Shri Sai Baba Dharmik Evam Punyarth Samiti, JODHPUR V. CIT-II, JODHPUR

ITA 535/JODH/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74928 (ITAT-JODHPUR)
• Duration Of Justice: 3 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 06-03-2014
• Assessment Year: misc
• Appeal Filed On: 28-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR DEEPAK SEHGAL
• Assessee Lawyers: VIVEK MUNDRA
• Keywords: Opportunity of being heard
• Section: 80G; 12A

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENC H : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO.535 & 536/JODH/2013 SHRI SAI BABA DHARMIK EVAM PUNYARTH VS. CIT-II, J ODHPUR. SAMITI, SHRI SAI DHAM MANDIR, ROOP NAGAR, PAL ROAD, JODHPUR. PAN NO. AAMTS 6493 D (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI VIVEK MUNDRA. DEPARTMENT BY : DR. DEEPAK SEHGAL - D.R. DATE OF HEARING : 06/03/2014. DATE OF PRONOUNCEMENT : 06/03/2014. O R D E R PER N.K. SAINI, A.M THESE TWO APPEALS BY THE ASSESSEE ARE DIRECTED AGA INST THE ORDER DATED 30/09/2013 OF LD. CIT-II, JODHPUR. 2 IN THESE APPEALS, THE GRIEVANCE OF THE ASSESSEE RE LATES TO THE REJECTION OF APPLICATIONS MOVED BY THE ASSESSEE FOR REGISTRATION UNDER SECTION 12A(A) OF THE I.T. ACT, 1961 (HEREINAFTER R EFERRED TO AS THE ACT IN SHORT) AND FOR EXEMPTION UNDER SECTION 80G OF TH E ACT. 2 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE FILED THE APPLICATIONS ON 31/03/2013 ALONG WITH FORM NO. 10A FOR REGISTRATION UNDER SECTION 12A(A) OF THE ACT AND IN FORM NO. 10G FOR EXEMPTION UNDER SECTION 80G OF THE ACT. LD. CIT ASKED THE ASSESSEE TO FURNISH THE FOLLOWING INFORMATION:- (I) NOTES ON CHARITABLE ACTIVITIES CARRIED OUT SINC E INCEPTION OF THE TRUST. (II) PRODUCE THE BOOKS OF ACCOUNTS/DOCUMENTS MAINTA INED BY THE TRUST. (III) COMPLETE DETAILS OF DONATION RECEIVED BY THE TRUST DURING LAST 3 YEARS. THE ASSESSEE SUBMITTED A REPLY AND PRODUCED THE BO OKS OF ACCOUNTS, VOUCHERS ETC. ON 29/08/2013. THE LD. CIT ALSO ASKE D THE ASSESSEE TO SUBMIT AN UNDERTAKING WITH RESPECT TO TRUST TO BE D ISSOLVED IN A TRUST PREVIOUSLY REGISTERED UNDER SECTION 12A OF THE ACT. THE LD. CIT ALSO DIRECTED THE ASSESSING OFFICER TO SUBMIT HIS REPORT REGARDING THE ACTIVITY AND GENUINENESS OF THE ASSESSEE-TRUST. IN RESPONSE , THE ASSESSING OFFICER FURNISHED THE REPORT ON 02/09/2013 WHICH WAS FOUND TO BE NOT CLEAR. THEREFORE, LD. CIT AGAIN DIRECTED THE ASSESSING OFF ICER TO RE-EXAMINE THE FACTS AND GENUINENESS OF THE CHARITABLE ACTIVITIES OF THE ASSESSEE. THE ASSESSING OFFICER IN HIS REPORT DATED 24/09/2013 SU BMITTED AS UNDER:- 3 MY REPORT BASED ON AUDIT REPORT AND OTHER DOCUMEN TS FILED BY THE ASSESSEE FROM WHICH IT IS FOUND THAT TRUST IS A RELIGIOUS AN D AS PER RECEIPTS & EXPENDITURE THE MOST OF THE EXPENDITURE HAVE BEEN M ADE ON RELIGIOUS ACTIVITIES. IN A.Y. 2011-12, 85% OF THE TOTAL INCO ME IS NOT UTILIZED ON THE FULFILL THE OBJECT OF THE TRUST AND IT IS FURTHER N OTICED THAT THE TRUST NEITHER FILE RETURN OF INCOME NOR GIVEN NOTICE IN WRITING I N THE PRESCRIBED MANNER BEFORE THE TIME ALLOWED U/S 139(1) FOR FURNISHING T HE RETURN OF INCOME WHERE INCOME ACCUMULATED OR SET APART AND THE PERIO D TO WHICH THE INCOME IS TO BE ACCUMULATED OR SET APART. CONSIDERING THE ABOVE FACTS, REGISTRATION U/S 12A OF THE ACT IS NOT RECOMMENDED. 4. THE LD. CIT REJECTED THE APPLICATION BY OBSERVING THAT THE ASSESSEE- TRUST WAS NOT DOING THE WORK AS PER OBJECTS. NOW T HE ASSESSEE IS IN APPEAL. 5. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT TH E LD. CIT REJECTED THE APPLICATIONS MERELY ON THE BASIS OF RE PORT OF THE ASSESSING OFFICER AND WITHOUT APPLYING HIS OWN MIND WITH RESP ECT TO THE MERITS OF THE CASE. IT WAS FURTHER STATED THAT WHILE CONSIDE RING THE APPLICATION FOR REGISTRATION UNDER SECTION 12A OF THE ACT, ENQUIRY OF THE LD. CIT IS VERY LIMITED AND HE IS REQUIRED TO BE SATISFIED ONLY IN RESPECT OF TWO THINGS VIZ. GENUINENESS OF THE ACTIVITIES AND OBJECTS OF THE IN STITUTION. IT WAS CONTENDED THAT THE LD. CIT DIVERTED HIS MIND TO THE REPORTINGS MADE BY THE ASSESSING OFFICER AND THOSE REPORTINGS WERE NOT AT ALL INCONFORMITY WITH THE MANDATE OF SECTION 12A/12AA OF THE ACT. T HEREFORE, 4 REGISTRATION UNDER SECTION 12A OF THE ACT MAY BE DI RECTED TO BE GIVEN TO THE ASSESSEE. 6 . IN HIS RIVAL SUBMISSIONS, LEARNED D.R. SUPPORTED THE ORDER OF THE LD. CIT. 7 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IN THE PRESENT CASE, IT IS NOTICED THAT THE LD. CIT ACTED UPON THE REPORT DATED 24/09/2013 OF THE ASSESSING OFFICER AND DID NOT APP LY HIS OWN MIND, EVEN HE HAS NOT MENTIONED AS TO WHETHER THE OBJECTS OF T HE ASSESSEE-TRUST WERE CHARITABLE IN NATURE OR NOT? THE ASSESSING OF FICER ALSO STATED IN HIS REPORT THAT 85% OF THE TOTAL INCOME WAS NOT UTILIZE D ON THE FULFILLMENT OF THE OBJECTS OF THE TRUST, BUT THAT CANNOT BE A CRIT ERIA TO REFUSE THE REGISTRATION UNDER SECTION 12A OF THE ACT BECAUSE A PPLICATION OF THE FUNDS CAN BE CONSIDERED ONLY AT THE TIME OF FRAMING THE A SSESSMENT AND NOT FOR GRANTING THE REGISTRATION UNDER SECTION 12A OF THE ACT. WE, THEREFORE, CONSIDERING THE TOTALITY OF THE FACTS AS DISCUSSED HEREINABOVE, ARE OF THE VIEW THAT THIS ISSUE REQUIRES A FRESH ADJUDICATION AT THE LEVEL OF LD. CIT. ACCORDINGLY, THE IMPUGNED ORDER IS SET ASIDE AND TH E LD. CIT IS DIRECTED 5 TO DECIDE THE ISSUES AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE AS SESSEE. 8 . IN THE RESULT, BOTH THE APPEALS ARE ALLOWED FOR S TATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE COURT ON 06 TH MARCH, 2014). SD/- SD/- (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 06 TH MARCH, 2014. VR/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD.CIT 4. THE CIT(A) 5. THE D.R ASSISTANT REGISTRAR, ITAT, JODHPUR.