M/s Allengers Care Foundation, Chandigarh V. CIT (Exemptions), Chandigarh

ITA 682/CHANDI/2015

• Counselvise Citation: [2015] 128 COUNSELVISE.COM (IT) 9791 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 01-10-2015
• Assessment Year: 2015-2016
• Appeal Filed On: 10-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUSHIL VERMAN
• Keywords: Opportunity of being heard; Set aside
• Section: 12; 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS.ANNAPURNA MEHROTRA, ACCOUNTANT MEMBER ITA NOS. 682 & 683/CHD/2015 ASSESSMENT YEAR: 2015-16 M/S ALLENGERS CARE FOUNDATION, VS THE CIT (EXEMPTI ONS), SCO 212-14, CHANDIGARH. SECTOR 34-A, CHANDIGARH. PAN: AADTA8698R (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PARIKSHIT AGGA RWAL RESPONDENT BY : SHRI SUSHIL VERMAN DATE OF HEARING : 01.10.2015 DATE OF PRONOUNCEMENT : 09.10.2015 O R D E R PER BHAVNESH SAINI,JM BOTH THE APPEALS BY ASSESSEE ARE DIRECTED AGAINST T HE ORDERS OF LD. CIT(EXEMPTIONS) CHANDIGARH DATED 29.0 5.2015 REJECTING THE APPLICATIONS UNDER SECTION 12AA AND 8 0G(5) OF THE INCOME TAX ACT. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE FILED APPLICATION UNDER SECTION 12A OF THE ACT ON 26.11.2014 BEFORE CIT (EXEMPTIONS) CHANDIGARH. THE CIT AFTER GIVING OPPORTUNITY OF BEING HEARD TO THE ASSE SSEE, NOTED THAT ASSESSEE TRUST WAS REGISTERED ON 06.03.2 013 AND REPRODUCED THE INCOME & EXPENDITURE AND BALANCE SHE ET IN THE IMPUGNED ORDER AND NOTED THAT ASSESSEE HAS MADE AN EXPENDITURE OF RS. 2,79,053/- AGAINST ITS INCOME OF RS. 1,51,250/-. SINCE THERE WERE NO CORPUS FUNDS AVAILA BLE IN 2 THE PREVIOUS YEARS BALANCE SHEET BEING IT A NEW TR UST, ASSESSEE WAS ASKED TO EXPLAIN FROM WHERE EXCESS EXPENDITURE WAS MET. THE ASSESSEE STATED THAT EXCE SS OF THE EXPENSES HAVE BEEN MADE BY ITS MEMBERS BUT THE SAME HAVE NOT BEEN ROUTED THROUGH THE BOOKS OF ACCOUNT. THE CIT (EXEMPTIONS) THEREFORE, NOTED THAT ASSESSEE HAS NOT MAINTAINED ITS BOOKS OF ACCOUNT AS PER ACCOUNTING PROCEDURE AND THEREFORE, HE WAS NOT SATISFIED WITH THE GENUINENESS OF THE TRUST AND ACCORDINGLY, REJECTED THE APPLICATION UNDER SECTION 12AA OF THE ACT. SINCE REGISTRATION APPLICATION WAS REJECTED, THEREFORE, A PPLICATION UNDER SECTION 80G(5)(VI) OF THE ACT WAS ALSO REJECT ED. 3. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PA RTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ASSESSEE EA RLIER FILED APPLICATION FOR REGISTRATION UNDER SECTION 12 AA OF THE ACT AND APPROVAL UNDER SECTION 80G(5)(VI) OF THE AC T. THE SAME WERE REJECTED. NO ACTIVITY WAS CARRIED OUT BY THE ASSESSEE. HE HAS SUBMITTED THAT ASSESSEE PREFERRED APPEAL BEFORE ITAT CHANDIGARH WHO HAS VIDE ORDER DATED 28.04.2014 IN ITA 997/2013 AND 1040/2013 RESTORED T HE MATTER TO THE FILE OF CIT TO PASS THE ORDER AFRESH AND ALLOWED THE APPEALS OF THE ASSESSEE FOR STATISTICAL PURPOSES. HE HAS, HOWEVER, SUBMITTED THAT SINCE TH E TRIBUNAL HAS GIVEN A DIRECTION TO FURNISH DOCUMENTS OF THE ACTIVITIES CARRIED OUT BY THE ASSESSEE TILL 31.3.20 13, THEREFORE, THIS MATTER WAS NOT PRESSED BECAUSE THE ASSESSEE WAS REGISTERED ONLY ON 06.03.2013 AND AS S UCH, 3 ASSESSEE FILED THE PRESENT FRESH APPLICATION FOR REGISTRATION. 4. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT FINDINGS OF THE CIT (EXEMPTIONS) ARE WHOLLY INCORRE CT AND REFERRED TO PB-27 AND 28 WHICH IS INCOME & EXPENDIT URE STATEMENT AND BALANCE SHEET OF THE ASSESSEE TRUST F ROM 01.04.2013 TO 31.03.2014 AND THE SAME INCOME & EXPENDITURE STATEMENT IS ALSO REPRODUCED IN THE IMP UGNED ORDER AND SUBMITTED THAT THE ASSESSEE MET THE DEFIC IT OF CORPUS AMOUNT WHICH IS INTRODUCED BY THE TRUSTEES, WHICH IS ALSO EVIDENT FROM THE BALANCE SHEET OF THE ASSES SEE TRUST. HE HAS ALSO REFERRED TO PB-26 WHICH IS MAIN OBJECTS OF THE TRUST WHICH APPEARS TO BE CHARITABLE IN NATU RE. 5. CONSIDERING THE ABOVE FACTS AND RIVAL SUBMISSION S OF BOTH THE PARTIES, WE ARE OF THE VIEW THE MATTER REQ UIRES RE- CONSIDERATION AT THE LEVEL OF THE CIT (EXEMPTIONS) CHANDIGARH. BALANCE SHEET OF THE ASSESSEE SUPPORTS THE CONTENTION OF LD. COUNSEL FOR THE ASSESSEE THAT ASS ESSEE TRUST MET THE DEFICIT FROM THE CORPUS WHICH IS MENT IONED IN THE BALANCE SHEET, BUT THE CIT (EXEMPTIONS) RECORDE D IN THE IMPUGNED ORDER THAT SUCH AMOUNT HAVE NOT BEEN ROUTE D THROUGH THE BOOKS OF ACCOUNT WHICH IS FACTUALLY INC ORRECT. THE MAIN OBJECTS OF THE TRUST AS REPRODUCED AT PAGE 26 OF THE PAPER BOOK ALSO PRIMA-FACIE SHOW THAT SAME WERE CHARITABLE IN NATURE. THE SAME HAVE NOT BEEN CONSI DERED AND DISCUSSED BY THE CIT (EXEMPTIONS) IN THE IMPUGN ED ORDER, THEREFORE, MATTER REQUIRES RE-CONSIDERATION AT HIS 4 LEVEL. WE, ACCORDINGLY, SET ASIDE THE ORDERS OF AU THORITIES BELOW AND RESTORE BOTH THE MATTERS TO THE FILE OF C IT (EXEMPTIONS) CHANDIGARH WITH DIRECTION TO RE-DECIDE BOTH THE MATTERS AFRESH IN ACCORDANCE WITH LAW BY GIVING REASONABLE SUFFICIENT OPPORTUNITY OF BEING HEARD. T HE CIT (EXEMPTIONS) SHALL TAKE INTO CONSIDERATION THE REQUIREMENTS OF SECTION 12AA OF THE ACT WHILE CONSI DERING THE APPLICATION FOR REGISTRATION AND SHALL SATISFY HIMSELF ABOUT THE OBJECTS OF THE TRUST AND THE GENUINENESS OF ITS ACTIVITIES. 6. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (ANNAPURNA MEHROTRA) (BHAVNESH SA INI) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED 9 TH OCT., 2015. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT/CHD