE, COMMISSIONER REJECTED ASSESSEE'S APPLICATION FOR REGISTRATION - TRIBUNAL, HOWEVER, GRANTED REGISTRATION TO ASSESSEE-TRUST - WHETHER EV EN THOUGH ITA NO.486/AHD/ 2017. ADANI SKILL DEVELOPMENT CENTRE VS. CIT(EXEMPTION) - 6 - COMMISSIONER HAS POWER TO CALL FOR SUCH DOCUMENTS O R INFORMATION FROM TRUST AS HE THINKS NECESSARY, YET IT DOES NOT MEAN THAT IF ACTIVITIES OF TRUST HAVE NOT COMMENCED, COMMISSIONER HAS AUTHO RITY TO REJECT ITS APPLICATION FOR REGISTRATION ON GROUND THAT TRUST F AILED TO CONVINCE HIM ABOUT GENUINENESS OF ACTIVITIES - HELD, YES - WHETH ER, THEREFORE, TRIBUNAL WAS JUSTIFIED IN SETTING ASIDE IMPUGNED OR DER OF COMMISSIONER - HELD, YES [PARAS 5 & 6] [IN FAVOUR OF ASSESSEE] 12. FURTHER DIRECT THAT LEARNED CIT(EXEMPTION) PASS ED AN APPROPRIATE ORDER WITHIN 90 DAYS FROM THE DATE OF RECEIPT OF TH IS ORDER. THE ORDER OF THE CIT(EXEMPTION) IS SET ASIDE. 13. APPELLANT IS DIRECTED TO CO-OPERATE WITH THE LE ARNED CIT(EXEMPTION). 14. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. THIS ORDER PRONOUNCED IN OPEN COURT ON 27/04/2017 SD/- SD/- EKUHK CKSJM EKUHK CKSJM EKUHK CKSJM EKUHK CKSJM EGKOHJ IZLKN EGKOHJ IZLKN EGKOHJ IZLKN EGKOHJ IZLKN YS[KK LNL; U;KF;D LNL; YS[KK LNL; U ;KF;D LNL; YS[KK LNL; U ;KF;D LNL; YS[KK LNL; U ;KF;D LNL; ( MANISH BORAD ) (MAHAVIR PRASA D) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 27/04/2017 PRITI YADAV, SR. PS ITA NO.486/AHD/ 2017. ADANI SKILL DEVELOPMENT CENTRE VS. CIT(EXEMPTION) - 7 - ! '!# COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT 2. #' / THE RESPONDENT. 3. 012) & 3) / CONCERNED CIT 4. & 3) 45 / THE CIT(A)-AHMEDABAD. 5. 678 )'12 *12. 0 / DR, ITAT, AHMEDABAD 6. 89:( GUARD FILE. $ / BY ORDER, #6) ) //TRUE COPY// %/ &' ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD TRUE COPY 1. DATE OF DICTATION 25/04/2017 (DICTATION-PAD 3 P AGES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 26/04/2017 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S 26/04/2017 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER