Om Welfare and Educational Trust, Hisar V. CIT(E), Chandigarh

ITA 6505/DEL/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 1704 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 7 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-06-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: misc
• Appeal Filed On: 27-10-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PRAMITA M BISWAS
• Keywords: Charitable institution; Opportunity of being heard; Principle of natural justice
• Section: 80G; 12AA; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: E NEW DELHI BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE, JUDI CIAL MEMBER I.T.A. NO. 6505/DEL/2017 OM WELFARE AND EDUCATIONAL TRUST 2 ND FLOOR, CITY HOSPITAL, AZAD NAGAR, HISAR, HARYANA PAN: AAATO4595L VS CIT(E) SECTOR- 17- E, CHANDIGARH (APPELLANT) (RESPONDENT) APPELLANT BY SH. GAUTAM JAIN, ADV., SH. PIYUSH K. KAMAL, ADV. RESPONDENT BY MS. PRAMITA M. BISWAS, CIT, D.R. ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED AGAINST THE ORDER DATED 31.08. 2017 PASSED BY THE COMMISSIONER OF INCOME TAX (EXEMPTION), CHAN DIGARH U/S 80G(5)(VI) OF THE INCOME TAX ACT, 1961. 2. GROUNDS OF APPEAL READ AS UNDER: 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (EXEMPTIONS) CHANDIGARH HAS GROSSLY ERRED BOTH IN L AW AND, ON FACTS IN NOT GRANTING APPROVAL UNDER SECTIO N 80G(5)(VI) OF THE ACT READ WITH RULE 12AA OF THE IN COME TAX RULES, 1962 VIDE ORDER DATED 31.8.2017 DATE OF HEARING 10 .0 6 . 2019 DATE OF PRONOUNCEMENT 13 .0 6 .2019 2 ITA NO. 6505/DEL/2017 OM WELFARE & EDUCATIONAL TRUST, HISAR 2 2. THAT THE IMPUGNED ORDER HAS BEEN MADE IN AN ARBI TRARY AND WHIMSICAL MANNER AND THAT TOO WITHOUT GIVING AN Y PROPER OPPORTUNITY OF BEING HEARD MUCH LESS A FAIR OPPORTUNITY AND AS SUCH THE ORDER PASSED IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 3. THAT THE LEARNED COMMISSIONER OF INCOME TAX (EXEMPTIONS) HAS FAILED TO APPRECIATE THAT, WHILE E XAMINING THE APPLICATION UNDER SECTION 80G(5)(VI) OF THE ACT , THE SCOPE WAS TO MERELY EXAMINE THE GENUINENESS OF THE ACTIVI TIES OF THE ASSESSEE TRUST AND, WHETHER INCOME RECEIVED BY THE ASSESSEE TRUST IS LIABLE TO BE CONSIDERED UNDER SEC TION 11 AND 12 OF THE ACT AND, NOT WHETHER THE INCOME IS AC TUALLY EXEMPT UNDER SECTION 11 AND 12 OF THE ACT. 4. THAT THE LEARNED COMMISSIONER OF INCOME TAX (EXEMPTIONS) OUGHT TO HAVE INDEPENDENT ENTITLE TO T HE APPLICANT TRUST AND NOT MERELY RELY ON THE NON-FILI NG APPEAL BEFORE HONBLE TRIBUNAL AGAINST ORDER DATED 21.3.20 16 WHICH TOO WAS BASED ON FACTUAL MISCONCEPTION AND, N OT IN ACCORDANCE WITH LAW. IT IS, THEREFORE, PRAYED THAT IT BE HELD THAT THE A PPELLANT IS A CHARITABLE INSTITUTION AND, IS THEREFORE ENTITLED T O REGISTRATION U/S 80G(5)(VI) OF THE ACT. IT BE FURTH ER HELD THAT, THE IMPUGNED ORDER IS NOT BASED ON CORRECT APPRECIA TION OF THE STATUTORY PROVISIONS OF LAW AND THUS, THE ORDER IS TOTALLY UNTENABLE BOTH ON FACTS AND IN LAW. 3. THE APPLICANT IS AN ASSOCIATION WELFARE SOCIETY RUNNING EDUCATIONAL INSTITUTION AND MEDICAL FACILITIES. TH E MOTIVE OF THE TRUST IS IMPARTING EDUCATION TO THE CHILDREN AND NO T TO EARN THE PROFITS BUT ONLY THAT OF PHILANTHEROPHIC PURPOSE. THE TRUST IS RUNNING A HIGH SCHOOL AND VOCATIONAL COURSES FOR SK ILL INDIA (ITI) AND DIPLOMA IN POLYTECHNIC COLLEGE AT VILLAGE GARHI TEHSIL HANSI 3 ITA NO. 6505/DEL/2017 OM WELFARE & EDUCATIONAL TRUST, HISAR 3 DISTRICT HISAR (HARYANA). THE TRUST IS AFFILIATED WITH HARYANA STATE BOARD OF TECHNICAL EDUCATION, PANCHKULA. THE TRUST IS ALSO RUNNING A FREE OPD CLINIC AT AZAD NAGAR, HISAR (HAR YANA). THE APPLICATION U/S 80G(50(VI) WAS FILED BY THE APPLICA NT ON 23.02.2017 IN THE OFFICE OF COMMISSIONER OF INCOME TAX (EXEMPT ION) FOR APPROVAL U/S 80G OF THE ACT. REGISTRATION U/S 12AA OF THE ACT WAS GIVEN VIDE ORDER DATED 10.09.2015. THE ASSESSEE SU BMITTED VARIOUS DOCUMENTS AS PER THE REQUIREMENT OF THE APPLICATION U/S 80G APPROVAL. THE COMMISSIONER OF INCOME TAX (EXEMPTIO N) REJECTED THE APPLICATION MADE U/S 80G(5)(VI) OF THE ACT ONLY ON THE GROUND THAT THE APPLICANT HAS NOT FILED ANY APPEAL BEFORE THE TRIBUNAL AS THE EARLIER 80G APPLICATION WAS REJECTED VIDE THE S AID OFFICE ORDER DATED 31.03.2016. 4. BEING AGGRIEVED BY THE ORDER U/S 80G(5)(VI), THE APPLICANT FILED PRESENT APPEAL BEFORE US. 5. THE LD. AR SUBMITTED THAT THE COMMISSIONER OF IN COME TAX (EXEMPTION) ERRED IN NOT APPROVING SECTION 80G(5)(V I) READ WITH RULE 12AA OF THE INCOME TAX RULES, 1962 WITHOUT GIVING A NY PROPER OPPORTUNITY OF BEING HEARD. THE LD. AR FURTHER SUB MITTED THAT THE SCOPE OF THE APPLICATION U/S 80G(5)(VI) WAS TO MERE LY EXAMINE THE GENUINENESS OF THE ACTIVITIES OF THE APPLICANT TRUS T AND WHETHER INCOME RECEIVED BY THE APPLICANT TRUST IS LIABLE TO BE CONSIDERED U/S 11 & 12 OF THE ACT. BUT NOT TO EXAMINE WHETHER THE INCOME IS ACTUALLY EXEMPT U/S 11 & 12 OF THE ACT. THE LD.AR FURTHER SUBMITTED THAT MERELY NON FILING OF APPEAL BEFORE T HE TRIBUNAL 4 ITA NO. 6505/DEL/2017 OM WELFARE & EDUCATIONAL TRUST, HISAR 4 AGAINST THE EARLIER ORDER DATED 21.03.2016 CANNOT B E THE SOLE GROUND FOR REJECTING APPLICATION U/S 80G(5)(VI). 6. THE LD. DR RELIED UPON THE ORDER OF THE COMMISSI ONER OF INCOME TAX (EXEMPTION) AND SUBMITTED THAT THE COMMI SSIONER OF INCOME TAX (EXEMPTION) HAS TAKEN DUE RECOURSE OF TH E EARLIER ORDER, WHICH WAS NOT CHALLENGED BY THE ASSESSEE/APPLICANT TRUST BEFORE ANY FORUM. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL T HE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS PERTINENT TO N OTE THAT THE ASSESSEE WAS GRANTED REGISTRATION U/S 12AA VIDE ORD ER DATED 10.09.2015. THE EARLIER APPLICATION FOR APPROVAL U /S 80G WAS REJECTED VIDE ORDER DATED 21.03.2016 ON THE GROUND THAT RECEIPT AND PAYMENT ACCOUNT WHICH WAS SPECIFICALLY ASKED WAS NO T FURNISHED. THE APPLICANT TRUST WHILE MAKING A FRESH APPLICATIO N HAS SUBMITTED ALL THE REQUIRED DOCUMENTS IN FEBRUARY, 2017 WHICH WAS NOT AT ALL TAKEN COGNIZANCE BY THE COMMISSIONER OF INCOME TAX (EXEMPTION). THE COMMISSIONER SHOULD HAVE TAKEN COGNIZANCE ABOUT THE DOCUMENTS PLACED BEFORE HIM AND AFTER GOING THROUGH THE DOCUMENTS SHOULD HAVE DECIDED THE APPLICATION ON ME RIT, BUT COMMISSIONER FAILED TO DO SO. THEREFORE, WE ARE OF THE OPINION THAT THE MATTER MAY BE RESTORED TO THE FILE OF THE COMMI SSIONER OF INCOME TAX (EXEMPTION) FOR TAKING COGNIZANCE OF THE APPLICATION ALONG WITH THE DOCUMENTS SUBMITTED BY THE APPLICANT TRUST AND AFTER GOING THROUGH THE APPROPRIATE ORDER MAY BE PA SSED 5 ITA NO. 6505/DEL/2017 OM WELFARE & EDUCATIONAL TRUST, HISAR 5 ACCORDINGLY. THEREFORE, APPEAL OF THE APPLICANT TR UST IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. 8. IN THE RESULT, THE APPEAL OF THE APPELLANT IS PA RTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH JUNE, 2019 . SD/- SD/- (N.K. BILLAIYA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 13/06/2019 * KAVITA ARORA COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 6 ITA NO. 6505/DEL/2017 OM WELFARE & EDUCATIONAL TRUST, HISAR 6 DATE DRAFT DICTATED ON 13.6.2019 DRAFT PLACED BEFORE AUTHOR 13.6.2019 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. APPROVED DRAFT COMES TO THE SR.PS/PS 1 3 . 6 . 2 0 1 9 KEPT FOR PRONOUNCEMENT ON & ORDER UPLOADED ON : 1 3 . 6 . 2 0 1 9 14.6.2019 FILE SENT TO THE BENCH CLERK 1 4 . 6 . 2 0 1 9 DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.