FOUNDATION FOR CONTINUOUS MEDICAL EDUCATION, MUMBAI V. DIT (E), MUMBAI

ITA 4911/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1824 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: misc
• Appeal Filed On: 25-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution; Opportunity of being heard
• Section: 12A; 12AA; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'F' BENCH, MUMBAI BEFORE SHRI JASON P. BOAZ, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN , JUDICIAL MEMBER ITA NO. 4911/MUM/2014 M/S. FOUNDATIN FOR CONTINUOUS VS. DIRECTOR OF INCOME TAX MEDICAL EDUCATION B-001, GROUND FLOOR WESTERN EDGE II, OFF WESTERN EXPRESS HIGHWAY, BORIVALI (W) MUMBAI 400066 (EXEMPTIONS) 6 TH FLOOR, PIRAMAL CHAMBERS PAREL, MUMBAI 400012 PAN AACCF2198R APPELLANT RESPONDENT APPELLANT BY: SHRI MANI JAIN RESPONDENT BY: MS. S. PADMAJA DATE OF HEARING: 15.11.2016 DATE OF PRONOUNCEMENT: 18.11.2016 O R D E R PER JASON P. BOAZ, A.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE DIT (EXEMPTIONS), MUMBAI DATED 31.01.2014 REJECTING THE ASSESSEES APPLICATION FOR REGISTRATION UNDER SECTION 12AA OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT'). 2. THE FACTS OF THE CASE, BRIEFLY, ARE AS UNDER: - 2.1 THE ASSESSEE, A COMPANY CONSTITUTED BY A MOA DA TED 29.05.2013 AND REGISTERED WITH ROC, MUMBAI ON 14.06.2013 FILED AN APPLICATION FOR REGISTRATION BEFORE THE DIT (EXEMPTIONS), MUMBAI ON 29.07.2013 IN FORM NO. 10A. NOTICE WAS ISSUED TO THE ASSESSEE ON 08.08 .2013 CALLING FOR DETAILS ON AS MANY AS 21 POINTS, INTER ALIA, REQUIR ING IT TO FURNISH COPIES OF PAN CARD OF DIRECTORS, COPY OF BANK ACCOUNT, CERTI FICATE OF REGISTRATION ISSUED BY THE CHARITY COMMISSIONER, COPIES OF AUDIT ED ACCOUNTS, NOTE ON ACTIVITIES , ETC. AND VERIFICATION OF ORIGINAL DOCU MENTS. THE LEARNED DIT NOTES THAT ONLY A FEW OF THE DETAILS CALLED FOR WER E SUBMITTED VIDE LETTER DATED 28.08.2013. SUBSEQUENTLY, INSPITE OF THE LEAR NED DIT DIRECTING THE ITA NO. 4911/MUM/2014 FOUNDATIN FOR CONTINUOUS MEDICAL EDUCATION 2 ASSESSEE TO FILE THE REMAINING DETAILS VIDE LETTER DATED 06.01.2014 AND AGAIN IN HEARING ON 09.01.2014, THE BALANCE DETAILS CALLED FOR WERE NOT FILED. IN THESE CIRCUMSTANCES THE LEARNED DIT(E) OB SERVED THAT DUE TO THE ASSESSEES NON-COMPLIANCE IN FILING THE REQUISITE D ETAILS CALLED FOR, HE WAS UNABLE TO FORM ANY OPINION ABOUT THE MERITS OF THE ASSESSEES APPLICATION FOR REGISTRATION, SINCE THERE WAS NO MATERIAL ON RE CORD TO SATISFY HIM ABOUT THE OBJECTS OF THE ASSESSEE COMPANY AND THE GENUINE NESS OF ITS ACTIVITIES WHICH ARE CONDITIONS PRECEDENT FOR GRANT OF REGISTR ATION. IN THAT VIEW OF THE MATTER, THE LEARNED DIT HOLDING THAT THE ASSESSEE H AS FAILED TO FULFIL THE MANDATORY PROCEDURAL REQUIREMENTS PRESCRIBED UNDER SECTION 12AA OF THE ACT R.W. RULE 17A, REJECTED THE ASSESSEES APPLICAT ION FOR REGISTRATION. 3.1 AGGRIEVED BY THE ORDER OF THE DIT (EXEMPTIONS), MUMBAI DATED 31.01.2014 (NO. DIT(E)/U/S.12A/49393/2013-14) REJEC TING ITS APPLICATION FOR REGISTRATION UNDER SECTION 12AA(1)(S)(II) R.W. RULE 17A OF THE ACT, THE ASSESSEE HAS PREFERRED THIS APPEAL RAISING THE FOLL OWING GROUNDS: - 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT ERRED IN REJECTING THE APPLICATION FOR REGI STRATION U/S. 12A OF THE INCOME TAX ACT, 1961 WITHOUT AFFORDING ADEQU ATE OPPORTUNITY OF BEING HEARD TO THE APPELLANT. 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT ERRED IN REJECTING THE APPLICATION FOR REGI STRATION U/S. 12A OF THE INCOME TAX ACT, 1961 HOLDING THAT THE APPELL ANT IS NOT ENGAGED IN ACTIVITIES WHICH ARE COVERED WITHIN THE MEANING OF CHARITABLE PURPOSE APPEARING IN SECTION 2(15) OF TH E INCOME TAX ACT, 1961 ON THE GROUND/S AS CONTAINED IN THE IMPUG NED ORDER OR OTHERWISE. 3) THE APPELLANT CRAVE LEAVES TO ADD, AMEND, ALTER, MODIFY AND OR WITHDRAW THE ABOVE GROUND OF APPEAL, WHICH ARE WITH OUT PREJUDICE TO ONE ANOTHER. THE APPELLANT PRAYS THIS HON'BLE TRIBUNAL TO DIRECT THE DIT (EXEMP.) TO GRANT THE REGISTRATION U/S 12A OR ANY OTHER DIRECTI ON(S) THE HON'BLE TRIBUNAL MAY DEEM FIT. 3.2.1 WE HAVE HEARD BOTH THE LEARNED A.R. OF THE AS SESSEE AND THE LEARNED D.R. FOR REVENUE AND PERUSED THE MATERIAL ON RECORD . IN THE IMPUGNED ORDER, THE LEARNED CIT(A) REJECTED THE ASSESSEES A PPLICATION FOR REGISTRATION UNDER SECTION 12AA OF THE ACT AS UNDER: - 2. A NOTICE DATED 08.08.2013 WAS SENT TO THE APPL ICANT REQUIRING IT TO FURNISH CERTAIN DETAILS/DOCUMENTS LIKE PAN CARDS OF DIRECTORS, COPY ITA NO. 4911/MUM/2014 FOUNDATIN FOR CONTINUOUS MEDICAL EDUCATION 3 OF BANK ACCOUNT(S), NOC IN RESPECT OF ITS OFFICE PR EMISES, CERTIFICATE OF REGISTRATION ISSUED BY THE CHARITY COMMISSIONER, CO PIES OF AUDITED ACCOUNTS AND NOTE ON ACTIVITIES UNDERTAKEN BY IT DU LY SUBSTANTIATED WITH DOCUMENTARY EVIDENCE. THE MANAGING DIRECTOR OF THE APPLICANT COMPANY WAS CALLED UPON TO ATTEND THE OFFICE ON 05. 09.2013 FOR THE PURPOSE OF PRODUCTION AND VERIFICATION OF ORIGINAL DOCUMENTS. THE ASSESSEE VIDE ITS LETTER DT. 28.08.2013 FILED IN TH IS OFFICE ON 05.09.2013 SUBMITTED PART DETAILS. THEREAFTER, VIDE LETTER DATED 06.01.2014 THE APPLICANT WAS ASKED TO SUBMIT PENDIN G DETAILS ON. 13.01.2013. MS. PRACHI SHAH FROM MARIAN U. SHAH & C O. ATTENDED. ON 09.01.2014 AND SUBMITTED BANK STATEMENT. VIDE ORDER SHEET NOTING DATED 09.01.2014 SHE WAS ASKED TO SUBMIT THE BALANC E DETAILS/DOCUMENTS AND THE CASE WAS ADJOURNED TO 13. 01.2014. HOWEVER, TILL DATE NOBODY ATTENDED NOR FURNISHED PE NDING DETAILS/DOCUMENTS. THEREFORE, IN VIEW OF NON-COMPLI ANCE ON THE PART OF THE APPLICANT COMPANY AND IN ABSENCE OF REQUISIT E DETAILS, I AM UNABLE TO FORM ANY OPINION ABOUT MERITS OF ITS APPL ICATION FOR REGISTRATION. 3. AS PER THE PROVISIONS OF SECTION 12AA(1)(B) A C OMPANY IS TO BE GRANTED REGISTRATION IF THE COMMISSIONER IS SATISFI ED ABOUT THE OBJECTS OF THE COMPANY AND THE GENUINENESS OF ITS ACTIVITIE S. BOTH THESE REQUIREMENTS ARE CUMULATIVE AND NOT ALTERNATIVE. TH ERE CAN BE NO DOUBT THAT THE ONUS IS ON THE APPLICANT TO PRODUCE ALL RELEVANT DOCUMENTS/INFORMATION ETC., SO AS TO ENABLE THE REG ISTERING AUTHORITY TO ARRIVE AT THE REQUISITE SATISFACTION ABOUT THE OBJE CTS OF THE COMPANY AND THE GENUINENESS OF ITS ACTIVITIES. THE SATISFAC TION OF THE REGISTERING AUTHORITY CANNOT BE A SUBJECTIVE SATISFACTION BASED ON WHIM OR CAPRI CE. IT HAS TO BE A BONA FIDE AND OBJECTIVE SATISFACTION , BASED ON DUE APPLICATION OF MIND TO A CERTAIN SET OF FACTS OR MA TERIAL BEFORE HIM. THE SATISFACTION OF THE REGISTERING AUTHORITY IS NOT A PRETENCE OR AN EMPTY FORMALITY BUT IS THE FOUNDATION OF GRANT OR REFUSAL OF REGISTRATION. IN OTHER WORDS, SUCH SATISFACTION IS THE CRUX OR ESSEN CE OF THE REGISTRATION PROCEEDINGS. WHERE THE APPLICANT FAILS TO FURNISH THE RELEVANT DOCUMENTS AND MATERIALS BEFORE THE REGISTERING AUTH ORITY SO AS TO FACILITATE THE PROCESS OF ITS ARRIVING AT A POSITIV E SATISFACTION, THE LATTER HAS NO OPTION BUT TO REFUSE THE GRANT OF REGISTRATI ON. 4. IT IS A MATTER OF RECORD THAT THE APPLICANT COMP ANY HAS NOT SUBMITTED THE DETAILS/DOCUMENTS CALLED FOR. THUS, I T IS NOT POSSIBLE TO ASCERTAIN THE NATURE OF OBJECTS FOR WHICH THE COMPA NY HAS BEEN CREATED AND WHETHER THE SAME ARE CHARITABLE U/S. 2( 15) OR NOT. THE APPLICANT COMPANY HAS NOT FURNISHED ANY DETAILS OF ACTIVITIES ACTUALLY CARRIED OUT BY IT ALONG WITH SUPPORTING DOCUMENTARY EVIDENCE. THUS, THERE IS NO MATERIAL ON RECORD TO ENABLE ME TO SATI SFY MYSELF ABOUT THE OBJECTS OF THE COMPANY AND THE GENUINENESS OF ITS A CTIVITIES WHICH ARE CONDITIONS PRECEDENT FOR GRANT OF REGISTRATION. AS THE APPLICANT COMPANY HAS FAILED TO FULFILL THE MANDATORY PROCEDU RAL REQUIREMENTS PRESCRIBED U/S.12AA READ WITH RULE 17A, ITS APPLICA TION FOR GRANT OF REGISTRATION IS REJECTED. ITA NO. 4911/MUM/2014 FOUNDATIN FOR CONTINUOUS MEDICAL EDUCATION 4 3.2.2 AFTER HEARING BOTH SIDES AND ON A PERUSAL OF THE DETAILS ON RECORD; LIKE THE NOTICE ISSUED BY THE LEARNED DIT CALLING F OR 21 DETAILS/ EXPLANATIONS, IT WAS SEEN FROM COPIES OF THE ASSESS EES REPLIES DATED 20.08.2013 AND 06.01.20154 THAT THE ASSESSEE HAD NO T FILED THE ENTIRE DETAILS CALLED FOR IN CONNECTION WITH GRANT OF REGI STRATION. THIS FACT POINTED OUT BY THE LEARNED D.R. WAS FAIRLY CONCLUDED BY THE LEARNED A.R. OF THE ASSESSEE; WHO PLEADED THAT THIS MATTER OF REGISTRAT ION BE RESTORED TO THE FILE OF THE LEARNED DIT AND UNDERTOOK TO FURNISH TH E ENTIRE DETAILS FOR CONSIDERATION BEFORE THE LEARNED DIT. IN THESE CIRC UMSTANCES OF THE CASE ON HAND, WE ARE OF THE CONSIDERED OPINION THAT THE INTEREST OF JUSTICE WOULD BE BEST SERVED IF THE IMPUGNED ORDER OF THE LEARNED DIT BE SET ASIDE AND THE ISSUE OF GRANT OF REGISTRATION UNDER SECTION 12 AA OF THE ACT IS RESTORED TO THE FILE OF THE LEARNED DIT FOR DE NOVO CONSIDER ATION AFTER AFFORDING ADEQUATE OPPORTUNITY TO THE ASSESSEE TO FILE DETAIL S/EVIDENCES CALLED FOR BY THE LEARNED DIT EARLIER AND IN RESPECT OF ANY FURTH ER QUERIES/DETAILS HE MAY CALL FOR. IT IS ACCORDINGLY ORDERED. 4. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH NOVEMBER, 2016. SD/ - SD/ - (SANDEEP GOSAIN) (JASON P. BOAZ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 18 TH NOVEMBER, 2016 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE DIRECTOR OF INCOME TAX (EXEMPTIONS) 4. THE ADDL. DIT (E), RANGE-II, MUMBAI 5. THE DR, F BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.