M/s Gyan Gunn Sagar Educational & Charitable Trust, Maur Mandi V. The Commissioner of Income Tax (Exemption), Chandigarh

ITA 512/ASR/2016

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0749 (ITAT-AMRITSAR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 23-05-2017
• Assessment Year: misc
• Appeal Filed On: 13-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Onus to prove
• Section: 12A; 12AA; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH.T.S. KAPOOR, ACCOUNTANT MEMBER AND SH.N.K.CHOUDHRY, JUDICIAL MEMBER I.T.A NO.512(ASR)/2016 ASSESSMENT YEAR: ............ M/S. GYAN GUNN SAGAR EDUCATION & CHARITABLE TGRUST, MAUR MANDI. PAN: AAAAG-9653J VS. CIT, (EXEMPTIONS), CHANDIGARH. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. RAMAN SETH (CA) RESPONDENT BY: SH. RAHUL DHAWAN (DR) DATE OF HEARING: 23.05.2017 DATE OF PRONOUNCEMENT: 26.05.20 17 ORDER PER T. S. KAPOOR (AM): THIS IS AN APPEAL FILED BY ASSESSEE AGAINST THE ORD ER OF LD. CIT(EXEMPTION), CHANDIGARH, REFUSING REGISTRATION U /S 12AA OF THE ACT, DATED 30.06.2016. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL. 1. THAT THE LD. CIT(E), CHANDIGARH HAS ERRED IN DE NYING THE REGISTRATION TO THE ASSESSEE UNDER SECTION 12AA OF THE INCOME TAX A CT, BOTH ON THE BASIS OF FACTS, MATERIAL ON RECORD AND AS PER LAW. 2. THAT THE LEARNED CIT(E), CHANDIGARH WAS WRONG O N FACTS WHILE STATING IN CONCLUDING LINES OF PARA 4 OF HIS ORDER THAT IN THE ABSENCE OF SUBMISSIONS REGARDING THE ACTIVITIES, IT IS DIFFICU LT TO VERIFY BOTH THE OBJECTS & GENUINENESS OF ACTIVITIES OF THE SOCIETY. WHEREA S THE ASSESSEE HAS DULY SUBMITTED THE SAME ON 15.04.2016, ALONGWITH OTHER D OCUMENTS LIKE TRUST DEED, BYE LAWS, LAST THREE YEARS ITRS, BALANCE SHEE TS AND INCOME & EXPENDITURE ACCOUNT ETC. ITA NO.51 2(ASR)/2016 2 3. THAT THE LD. CIT(E) HAS PASSED ORDER IN HASTE, WITHOUT CONSIDERING THE FACT THAT THE SHOW CAUSE LETTER ISSUED ON 06.06 .2016 WAS NEVER SERVED TO THE ASSESSEE AND NO FURTHER OPPORTUNITY WAS ALLO WED TO THE ASSESSEE. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E SOCIETY IS REGISTERED UNDER THE SOCIETIES REGISTRATION ACT AND THE MAIN OBJECTS OF THE SOCIETY AS NOTED BY LD. CIT(EXEMPTION) ARE TO E STABLISH AND TO RUN EDUCATIONAL INSTITUTIONS, TECHNICAL INSTITUTIONS, T RAINING INSTITUTIONS IN ALL FIELDS OF ENGINEERING, RESEARCH, MEDICAL, MANAG EMENT, COMMERCE, ARTS OR ANY OTHER SYSTEM OF EDUCATION. THE ASSESSEE APPLIED FOR REGISTRATION U/S 12AA OF THE INCOME TAX ACT BY FILI NG APPLICATION IN FORM NO. 10A ALONGWITH MEMORANDUM OF ASSOCIATION. THE AP PLICATION FOR REGISTRATION WAS REJECTED BY PASSING AN ORDER AS UN DER: 2. IN ORDER TO APPRAISE THE ACTIVITIES AND WHETHER THE SAME WERE IN SYNC WITH THE STATED OSTENSIBLE OBJECTS AN OPPORTUN ITY OF PERSONAL HEARING WAS ACCORDED TO THE APPLICANT. THE MATTER W AS FIXED FOR 13.04.2016. NOBODY ATTENDED ON THE SAID DATE NOR WA S ANY APPLICATION FOR ADJOURNMENT RECEIVED. ON 15.04.2016 A WRITTEN R EPLY WAS RECEIVED BY POST. SUBSEQUENTLY BASED ON THE MATERIAL AVAILABLE IN THE APPLICATION ANOTHER SHOW-CAUSE LETTER WAS ISSUED ON 06.06.2016 VIDE WHICH IT WAS REQUESTED THAT THE FOLLOWING DOCUMENTS/CLARIFICATIO NS BE PROVIDED BY 16.06.2016: (I) DETAILS OF INCOME FROM PROPERTY HELD FOR CHARIT ABLE PURPOSE AS ENVISAGED U/S 11 OF THE I.T. ACT AND INCOME OF INST ITUTION FROM CONTRIBUTIONS AS ENVISAGED U/S 12 OF THE I.T. ACT T HAT ARE SOUGHT TO BE EXEMPTED. (II) FIXED ASSETS DETAILS AND PROPERTY DETAILS WITH THE DOCUMENTARY EVIDENCES. ITA NO.51 2(ASR)/2016 3 (III) DOCUMENTARY EVIDENCE WITH RESPECT TO OWNERSHI P OF LAND AND BUILDING THE SOCIETY. (IV) BANK NARRATION ALONG WITH SOURCES OF THE DEPOS ITS. (V) SALARY EXPENSE DETAILS WITH NAME, ADDRESS, AMOU NT & ROLE OF THE PERSONS WITH TDS DETAIL. (IV) COPY OF FEE STRUCTURE OF YOUR SCHOOL VIS-A VIS THE FEE STRUCTURE AS PER GOVERNMENT GUIDE LINES ALONG WITH TOTAL NUMB ER OF STUDENTS AND THAT FROM THE WEAKER SECTION AS A PERCENTAGE OF THE TOTAL NUMBER OF STUDENTS WHO HAVE BEEN PROVIDED FREESHIP/ SUBSIDIES. (VII) MOA IN ORIGINAL AND REGISTRATION CERTIFICATE OF THE SOCIETY. (VIII) BOOKS OF ACCOUNTS FOR FINANCIAL YEAR 2015-16 AND THE ASSOCIATE FINANCIAL STATEMENTS. (IX) NOTE ON ACTIVITIES WITH SUPPORTING DOCUMENTS S OCIETY ALONG WITH NATURE OF RECEIPTS IN ACCOUNT DULY CORROBORATE D BY BANK STATEMENTS/ENTRIES. (X) DETAILS OF CORPUS FUNDS RECEIVED ALONG WITH GIV E EVIDENCE OF THE SPECIFIC WRITTEN INSTRUCTIONS WHICH MAY HAVE BEEN P ROVIDED WITH THE CORPUS DONATIONS. (XI) UNSECURED LOAN TAKEN IN THE F.Y.2014-15, 2013- 14, 2012-13, DETAILS OF THE SAME ALONG WITH ASSESSMENT ITRS DETA IL OF THE LONG GIVERS. 3. THE APPLICANT, VIDE THE SAME SHOW-CAUSE INFORMED TH AT, SINCE FROM THE STATED OBJECTS IT WAS EVIDENT THAT THE MAIN EMPHASIS IS ON RUNNING & MANAGING SCHOOL, THERE ARE SPECIFIC PROVISIONS IN RESPECT OF INSTITUTIONS OF THIS NATURE IN SECTION 10(23C). IN THIS LIGHT IT WAS ASKED TO RATI ONALIZE WHY APPLICATION HAS BEEN MADE FOR A 12A REGISTRATION. VIDE THE SAME SHO W CAUSE, THE APPLICANT WAS FURTHER INTIMATED THAT IN THE ABSENCE OF DETAIL S OF ACTIVITIES OR DOCUMENTARY EVIDENCES IT WAS DIFFICULT TO VERIFY TH E CHARITABLE ACTIVITIES, ITA NO.51 2(ASR)/2016 4 COVERED BY SECTION 2(15) OF THE ACT, BEING CARRIED ON BY THE SOCIETY. IN THE ABSENCE OF ANY ACTIVITIES REVEALED BY THE FINANCIAL STATEMENTS FILED WITH THE APPLICATION THE APPLICANT WAS REQUESTED TO FILE FIN ANCIAL STATEMENTS FOR THE F.Y.2015-16 TO ENABLE THIS OFFICE GET A CLEAR PICTU RE OF THE ACTIVITIES UNDERTAKEN. 4. THE APPLICANT WAS FURTHER ASKED TO PROVIDE A RATION AL WHY REGISTRATION SHOULD BE GRANTED IN THE ABSENCE OF ANY APPARENT CHARITABL E ACTIVITIES BEING PURSUED. NONE ATTENDED ON THE DATE FIXED. NO ATTEMPT WAS MAD E BY THE ASSESSEE TO PUT FORTH ITS VIEWS EVEN TILL THE DATE OF PASSING OF TH E ORDER. GIVEN THE NON- COMPLIANCE ON THE VARIOUS OCCASIONS AFFORDED TO THE ASSESSEE IT BECOMES EVIDENCE THAT THE APPLICANT APPEARS NOT INTERESTED IN PURSUING THE MATTER. IN THE ABSENCE OF SUBMISSIONS REGARDING THE ACTIVITIES , IT IS DIFFICULT TO VERIFY BOTH THE OBJECTS & GENUINENESS OF ACTIVITIES OF THE SOCIETY. 5. FURTHER KEEPING INTO VIEW THE INDIFFERENT ATTITUDE OF THE APPLICANT, IT IS SAFE TO CONCLUDE THAT THE ASSESSEE HAS FAILED TO DISCHARGE ITS ONUS TO PROVE THAT ITS INCOME IS FREE FROM EXIGIBILITY OF TAXES. IN LIGHT OF THE ABOVE, I HAVE NO OPTION BUT TO PROCEED ON MERITS AND DENY THE REGISTRATION TO THE APPLICANT U/S 12AA OF INCOME TAX ACT, 1961. 4. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US. 5. AT THE OUTSET, THE LD. AR SUBMITTED THAT THE APP EAL WAS TIME BARRED BY 40 DAYS AND APPLICATION FOR CONDONATION O F DELAY ALONG WITH AFFIDAVIT OF ASSESSEE WAS PLACED IN THE FILE. THE L D. AR SUBMITTED THAT THE EMPLOYEE WHO WAS TO FILE THE APPEAL THROUGH CHARTER ED ACCOUNTANT HAD GONE ON MEDICAL LEAVE AND THAT IS WHY DELAY HAD OCC URRED. IT WAS SUBMITTED THAT THE DELAY IN FILING THE APPEAL BE CO NDONED. FINDING THE EXPLANATION OF LD. AR SATISFACTORY, WE CONDONED THE DELAY AND LD. AR WAS DIRECTED TO PROCEED WITH HIS ARGUMENTS. ITA NO.51 2(ASR)/2016 5 THE LD. AR SUBMITTED THAT THE ASSESSEE HAD REPLIED TO ALL QUERIES RAISED BY LD. CIT(E) AND IN THIS RESPECT OUR ATTENT ION WAS INVITED TO PB PAGE 1 TO 29 WHERE COPIES OF DOCUMENTS SUBMITTED BY ASSESSEE WERE PLACED. THE LD. AR FURTHER SUBMITTED THAT AS CLAIMED BY LD. CIT(E) ANOTHER NOTICE DATED 6.6.2016 WAS ISSUED BUT WHICH WAS NEVER RECEIVED BY ASSESSEE AS THE SCHOOL WAS CLOSED DURING SUMMER HOLIDAYS. IT WAS FURTHER SUBMITTED THAT THE SAID NOTICE WAS RECEIVED BACK BY DEPARTMENT AS UNSERVED AND IN THIS RESPECT OUR ATTENTION WAS I NVITED TO PAPER BOOK PAGE 30 WHERE COPY OF LETTER WRITTEN BY POST MASTER WAS PLACED. WITHOUT PREJUDICE THE LD. AR ARGUED THAT COPY OF MEMORANDUM OF ASSOCIATION ALONG WITH ALL NECESSARY DOCUMENTS WERE SUBMITTED T O LD. CIT(E) AND AT THE TIME OF REGISTRATION THE LD. CIT(E) IS REQUIRED TO EXAMINE ONLY THOSE DOCUMENTS AND THEREFORE, IT WAS PRAYED THAT REGISTR ATION BE GRANTED TO THE ASSESSEE. 6. THE LD. DR HEAVILY PLACED HIS RELIANCE ON THE IM PUGNED ORDER. 7. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GO NE THROUGH THE MATERIAL PLACED ON RECORD. IT IS UNDISPUTED FACT THAT CIT(E) HAS PASSED ORDER IN HASTE, WITHOUT CONSIDERING THE FACT THAT THE SHOW C AUSE LETTER ISSUED ON 06.06.2016 WAS NEVER SERVED TO THE ASSESSEE AND NO FURTHER OPPORTUNITY WAS ALLOWED TO THE ASSESSEE. THE LD. CIT(E) PASSED THE ORDER ON 30.06.2016 ITSELF. THE ORDER IS A NON SPEAKING ORDE R. THEREFORE, IN VIEW OF THE CIRCUMSTANCES, WE DEEM IT APPROPRIATE TO REM IT THE ISSUE BACK TO ITA NO.51 2(ASR)/2016 6 LD. CIT(E) WHO SHOULD CONSIDER IT AGAIN AFTER AFFOR DING DUE OPPORTUNITY TO THE ASSESSEE OF BEING HEARD. THE ASSESSEE SHOULD FI LE REPLY TO THE SHOW CAUSE NOTICE DATED 6.6.2016 AND ON RECEIPT OF THE R EPLY OF ASSESSEE THE LD. CIT(E) SHOULD PASS THE ORDER WITHIN TWO MONTHS AND SHOULD DECIDE THE ISSUE AS PER LAW BY PASSING A REASONED AND SPEA KING ORDER. 8. IN VIEW OF THE ABOVE, THE APPEAL FILED BY THE AS SESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 26.05. 2017 . SD/- SD/- (N.K.CHOUDHRY ) (T. S. KAP OOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:26.05.2017. /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER