M/s. Manav Seva Samiti, Faridabad V. CIT, Faridabad

ITA 6363/DEL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3983 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: misc
• Appeal Filed On: 24-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHEFALI SWAROOP
• Keywords: Opportunity of being heard
• Section: 143(3); 80G; 12A; 12AA; 12; 11

Judgement Text

1 I. T. APPEAL NO. 6363/DEL/2014 ASSESSMENT YEAR : 2014 15. IN THE INCOME TAX APPELLATE TRIBUNAL [ DELHI BENCHES: E NEW DELHI ] BEFORE SHRI BHAVNESH SAINI , JUDICIAL MEMBER AND SHRI L. P. SAHU, ACCOUNTANT MEMBER . I. T. APPEAL NO. 6363 /DEL/201 4 ASSESSMENT YEAR : 20 1 4 1 5 . M/S. MANAV SEVA SAMITI, COMMISSIONER OF INCOME TAX, C/O. SUNIL SURESH & ASSOCIATES, VS. CHARTERED ACCOUNTANTS, F A R I D A B A D. B 20/21, FRUIT GARDEN, NH V, N I T, FARIDABAD 121 006. PAN : A AC AM 9665 Q (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI VIVEK BANSAL, ADV.; DEPARTMENT BY : MS. SHEFALI SWAROOP, CIT [DR]; DATE OF HEARING : 2 5 .0 9 .2017 DATE OF PRONOUNCEMENT : 05 . 1 0.2017 O R D E R . PER BHAVNESH SAINI, J. M. : THIS APPEAL BY THE ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF LEARNED C OMMISSIONER OF INCOME TAX , FARIDABAD, DATED 26 TH SEPTE M BER, 2014 UNDER SECTION 80G(5) OF THE INCOME TAX ACT, 1961. 2 I. T. APPEAL NO. 6363/DEL/2014 ASSESSMENT YEAR : 2014 15. 2. BRIEFLY THE FACTS AS NOTED IN THE IMPUGNED ORDER ARE THAT THE ASSESSEE FILED APPLICATION UNDER SECTION 80G(5)(VI) OF THE INCOME TAX ACT FOR GRANT OF APPROVAL UNDER THIS PROVISION BEFORE THE LEARNED C OMMISSIONER OF INCOME TAX , FARIDABAD. T HE ASSESSEE WAS ASKED TO FILE CERTAIN INFORMATIONS / DETAILS / COPIES OF THE DOCUMENTS. THE ASSESSEE ATTENDED THE PROCEEDINGS BEFORE THE LEARNED COMMISSIONER OF INCOME TAX AND PRODUCED TWO REGISTERS REGARDING PROCEEDINGS / MEETINGS I.E. SANGAM REGISTER AND LOTUS REGISTER REGARDING THE PROCEEDINGS OF THE ASSESSEE SOCIETY FOR CERTAIN PERIOD, BUT THE LEARNED CIT WANTED THE ASSESSEE TO PRODUCE THE PROCEEDINGS REGISTERS SINCE BEGINNING I.E. FROM THE DATE OF THE REGISTRATION. THE LEARNED CIT ALSO NOTED THAT ASSESSEE S COUNSEL SUBMITTED THAT HE WOULD NOT BE HAVING ALL THE REGISTERS, BUT WOULD PRODUCE WHATEVER RECORDS ARE AVAILABLE. THE LEARNED CIT ALSO NOTED THAT ASSESSEE SOCIETY HAS NOT PROVIDED OBJECT - WISE DETAILS OF ACTIVITIES CAR RIED OUT BY THE ASSESSEE SOCIETY IN THE LAST THREE YEARS. IT WAS ALSO NOTICED THAT ASSESSEE HAS GOT CONDUCTE D RAM KATHA GYAN YAG H FROM 8 TH SEPTEMBER, 2013 TO 15 TH SEPTEMBER, 2013 AND THERE WAS ALSO YAG H / HA V AN / BHANDARA . THE ASSESSEE WAS ASKED AS TO HOW IT IS NOT HIT BY PROVISIONS OF CLAUSE (III) UNDER SECTION 80G(5) OF THE I NCOME T AX ACT. THE ASSESSEE EXPLAINED THAT ASSESSEE SOCIETY HAS NOT 3 I. T. APPEAL NO. 6363/DEL/2014 ASSESSMENT YEAR : 2014 15. INCURRED ANY EXPENSES IN THIS PROGRAMME WHEREAS SAID PROGRAMME WAS GOT CONDUCTED BY SANATAN DHARM MAN DIR AND THE ASSESSEE SOCIETY HAS ONLY TAKEN DONATION BY DOING DONATION APPEAL THROUGH THE SAID PROGRAMME. THE ASSESSEE WAS ASKED TO PRODUCE THE BOOKS OF ACCOUNTS FOR LAST THREE YEARS AND COPIES OF THE PROCEEDING REGISTERS, OBJECT - WISE DETAILS OF ACTIVITIES AND DETAILS OF EDUCATION PROVIDED TO POOR CHILDREN UNDER RIGHT TO FREE & COMPULSORY EDUCATION ACT, 2009 WITH FEE RECEIPTS AND EXPENSES . THE ASSESSEE SOCIETY FURNISHED XEROX OF PROCEEDING REGISTER FROM YEAR 2011 ONLY AND ST ATED THAT EARLIER PROCEEDING REGISTER IS NOT AVAILABLE. REGARDING THE PRODUCTION OF BOOKS OF ACCOUNTS , IT WAS STATED THAT ACCOUNTANT HAS GONE TO HIS HOME - TOWN ON OCCASION OF NAVRATR I AND WOULD COME BACK ON 03 RD OCTOBER, 2014. THE ASSESSEE, THEREFORE, SOU GHT TIME TO PRODUCE BOOKS OF ACCOUNTS. IT WAS SUBMITTED THAT BOOKS OF ACCOUNTS WERE PRODUCED AT THE TIME OF GRANT OF REGISTRATION UNDER SECTION 12A OF THE INCOME TAX ACT ALONG WITH AUDITED ACCOUNTS. IT WAS ALSO STATED THAT ASSESSEE IS GIVING FREE EDUCATI ON / BOOKS / DRESS TO THE STUDENTS BELONGING TO WEAKER SECTION OF THE SOCIETY. HOWEVER, ACCORDING TO THE LEARNED CIT, NO DETAILS HAVE BEEN PRODUCED. THE LEARNED CIT NOTED THAT EVEN IF BOOKS HAVE BEEN EXAMINED DURING THE PROCEEDINGS UNDER SECTION 12 A IS NO GROUND FOR NOT PRODUCING THE BOOKS OF ACCOUNTS IN THE PRESENT PROCEEDINGS. BOOKS OF ACCOUNT OF 4 I. T. APPEAL NO. 6363/DEL/2014 ASSESSMENT YEAR : 2014 15. CURRENT YEAR ARE ALSO TO BE EXAMINED. IT IS ALSO NOTED THAT SOME OF THE AIMS AND OBJECTS OF THE ASSESSEE SOCIETY DO NOT FALL UNDER SPECIFIC TERM EDUCATION , RELIEF OF POOR AND MEDICAL RELIEF ETC . THEREFORE, ONUS WAS UPON ASSESSEE TO PROVE THAT IT FALLS IN SECTION 2(15) WHICH HAS NOT BEEN PROVED. IT IS ALSO NOTED THAT MOST OF THE OBJECTS ARE MERELY ON PAPER. THE LEARNED CIT ALSO NOTED THAT ASSESSEE SOCIET Y CONDUCTED YAG H, HA V AN AND RAM KATHA , THEREFORE, APPROVAL UNDER SECTION 80G(5) CANNOT BE GRANTED , BECAUSE INSTITUTION OR FUND IS FOR BENEFIT OF PARTICULAR RELIGIOUS COMMUNITY. SINCE THERE WAS NO CO - OPERATION FROM THE SIDE OF THE ASSESSEE, THEREFORE, LEARNED CIT REJECTED THE APPLICATION FOR GRANT OF APPROVAL UNDER SECTION 80G(5) OF THE INCOME TAX ACT . 2.1 LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW. HE HAS REFERRED TO PAGE 1 OF THE PAPER BOOK , WHICH IS REGISTRATION GRANTED BY LEARNED CIT, FARIDABAD TO ASSESSEE SOCIETY UNDER SECTION 12AA OF THE INCOME TAX ACT, VIDE THE ORDER DATED 29 TH APRIL, 2014. PAGE NO. 80 OF PAPER BOOK IS ASSESSMENT ORDER OF ASSESSEE FOR ASSESSMENT YEAR 2014 - 15 UNDER SECTION 143(3) DATED 25 TH APRIL, 2016 IN WHICH THE ASSESSING OFFICER HAS SPECIFICALLY RECORDED THAT THE ASSESSEE PRODUCED BOOKS, WHICH HAVE BEEN TEST - 5 I. T. APPEAL NO. 6363/DEL/2014 ASSESSMENT YEAR : 2014 15. CHECKED. THE ASSESSEE ALSO PRODUCED RELEVANT DETAILS . THE ASSESSING OFFICER WAS, THEREFORE, SATISFIED TH AT CONDITION LAID DOWN UNDER SECTION 11 READ WITH SECTION 2(15) OF THE INCOME TAX ACT , ARE FULFILLED. THEREFORE, EXEMPTION CLAIMED BY THE ASSESSEE UNDER SECTION 11 WAS GRANTED TO THE ASSESSEE. PAGE NO. 82 OF THE PAPER BOOK IS CHECK - LIST FOR REPORT IN CASES FOR GRANT OF EXEMPTION UNDER SECTION 80G OF THE INCOME TAX ACT DATED 04TH AUGUST, 2014 BY A SSTT . C OMMISSIONER OF INCOME TAX , CIRCLE : II, FARIDABAD IN WHICH THE DEPARTMENT HAS EXPLAINED BEFORE THE LD. CIT THAT ASSESSEE IS DOING CHARITABLE ACTIVITY IN INDIA ONLY AND THE ASSESSEE I NSTITUTION OR FUND HAS MAINTAINED REGULAR ACCOUNTS OF ITS RECEIPT AND EXPENDITURE. THE ASSESSING O FFICER HAS CALLED FOR THE BOOKS AND VOUCHERS AND INSPECTED THE SAME. IT IS ALSO STATED THAT THE ASSESSEE INSTITUTION HAS NOT INCURRED ANY EXPENDITURE DURING ANY PREVIOUS YEAR, WHICH IS OF A RELIGIOUS NATURE FOR AN AMOUNT. PAGE 84 OF THE PAPER BOOK IS S POT ENQUIRY REPORT OF THE INSPECTOR DATED 0 4 TH A U GUST, 2014 GIVING POSI TIVE REPORT IN FAVOUR OF THE ASSESSEE. LEARNED COUNSEL FOR THE ASSESSEE, THEREFORE, SUBMITTED THAT ALL THESE EVIDENCES HAVE BEEN IGNORED AND THE SUBSEQUENT ASSESSMENT ORDER FOR ASSESSMENT YEAR 2014 - 15 DATED 25 TH APRIL, 2016 ALSO SUPPORT THE CLAIM OF THE ASSESSEE. THEREFORE, THE MATTER MAY BE REMANDED TO THE FILE OF THE LEARNED C OMMISSIONER OF INCOME TAX FOR PASSING THE ORDER AFRESH. ON THE OTHER 6 I. T. APPEAL NO. 6363/DEL/2014 ASSESSMENT YEAR : 2014 15. HAND, THE LEARNED SENIOR DEPAR TMENTAL REPRESENTATIVE , THOUGH RELIED UPON IMPUGNED ORDER, BUT SUBMITTED THAT MATTER COULD BE REMANDED TO THE LEARNED CIT, FARIDABAD, FOR PASSING THE ORDER AFRESH. 3. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE ARE OF THE VIEW THAT THE MATTER REQUIRES RECONSIDERATION AT THE LEVEL OF THE LEARNED CIT, FARIDABAD. IT IS NOT IN DISPUTE THAT ASSESSEE SOCIETY HAS BEEN GRANTED REGISTRATION UNDER SECTION 12AA OF THE INCOME TAX ACT VIDE ORDER DATED 29 TH APRIL, 2014. THE APPLICAT ION FOR REGISTRATION WAS FILED ON 09 TH DECEMBER, 2013. THE ASSESSEE, HOWEVER, FILED APPLICATION FOR GRANT OF APPROVAL UNDER SECTION 80G(5) THEREAFTER ON 03 RD APRIL, 2014. THEREFORE, THE LEARNED CIT SHOULD HAVE CONSIDERED THE FACT IN FAVOUR OF THE ASSES SEE THAT ASSESSEE HAS BEEN GRANTED REGISTRATION UNDER SECTION 12AA OF THE INCOME TAX ACT BY HIM CONSIDERING THE ASSESSEE SOCIETY TO BE INVOLVED IN DOING CHARITABLE ACTIVITIES AS CONTAINED UNDER SECTION 2(15) OF THE INCOME TAX ACT. THE ASSESSEE STATED BEFORE THE LEARNED CIT THAT SINCE THE ACCOUNTANT OF THE ASSESSEE HAS GONE TO HIS HOME TOWN ON THE OCCASION OF NAVRATR I AND HE WOULD COME BACK ON 3 RD OCTOBER, 2014 THEREFORE REQUESTED TIME FOR PRODUCTION OF BOOKS OF ACCOUNTS, THE LEARNED CIT SHOULD NOT HAVE PASSED THE ORDER REJECTING THE APPLICATION UNDER 7 I. T. APPEAL NO. 6363/DEL/2014 ASSESSMENT YEAR : 2014 15. SECTION 80 G (5) OF THE INCOME TAX ACT PRIOR TO IT ON 26 TH SEPTEMBER, 2014. THEREFORE, NO FAULT COULD BE FOUND WITH THE ASSESSEE FOR NOT PR ODUCING THE ENTIRE BOOKS OF ACCOUNTS BEFORE THE LEARNED CIT. THE LEARNED CIT ALSO OBSERVED THAT SINCE ASSESSEE SOCIETY GOT CONDUCTED RAM KATHA GYAN YAG H , THEREFORE, IT IS MEANT FOR BENEFIT OF PARTICULAR RELIGIOUS COMMUNITY. HOWEVER, THE ASSESSEE DENIE D TO H AVE INCURRED ANY EXPENSES IN THIS PROGRAMME, BECAUSE IT WAS CONDUCTED BY SANATAN DHARAM MANDIR AND THROUGH THIS PROGRAMME ASSESSEE RECEIVED DONATION. THEREFORE, SUCH EVENT SHOULD NOT BE TAKEN ADVERSE IN NATURE AGAINST THE ASSESSEE. THE ASSESSIN G OFFICER SUBSEQUENTLY FOR ASSESSMENT YEAR 2014 - 15 VIDE ORDER DATED 25 TH APRIL, 2016 UNDER SECTION 143(3) EXAMINED THE BOOKS OF ACCOUNTS OF THE ASSESSEE AND ACCEPTED THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTION 11 OF THE INCOME TAX ACT. IT WOULD MEAN THAT ASSESSEE HAS BEEN INVOLVED IN CHARITABLE ACTIVITIES AS CONTAINED UNDER SECTION 2(15) OF THE INCOME TAX ACT. THE REPORT OF THE ACIT, CIRCLE : II, FARIDABAD, DATED 4 TH AUGUST, 2014 ALSO SUPPORT THE CLAIM OF THE ASSESSEE THAT THE ASSESSEE INS TITUTION OR FUND MAINTAINED REGULAR BOOKS OF ITS RECEIPT AND EXPENDITURE AND THE ASSESSING OFFIC E R INSPECTED THE BOOKS OF ACCOUNTS AND VOUCHERS. IT WAS ALSO REPORTED THAT ASSESSEE INSTITUTION HAS NOT INCURRED ANY EXPENDITURE O F RELIGIOUS IN NATURE. TH E S POT ENQUIRY REPORT OF THE 8 I. T. APPEAL NO. 6363/DEL/2014 ASSESSMENT YEAR : 2014 15. INSPECTOR ALSO SUPPORT THE CLAIM OF THE ASSESSEE FOR GRANT OF AN APPROVAL UNDER SECTION 80G OF THE I NCOME T AX ACT. IT APPEARS THAT THE LEARNED CIT HAS NOT GONE THROUGH ALL THESE MATERIAL ON RECORD IN PROPER PERSPECTIVE AND THE SUBSEQUENT ASSESSMENT ORDER PASSED UNDER SECTION 143(3) ALSO REQUIRES CONSIDERATION BY THE LEARNED CIT, FARIDABAD. IT MAY ALSO BE NOTED HERE THAT AT THE TIME OF APPROVAL UNDER SECTION 80G(5) OF THE INCOME TAX ACT THE ASSESSEE SHALL HAVE TO EXPL AIN THAT INSTITUTION OR FUND IS NOT EXPRESSED TO BE FOR BENEFIT OF ANY PARTICULAR RELIGIOUS COMMUNITY OR CASTE AND THAT THE INSTITUTION OR FUND MAINTAINED REGULAR ACCOUNTS OF ITS RECEIPTS AND EXPENDITURE. SINCE THE ASSESSEE DENIED TO HAVE INCURRED AN Y EXPENDITURE ON RELIGIOUS ACTIVITY FOR ANY PARTICULAR COMMUNITY, THEREFORE, ASSESSEE CANNOT BE PUT TO NEGATIVE ONUS. CONSIDERING THE ABOVE DISCUSSION, WE ARE OF THE VIEW THAT THE LEARNED CIT, FARIDABAD, HAS NOT CONSIDERED THE ISSUE IN PROPER PERSPEC TIVE. THEREFORE, THE MATTER REQUIRES RECONSIDERATION AT HIS LEVEL. WE , ACCORDINGLY , SET ASIDE THE IMPUGNED ORDER AND RESTORE THE MATTER IN ISSUE TO THE FILE OF THE LEARNED C OMMISSIONER OF INCOME TAX , FARIDABAD, WITH DIRECTION TO RE - DECIDE THE MATTER IN ISSUE IN ACCORDANCE WITH LAW BY GIVING REASONABLE SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 9 I. T. APPEAL NO. 6363/DEL/2014 ASSESSMENT YEAR : 2014 15. 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED, FOR STATISTICAL PURPOSES. 5. THE ORDER IS PRONOUNCED IN THE OPEN COURT . SD/ - SD/ - ( L. P. SAHU ) ( BHAVNESH SAINI ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : THE 05 TH OCTOBER, 2017. *MEHTA* COPY OF THE ORDER FORWARDED TO : - 1. APPELLANT; 2. RESPONDENT; 3. CIT; 4. CIT (APPEALS); 5. DR, ITAT, ND. BY ORDER ASSISTANT REGISTRAR DATE DRAFT DICTATED ON 26 .09.2017 DRAFT PLACED BEFORE AUTHOR 05 .10.2017 10 I. T. APPEAL NO. 6363/DEL/2014 ASSESSMENT YEAR : 2014 15. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 05.10.2017 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 05.10.2017 APPROVED DRAFT COMES TO THE SR.PS/PS 05.10.2017 KEPT FOR PRONOUNCEMENT ON 05.10.2017 FILE SENT TO THE BENCH CLERK 05.10.2017 DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER. 11 I. T. APPEAL NO. 6363/DEL/2014 ASSESSMENT YEAR : 2014 15.