Shree Chamuda Education Trust, Ahmedabad V. The Commissioner of Income Tax (Exemption), Ahmedabad

ITA 490/AHD/2022

AI Insights

The case involves multiple appeals by different trusts against the orders of the Commissioner of Income Tax (Exemption), Ahmedabad, which rejected their applications for registration under Section 12AB of the Income Tax Act, 1961. The primary contention was the non-satisfaction of genuineness of the activities of the trusts. The trusts argued that their applications were rejected due to technical lapses and non-furnishing of required details, despite their engagement in genuine charitable activities. The Tribunal, referencing various judgments, including those from the Gujarat High Court, emphasized that technical grounds should not lead to the rejection of legitimate claims, and thus restored the matter for fresh consideration.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 135823 (ITAT-AHMEDABAD)
• Duration Of Justice: 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: C
• Next Hearing Date: 25-07-2023
• Assessment Year: 2022-2023
• Appeal Filed On: 23-11-2022
• Other Referred Cases: S.R. Koshti Vs. CIT, Vinay Chandulal Satiav N.O. Parekh CIT, Gandhi Ashram Dhinoj Vs. CIT(E), Vareli Textile Industry Vs. CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRIKAMLESHMAKWANA
• Assessee Lawyers: SHRIDHRUNALBHATT

Judgement Text

आयकरअपीलीयअधिकरण , अहमदाबादनयायपीी INTHEINCOMETAXAPPELLATETRIBUNAL, ‘’C’’BENCH,AHMEDABAD BEFORESHRIWASEEMAHMED,ACCOUNTANTMEMBER And SHRIT.RSENTHILKUMAR,JUDICIALMEMBER Sr. No. ITANo.NameofAppellant Nameof Respondent 1. No.490/Ahd/2022 ShreeChamundaEducation Trust, 28,TarunShaktiSociety, Ghatlodiya, Ahmedabad-380061 PAN:AACTS5496C Commissionerof Income Tax(Exemption) Ahmedabad. 2. No.491/Ahd/2022 SanskarFoundationMehsana, 27MahatmaGandhi ShoppingCentre,2 nd Floor, Mehsana-34002. PAN:AADTS1301B Commissionerof Income Tax(Exemption) Ahmedabad. 3.No.492/Ahd/2022 IISSTPublicationTrust, 27MahatmaGandhi ShoppingCentre,2 nd Floor, RajmahelRoad, Mehsana-34002. PAN:AAAT10686A Commissionerof Income Tax(Exemption) Ahmedabad. Assesseeby:ShriDhrunalBhatt,A.R Revenueby:ShriKamleshMakwana,CIT.D.R सुनवाईकीतारीख /DateofHearing:26/07/2023 घोषणाकीतारीख /DateofPronouncement:04/08/2023 आदेश /ORDER PERWASEEMAHMED,ACCOUNTANTMEMBER: Thecaptionedappealshavebeenfiledattheinstanceofthedifferent AssesseeagainsttheseparateorderoftheLearnedCIT(Exemption),Ahmedabad, arisinginthematteroftheorderpassedunders.12ABoftheIncomeTaxAct, 1961(here-in-afterreferredtoas"theAct"). ITAnos.490-492/AHD/2022 2 First,wetakeupITANo.490/AHD/2022,inthecaseofShree ChamundaEducationTrust 2.Theassesseehasraisedthefollowinggroundsofappeals: 1.ThecommissionerofIncomeTax(Exemption)AhmedabadhasearedinLawandonfacts, inrejectingtheapplicationinform10ABU/s.12ABoftheIncomeTaxAcrt,1961,onnon satisfactionofgenuinenessoftheactivitiesofthetrust. 2.TheCIT(Exemption)haserredinlaw,inoverlookingandinsummarilyrejectingandnot considered,thetangiblematerialsubmittedduringtheproceedingu/s.12ABofIncomeTax Act.1961. 3.Yourappellantcrave,leavetoadd,alter&ortoamendmodifysubstitutealloranyground ofappealbeforefinalhearingifnecessitysoarise. 2.1Attheoutset,itwasnoticedthattheLd.CIT,(Exemption)hasrejectedthe applicationfiledforregistrationu/s12ABoftheAct,onthereasoningthatthe assesseehasnotfurnishedtherequisitedetailsdespiteofseveralreminders.As pertheLd.CIT(Exemption),theassesseehasfurnishedonlypartofthedetailsin responsetothenoticeissuedtoit.TheLd.ARbeforeusfurtherfairlyadmitted thattheassesseecouldnotfurnishtherequisitedetailsduringtheproceedings beforetheLd.CIT(Exemption)butvehementlysubmittedthattheassesseeis engagedingenuinecharitableactivitieswithinthemeaningoftheprovisionsof u/s2(15)oftheAct.Therefore,thesamecannotberejectedontechnicallapses. 2.2ItwasfurtherassuredbytheLd.Counselthattheassesseeisreadyto makethenecessarycomplianceandaccordinglyrequestedustorestoretheissue tothefileoftheLd.CIT(Exemption)forfreshadjudication. 3.Percontra,theLd.DRcontendedthatintheeventoftherejectionof applicationu/s12ABoftheAct,theassesseecanapplyafreshapplicationfor registrationu/s12ABoftheAct.Assuch,nofurtheropportunityshouldbe grantedtotheassessee.TheLd.DRvehementlysupportedtheorderoftheLd. CIT(E). ITAnos.490-492/AHD/2022 3 4.Wehaveheardtherivalcontentionsofboththepartiesandperusedthe materialsavailableonrecord.Attheoutset,wenotethattheHon’bleCourtsin seriesofthecasehaveheldthatthecaseoftheassesseeshouldnotberejected onthetechnicalground.Inthisregard,wefindsupportandguidancefromthe judgmentHon’bleGujaratHighCourtinthecaseofS.R.KoshtiVs.CITreportedin 276ITR165hasheldasunder: 2.18.Thepositionis,therefore,that,regardlessofwhethertherevisedreturnwas filedornot,onceanassesseeisinapositiontoshowthattheassesseehasbeenover- assessedundertheprovisionsoftheAct,regardlessofwhethertheover-assessmentisas aresultofassessee’sownmistakeorotherwise,theCIThasthepowertocorrectsuchan assessmentundersection264(1)oftheAct.IftheCITrefusestogiverelieftothe assessee,insuchcircumstances,hewouldbeactingdehorsthepowersundertheActand theprovisionsoftheActand,thereforeisduty-boundtogiverelieftoanassessee,where due,inaccordancewiththeprovisionsoftheAct. 3.19.Inthepresentcase,therespondent-CIThasnowherestatedthatthe petitionerisnotentitledtothereliefundersection10(10C)oftheAct.Infact,thesaid positionisundisputed.TheAssessingOfficerhimselfhadpassedanorderundersection 154oftheAct,grantingsuchrelief.Inthecircumstances,eventheorderundersection 264oftheActmadeon29-3-2004,cannotbesustained. 4.20.Awordofcaution.TheauthoritiesundertheActareunderanobligationtoact inaccordancewithlaw.TaxcanbecollectedonlyasprovidedundertheAct.Ifan assessee,underamistake,misconceptionoronnotbeingproperlyinstructed,isover- assessed,theauthoritiesundertheActarerequiredtoassisthimandensurethatonly legitimatetaxesduearecollected.ThisCourt,inanunreporteddecisionincaseofVinay ChandulalSatiav.N.O.Parekh,CIT[Spl.CivilApplicationNo.622of1981dated20-8- 1981],haslaiddowntheapproachthattheauthoritiesmustadoptinsuchmattersinthe followingterms: 5."TheSupremeCourthasobservedinnumerousdecisions, includingRamlalv.RewaCoalfieldsLtd.AIR1962SC361,StateofWest Bengalv.Administrator,HowrahMunicipalityAIR1972SC749andBabutmalRaichand Oswalv.LaxmibaiR.TarteAIR1975SC1297,thattheStateauthoritiesshouldnot raisetechnicalpleasifthecitizenshavealawfulrightandthelawfulrightisbeing deniedtothemmerelyontechnicalgrounds.TheStateauthoritiescannotadoptthe attitudewhichprivatelitigantsmightadopt." 4.1Fromtheabove,itisrevealedthattheincomeoftheassesseeshouldnot beoverassessedevenifthereisamistakeoftheassessee.Assuchthelegitimate deductionforwhichtheassesseeisentitledshouldbeallowedwhiledetermining thetaxableincome.WealsonotethattheHon’bleGujaratHighCourtinthecase ofVarelitextileindustryversusCITreportedin154Taxman33whereinitwas heldasunder: ITAnos.490-492/AHD/2022 4 6.Itisequallywell-settledthatwhereacauseisconsciouslyabandoned(asinthe presentcase)thepartyseekingcondonationhastoshowbycogentevidencesufficient causeinsupportofitsclaimofcondonation.Theonusisgreater.Oneof thepropositionsofsettledlegalpositionistoensurethatameritoriouscaseisnotthrown outonthegroundoflimitation.Therefore,itisnecessarytoexamine,atleastprima facie,whethertheassesseehasorhasnotacaseonmerits. 4.2Besidestheabove,wealsonotethatthisTribunalinvolvingidenticalfacts andcircumstancesinthecaseofGandhiAshramDhinojVs.CIT(E)inITANo. 470/AHD/2022hasgiventhefindingasreproducedbelow: 7.HavingheardtheLearnedCounselappearingforthepartiesandhavingregardtothefacts andcircumstancesofthecase,we,inordertopreventthemiscarriageofjustice,finditfitand propertoprovideanotheropportunityofbeingheardtotheappellantinsupportofhiscase forregistrationoftheTrustunderSection12ABoftheAct.We,thus,disposeofthisappealby restoringtheissuetothefileoftheLd.CIT(E)withadirectionuponhimtoprovideafurther opportunityofbeingheardtotheappellantandtoconsiderthedocumentsand/orevidence whichtheappellantwouldfileasperthedirectionissuedbytheLd.CIT(E).Uponconsidering theentiresetofdocumentsanduponaffordinganopportunityofbeingheardtotheappellant theLd.CTT(E)todisposeoftheapplicationforgrantofregistrationoftheTrustunderSection 12ABoftheActwithareasonedorder.Wealsomakeitclear,thatintheevent,theappellant doesn'tco-operatewiththeLd.CIT(E)asdirectedhereinabove,theLd.CIT(E)wouldbeat libertytopassordersstrictlyinaccordancewithlaw. 8.Intheresult,assesee’sappealisallowed. 4.3Inviewoftheaboveandafterconsideringthefactsintotality,weareof theviewthattheassessee,beingacharitableorganization,shouldbegivenone moreopportunitytofurnishthenecessarydocumentsbeforetheld.CIT(E). Accordingly,wesetasidethefindingofthelearnedCIT(E)andrestoretheissue tohimforfreshadjudicationaspertheprovisionsoflaw.Hence,thegroundof appealoftheassesseeisallowedforstatisticalpurposes. 4.4Intheresult,theappealoftheassesseeisallowedforstatisticalpurposes. ComingtoITANo.491-492/Ahd/2022,anappealbytheAssessee 5.Attheoutset,wenotethattheissuesraisedbytheassesseeinitsgrounds ofappealinthecaseofSankarFoundationandIISSTPublicationTrustare identicaltotheissuesraisedbytheassesseeinITANo.490/AHD/2022inthecase ofShreeChamundaEducationTrust.Therefore,thefindingsgiveninITANo. ITAnos.490-492/AHD/2022 5 490/AHD/2022shallalsobeapplicabletopresentappealsITANo.491- 492/Ahd/2022.TheappealoftheassesseebearingITANo.490/Ahd/2022has beendecidedbyusvideparagraphNo.4ofthisorderinfavouroftheassessee forstatisticalpurposes.ThelearnedDRandtheARalsoagreedthatwhateverwill bethefindingsfortheassessmentyearinITANo.490/Ahd/2022shallalsobe appliedtotheITANo.491-492/Ahd/2022.Hence,thegroundofappealfiledby assesseeisallowedforstatisticalpurposes. 6.Intheresult,boththeappealsoftheassesseeareallowedforstatistical purposes. OrderpronouncedintheCourton04/08/2023atAhmedabad. Sd/-Sd/- (T.RSENTHILKUMAR)(WASEEMAHMED) JUDICIALMEMBERACCOUNTANTMEMBER (TrueCopy) Ahmedabad;Dated04/08/2023 Manish