Shri Jhotana Kelvani Mandal Jotana, Mehsana V. The Commissioner of Income Tax (Exemption), Ahmedabad

ITA 495/AHD/2022

AI Insights

The case involves multiple appeals by different charitable organizations against the orders of the Commissioner of Income Tax (Exemption), Ahmedabad, which were related to the rejection of their applications for registration under Section 12AB of the Income Tax Act, 1961. The primary contention was the non-satisfaction of the genuineness of the activities of the trusts. The Tribunal noted that the CIT (Exemption) had rejected the applications on technical grounds due to incomplete documentation despite several reminders. The Tribunal referenced various judgments, including those from the Gujarat High Court, which supported the view that rejections on technical grounds should be avoided if the substantive issues can be addressed.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 135807 (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: Allowed
• Bench Allotted: B
• Next Hearing Date: 30-07-2023
• 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, Ramlal v. Rewa Coalfields Ltd, State of West Bengal v. Administrator, Howrah Municipality, Babutmal Raichand Oswal v. Laxmibai R. Tarte, Gandhi Ashram Dhinoj Vs. CIT(E)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SHRIDHRUNALBHATT

Judgement Text

आयकरअपीलीयअधिकरण , अहमदाबादनयायपीी INTHEINCOMETAXAPPELLATETRIBUNAL, ‘’B’’BENCH,AHMEDABAD BEFOREMsSUCHITRAKAMBLE,JUDICIALMEMBER And SHRIWASEEMAHMED,ACCOUNTANTMEMBER Sr. No. ITANo.NameofAppellant Nameof Respondent 1. No.495/Ahd/2022 ShriJhotanakelwaniMandal Jotana, At.JotanaTal.And Dist.Mehsana,0Jotana, Jotana-384421. PAN:AAATS7686J Commissionerof Income Tax(Exemption) Ahmedabad. 2. No.502/Ahd/2022 ChorasiKadvaPatidar SamajPragatiMandal, S-6-7-8PrabhuComplex, NearRajkamalPetrolPump, Mehsana, Mehsana-384002. PAN:AABTC4834F Commissionerof Income Tax(Exemption) Ahmedabad. 3.No.506/Ahd/2022 KadvaPatidarVikasMandal, AtAndPOPimpal, Tal.ChanshmaDist. Patan-384225. PAN:AACTK2337G Commissionerof Income Tax(Exemption) Ahmedabad. 4.No.510/Ahd/2022 JayPrabhuManavSeva Trust, At.PO.Motipura(Titodan), MotipuraVijapur,Mehsana, Mehsana-384001. PAN:AAATJ1071A Commissionerof Income Tax(Exemption) Ahmedabad 5.No.514/Ahd/2022 ShreeLanvaJuthKelavani AndGramVikasUttejak Mandal, 01,POLanvaTal. Chanasma-384229. PAN:AAATL1194J Commissionerof Income Tax(Exemption) Ahmedabad 6.No.518/Ahd/2022 SahyogPragatiMandal, Jasali,Deodar,Banaskanha- 385001. PAN:AAETS6474L Commissionerof Income Tax(Exemption) Ahmedabad 7.No.522/Ahd/2022 PanoliIndustries Association, 913/10,GIDCPanoli, Panoli-394116 PAN:AABTP0544K Commissionerof Income Tax(Exemption) Ahmedabad ITAno.495/AHD/2022with8others 2 8.No.526/Ahd/2022 MehsanaNaAaudichya SahastraBrahmanGnyatini DharmshalaAmbaji, NearAmbajimataTemple, Ambaji, Banaskantha-385110. PAN:AACTM0668G Commissionerof Income Tax(Exemption) Ahmedabad 9.No.530/Ahd/2022 JivandipTrust, C/oMayurkumarJRaval 320Suryanagar80FeetRO, Nr.MunibapuAshram Wadhwan, Surendranagar-363035. PAN:AACTJ66985J Commissionerof Income Tax(Exemption) Ahmedabad Assesseeby:ShriDhrunalBhatt,A.R Revenueby:ShriSudhenduDas,CIT.D.R सुनवाईकीतारीख /DateofHearing:31/07/2023 घोषणाकीतारीख /DateofPronouncement:04/08/2023 आदेश /ORDER PERBENCH: Thecaptionedappealshavebeenfiledattheinstanceofthedifferent AssesseeagainsttheseparateordersoftheLearnedCIT(Exemption),Ahmedabad, arisinginthematteroftheorderpassedunders.12ABoftheIncomeTaxAct, 1961(here-in-afterreferredtoas"theAct"). First,wetakeupITANo.495/AHD/2022inthecaseofShriJhotana KelwaniMandalJotana 2.Theassesseehasraisedthefollowinggroundsofappeals: 1.TheCommissionerofIncomeTax(Exemption)AhmedabadhasearedinLawandon facts,intheapplicationinform10ABU/S12ABoftheIncomeTax1961,onnon satisfactionofgenuinenessoftheactivitiesofthetrust. 2.TheCIT(Exemption)hasearedinlaw,inoverlookingandinsummarilyrejectingand notconsidered,thetangiblematerialsubmittedduringtheproceedingu/s12ABofIncome TaxAct.1961. ITAno.495/AHD/2022with8others 3 3.Yourappellantcrave,leavetoadd,alter,&ortoemendmodifysubstituteallorany groundofappealbeforefinalhearingifnecessitysoarise. 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,thesameshouldnotberejectedontechnical lapses. 2.2ItwasfurtherassuredbytheLd.Counselthattheassesseeisreadyto makethenecessarycomplianceandaccordinglyrequestedustorestoretheissue tothefileoftheLd.CIT(Exemption)forfreshadjudication. 3.Percontra,theLd.DRcontendedthatintheeventoftherejectionof applicationu/s12ABoftheAct,theassesseecanapplyafreshapplicationfor registrationu/s12ABoftheAct.Assuch,nofurtheropportunityshouldbe grantedtotheassessee.TheLd.DRvehementlysupportedtheorderoftheLd. CIT(E). 4.Wehaveheardtherivalcontentionsofboththepartiesandperusedthe materialsavailableonrecord.Attheoutset,wenotethattheHon’bleCourtsin seriesofthecasehaveheldthatthecaseoftheassesseeshouldnotberejected onthetechnicalground.Inthisregard,wefindsupportandguidancefromthe judgmentHon’bleGujaratHighCourtinthecaseofS.R.KoshtiVs.CITreportedin 276ITR165hasheldasunder: 2.18.Thepositionis,therefore,that,regardlessofwhethertherevisedreturnwas filedornot,onceanassesseeisinapositiontoshowthattheassesseehasbeenover- ITAno.495/AHD/2022with8others 4 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: 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: ITAno.495/AHD/2022with8others 5 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. Nowcomingtothefollowing8appealsfiledbythedifferentAssessee Sr. No. ITANo.Assessee 1. No.502/Ahd/2022 ChorasiKadvaPatidarSamaj PragatiMandal, 2.No.506/Ahd/2022 KadvaPatidarVikasMandal, 3.No.510/Ahd/2022 JayPrabhuManavSevaTrust, 4.No.514/Ahd/2022 ShreeLanvaJuthKelavaniAnd GramVikasUttejakMandal, 5.No.518/Ahd/2022 SahyogPragatiMandal, 6.No.522/Ahd/2022 PanoliIndustriesAssociation, 7.No.526/Ahd/2022 MehsanaNaAaudichyaSahastra BrahmanGnyatiniDharmshala Ambaji, ITAno.495/AHD/2022with8others 6 8.No.530/Ahd/2022 JivandipTrust, 5.Attheoutset,wenotethattheissuesraisedbythe8differentassessees initsgroundsofappealsasmentionedaboveareidenticaltotheissuesraisedby theassesseeinITANo.495/AHD/2022inthecaseofShriJhotanaKelvani MandalJotana.Therefore,thefindingsgiveninITANo.495/AHD/2022shall alsobeapplicabletopresentappealsbearingITANos. 502,506,510,514,518,522,526&530/Ahd/2022.Theappealoftheassessee bearingITANo.495/Ahd/2022hasbeendecidedbyusvideparagraphNo.4of thisorderinfavouroftheassesseeforstatisticalpurposes.ThelearnedDRand theARalsoagreedthatwhateverwillbethefindingsfortheassessmentyearin ITANo.495/Ahd/2022shallalsobeappliedtotheITANos. 502,506,510,514,518,522,526&530/Ahd/2022.Hence,thegroundsofappeals filedbydifferentassesseeareallowedforstatisticalpurposes. 5.1Intheresult,theappealsfiledbythedifferentassesseeareallowedforthe statisticalpurposes. 6.Inthecombinedresults,alltheappealsfiledbythedifferentassesseeare allowedforthestatisticalpurposes. OrderpronouncedintheCourton04/08/2023atAhmedabad. Sd/-Sd/- (SUCHITRAKAMBLE)(WASEEMAHMED) JUDICIALMEMBERACCOUNTANTMEMBER (TrueCopy) Ahmedabad;Dated04/08/2023 Manish