SUNRISE EDUATION SOCIETY , HOSHIAR PUR V. COMMISSIONER OF INCOME TAX (EXEMPTION ), CHANDIGARH

ITA 579/ASR/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0530 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2018-2019
• Appeal Filed On: 27-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution; Benefit of exemption; Set aside
• Section: 12A; 12AA; 72; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. N. K. CHOUDHRY, JUDICIAL MEMBER AND SH. O. P. MEENA ACCOUNTANT MEMBER I.T.A. NO. 579/ASR/2018 ASSESSMENT YEAR: SUNRISE EDUCATIONAL SOCIETY, VPO MANANHANA, GARHSHANKER, HOSHIARPUR [PAN: AANAS 8872Q] VS. CIT (EXEMPTIONS), CHANDIGARH (APPELLANT) (RESPONDENT) APPELLANT BY : SH. SURINDER MAHAJAN (C. A.) RESPONDENT BY: SH. ALOK KUMAR CIT-DR DATE OF HEARING: 16.12.2019 DATE OF PRONOUNCEMENT: 18.12.2019 ORDER PER O. P. MEENA, AM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (EXEMPTIONS), CHANDIGARH (IN SHORT CIT(E)) DATED 29.09.2018 PASSED U/S 12AA(1)(B)(II) OF THE I.T. AC T, 1961 (IN SHORT I.T. ACT). 2. GROUND NO. 1 AND 2 STATES THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(EXEMPTIONS) HAS ERRED IN LAW AND ON FACTS I N REJECTING THE APPLICATION U/S 12AA(1)(B)(II) OF THE ACT WHICH IS WHOLLY AGAINST T HE LAW AND ON FACTS, HENCE THE REGISTRATION SHOULD HAVE BEEN GRANTED. 3. SUCCINCTLY FACTS OF THE CASE ARE THAT THE ASSESS EE IS A EDUCATIONAL SOCIETY WITH THE OBJECT TO PROVIDE GOOD EDUCATION TO THE CHILDRE N, TO TRAIN THE CHILDREN WITH A ITA NO. 579/ASR/2018 (AY ) SUNRISE EDUCATIONAL SOCIETY V. CIT(E) 2 VIEW OF MAKING THEM GOOD CITIZENS OF THE REPUBLIC O F INDIA, TO DEVELOP BODY AND MIND OF THE CHILDREN BY PARTICIPATING IN GAMES AND OTHER CO-CURRICULAR ACTIVITIES, TO TRAIN THEM TO MAKE INDIA FREE FROM CASTE, CREED, DR UG AND OTHER ILL-MANNERED CUSTOMS. 4. THE ASSESSEE TRUST FILED AN APPLICATION FOR REGI STRATION U/S 12A OF THE ON 29.03.2018 BEFORE CIT(E) CHANDIGARH. THE CIT(E) HAS REFERRED THE PROVISIONS OF SECTION 12AA AND OBSERVED THAT THERE ARE TWO BASIC CONDITIONS FOR GRANT OF REGISTRATION U/S 12AA. THE SAME INCLUDE, APART FROM THE EXAMINATION OF OBJECTS OF THE SOCIETY, SATISFACTION OF THE COMPETENT AUTHORIT Y IN RESPECT OF GENUINENESS OF ACTIVITIES AS WELL PARTICULARLY WHEN THE APPLICANT IS AN ONGOING ENTITY. THEREFORE CIT VIDE LETTER DATED 26.07.2018 HAS ASKED THE ASSE SSEE TO FURNISH VARIOUS DETAILS COVERING FROM POINT NO. (I) TO (XXIV) FIXING THE CA SE FOR HEARING OF 16.08.2018, HOWEVER AN EMAIL WAS RECEIVED FOR ADJOURNMENT WHICH WAS GRANTED FOR 06.09.2018. FURTHER QUERIES WERE RAISED ON 22.09.20 18 AND SENT THROUGH EMAIL TO THE ASSESSEE AND WHICH REPLY WAS FILED ON 24.09.201 8. AFTER PERUSAL OF THE REPLY OF THE ASSESSEE, THE CIT(E) EXEMPT NOTED THAT THE APPL ICATION HAS NOT PROVIDED THE DETAILS ASKED IN THE ADDITIONAL QUERIES. THE APPLIC ANT WAS ASKED TO PROVIDE THE DETAILS OF VOLUNTARY CONTRIBUTION OF RS.12,85,000/- , COPY OF ACCOUNT OF CAPITAL BANK LOAN ALONG WITH THE COPY OF AGREEMENT, COPY OF ACCO UNT & COPY OF ITRS OF THE PERSONS WHO HAVE UNSECURED LOANS, SALARY STRUCTURE ALONG WITH NAMES AND QUALIFICATION OF THE TEACHERS BUT THE APPLICATION H AS NOT PROVIDED ANY DETAILS REGARDING THE INFORMATION CALLED FOR. THE APPLICANT WAS SPECIFICALLY ASKED THAT WHETHER THE APPLICANTS CASE HAS BEEN EARLIER APPRO VED/REJECTED U/S 10(23C)(VI) OF THE IT ACT, 1961 BUT IN RESPONSE TO WHICH THE APPLI CANT HAS REPLIED THAT THIS IS THE FIRST TIME THE ASSESSEE HAS APPLIED FOR REGISTRATIO N U/S 12AA. THEREFORE IN THE ABSENCE OF RESPONSES/DIRECT CLARIFICATIONS, THE GEN UINENESS OF THE ACTIVITIES CARRIED ITA NO. 579/ASR/2018 (AY ) SUNRISE EDUCATIONAL SOCIETY V. CIT(E) 3 OUT BY THE APPLICANT GET IMPUGNED. THEREFORE CIT(E) OBSERVED THAT THE ONUS LIES ON THEM TO PROVIDE ALL RELEVANT INFORMATION BUT IN ABS ENCE OF SPECIFIC RESPONSE TO THE QUERIES RAISED THE PRESUMPTIONS INHERENT THEREIN TH E GENUINENESS OF THE ACTIVITIES OF THE SOCIETY CANNOT BE ASCERTAINED. ACCORDINGLY, THE APPLICATION FILED IN FORM NO. 10A FOR REGISTRATION U/S 12AA OF THE ACT WAS REJECT ED. 5. BEING AGGRIEVED THE ASSESSEE APPLICANT FILED THI S APPEAL BEFORE THE TRIBUNAL. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE TRUST HAS COMPLIED THE REQUIREMENT BY FILING THE DETAILS BY LETTER DATED 2 4.09.2018 PLACED AT PAPER BOOK PAGE 4-5 WHICH WAS SENT THROUGH E-MAIL OF WHICH COP IES PLACED OF PAPER BOOK PAGE NO. 44. THE ASSESSEE HAS FILED DETAILS OF CONSTITUT ION AND RULES OF SUNRISE EDUCATIONAL SOCIETY WHICH ARE PLACED AT PAPER BOOK PAGE 3 TO19. THE REPLY TO FIRST QUESTIONERS WAS FILED ON 10.09.2018 WHICH ARE PLACE D AT PAPER BOOK PAGE 1 TO 14 WITH REFERENCE TO ADDITIONAL QUERIES. THE ASSESSEE FILED HIS REPLIES WHICH ARE PLACED AT PAPER BOOK PAGE 44 AND 45, HOWEVER DUE TO SOME T ECHNICAL ERROR THERE COULD NOT BE UNDOUBTED. THE ANNEXURE TO THE REPLY WERE NOT AT TACHED TO THE E-MAIL DATED 25.09.2018 SENT BY THE ASSESSEE. IT IS PERTINENT TO MENTION THAT WHILE THE LETTER SPECIFIES THAT THE DETAILS ARE ATTACHED HEREWITH, H OWEVER, THE SAME WERE NOT ATTACHED THAT THE E-MAIL DUE TO SOME TECHNICAL ERRO R. HOWEVER SUBSEQUENTLY WHILE E-MAIL DATED 28.09.2018, THE ASSESSEE PROVIDED BILL S FOR ADDITIONS TO FIXED ASSETS (PB PG. 47 AND 47). HOWEVER, WITHOUT RAISING ANY FU RTHER QUERIES, THE CIT(E) HAS REJECTED THE APPLICATION WITHOUT INFORMING THE ASSE SSEE THAT ATTACHMENT TO THE E- MAIL DATED 25.09.2018 HAS NOT BEEN RECEIPTED. THERE FORE THIS IS THE ONLY REASON FOR REJECTING OF ASSESSEES APPLICATION OF NON-SUBMISSI ON OF CERTAIN DOCUMENTS/INFORMATION WHICH ARE NOT RELEVANT FOR AS CERTAINING THE GENUINENESS OF THE ACTIVITIES OF THE SOCIETY. IT IS A SETTLED PRIN CIPLE OF LAW THAT FOR THE PURPOSE OF GRANT OF REGISTRATION U/S 12AA, POWERS OF LD. CIT A RE LIMITED TO EXAMINATION AS TO ITA NO. 579/ASR/2018 (AY ) SUNRISE EDUCATIONAL SOCIETY V. CIT(E) 4 WHETHER THE OBJECTS OF THE SOCIETY ARE CHARITABLE I N NATURE AND EXAMINATION OF GENUINENESS OF THE ACTIVITIES OF THE ASSESSEES ARE NOT NECESSARY AT THIS OBJECT AND SUPPORT OF THIS SUBMISSION. THE LD COUNSEL HAS PLAC ED RELIANCE ON THE FOLLOWING DECISIONS: A. CIT VS. SHIRDI SAI DARBAR CHARITABLE TRUST (DHARAMS HALA) (2017) 395 ITR 0567 (P&H) B. DHARMA SANSTHAPAK SANGH (NIYAS) VS. CIT (2008) 13 DTR 0589, (2008) 118 TTJ 0823 C. GREEN ACRES EDUCATIONAL TRUST VS. DY CIT (2016) 182 TTJ 0537 (MUMBAI) D. GLOBAL ACADEMY OF EMERGENCY MEDICINE VS. CIT (EXEMP TION) (2018) 31 CCH 0531 DEL TRIB E. LORD SHIVA EDUCATIONAL WELFARE SOCIETY VS. CIT (EXE MPTION) (2018) 72 ITD 0429 ((AMRITSAR-TRIB) IN VIEW OF ABOVE, THE LD COUNSEL CONTENDED THAT THE STATUTORY REQUIREMENT FOR REGISTRATION U/S 12AA OF THE ACT WERE SUBMITTED TO LD. CIT(E), HOWEVER JUST BECAUSE THE ASSESSEE DID NOT PROVIDED CERTAIN DETAI LS SINCE THE ATTACHMENT WITH THE E-MAIL COULD NOT BE SENT, IT CANNOT BE THE GROUND F OR REJECTION OF APPLICATION FOR WHICH THE LD. COUNSEL HAS PLACED RELYING ON THE DEC ISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CITY MOTESSORI SCHOOL V. UNION OF INDIA [2009] 225 CTR 188. 6. PER CONTRA THE LEARNED CIT-DR SUPPORTED THE ORDE R OF THE CIT(E). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE LD. CIT(E) HAS DENIED THE REGISTRATION U/S 12AA OF THE ACT AS THE APPLICANT TRUST COULD NOT FURNISH CERTAIN DE TAILS DUE TO NON SUBMITTING ATTACHMENT WITH THE E-MAIL SENT BY THE APPLICANT ON 25.09.2018. THE TRUST WAS CONSTITUTED BY THE INDENTING AND WAS REGISTERED UND ER THE SOCIETIES ACT. SINCE THE ITA NO. 579/ASR/2018 (AY ) SUNRISE EDUCATIONAL SOCIETY V. CIT(E) 5 TRUST HAS NOT COMPLIED WITH CERTAIN DETAILS DUE TO NON-ATTACHMENT OF THE DETAILS WITH THE E-MAIL SENT BY THE TRUST. HOWEVER, IN OUR OPINI ON, IT IS PREMATURE TO DECIDE TO CONCLUDE THAT THE TRUST HAS NOT CARRIED OUT IN CHAR ITABLE ACTIVITIES. AS SUCH, IT IS A SETTLED LAW THAT THE DENIAL OF REGISTRATION U/S 12A A OF THE ACT IS NOT PROPER ON NON- SUBMISSIONS OF CERTAIN INFORMATION THOUGH ACTIVITIE S OF THE TRUST ARE CHARITABLE ACTIVITIES. THE CIT(E) CANNOT EXAMINE THE OBJECTS O F THE TRUST WHICH IS AT PREMATURE STAGE. THE LD. COUNSEL HAS PLACED RELIANCE ON THE D ECISION OF CIT V. SHIRDI SAI DARBAR CHARITABLE TRUST (DHARAMSHALA) [2017] 395 ITR 567 (P&H). WHEREIN THE HONBLE HIGH COURT HAS HELD THAT WHILE GRANTING REG ISTRATION U/S 12AA OF THE ACT. CONDITIONS AS PROVIDED IN SECTION 14 ARE ELSEWHERE ARE TO BE SEEN THE ASSESSING OFFICER, AT THE TIME OF ASSESSMENT PROCEEDINGS ON E ARLY BASIS AND NOT BY THE CIT(E) WHILE GRANTING REGISTRATION U/S 12A OF THE ACT. WHI LE GRANTING REGISTRATION U/S 12A OF THE ACT, THE ONLY REQUIREMENT AS STATED ARE WITH RESPECT TO THE CHARITABLE NATURE OF THE OBJECT OF THE ASSESSEES AND THE GENUINENESS OF THE ACTIVITIES. THE LD. COUNSEL ALSO PLACED RELIANCE ON VARIOUS CASE LAWS AS MENTIO NED ABOVE WHICH ALSO SUPPORTS ITS CASE. IN VIEW OF THESE FACTS, WE FIND THAT THE REGISTRATION OF TRUST U/S 12AA DOES NOT INVOLVE ENQUIRY INTO THE ACTUAL ACTIVITIES OR A PPLICATION OF THE FUNDS ETC. THEREFORE, AT THIS STAGE THE ONLY ENQUIRY REQUIRED TO BE CONDUCTED WAS WITH RESPECT TO THE OBJECT OF THE TRUST ALONE. THE DETAILS CALLE D FOR BY THE CIT(E) PERTAINED TO THE MATTERS THAT MAY BE EXAMINED AT THE STAGE OF THE AS SESSMENT. AT THIS STAGE, IF THE ASSESSEE WERE TO BE FOUND TO HAVE ACTUALLY ENGAGED IN NON CHARITABLE ACTIVITY. THE BENEFIT OF EXEMPTION MAY BE DENIED AT THIS STAGE IN THE MANNER PROVIDED BY THE ACT. IN THE LIGHT OF ABOVE FACTS AND CIRCUMSTANCES, WE ARE OF THE CONSIDERED OPINION THAT THE MATTER FOR REGISTRATION U/S 12AA SHOULD BE SET ASIDE TO FILE OF THE CIT(E) FOR EXAMINATION OF THE BASIC FACTS AND PASSED A FRE SH ORDER. IN THE LIGHT OF THE DETAILS FILED BY THE ASSESSEE AND THE RATIO LAID DO WN IN THE AFORESAID DECISIONS OF THE ITA NO. 579/ASR/2018 (AY ) SUNRISE EDUCATIONAL SOCIETY V. CIT(E) 6 HONBLE JURISDICTIONAL HIGH COURT. THIS APPEAL IS T HEREFORE ALLOWED AND SET ASIDE FOR STATISTICAL PURPOSES. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON DECEMBER 18, 2019 SD/- SD/- (N. K. CHOUDHRY) (O. P. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 18.12.2019 /GP/SR. PS. COPY OF THE ORDER FORWARDED TO: (1) THE APPELLANT: (2) THE RESPONDENT: (3) THE CIT(APPEALS), (4) THE CIT CONCERNED (5) THE SR. DR, I.T.A.T. TRUE COPY BY ORDER