Shrimati Poorna Devi Memorial Trust, Dehradun V. Commissioner of Income Tax (Exemption), Lucknow

ITA 690/LKW/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0920 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 31-10-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A K BAR
• Assessee Lawyers: DHARMENDRA KUMAR
• Keywords: Charitable institution; Opportunity of being heard; Principle of natural justice
• Section: 12A; 12AA; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A , LUCKNOW BEFORE SHRI. T.S. KAPOOR, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER ITA NO. 690/LKW/2017 ASSESSMENT YEAR: N.A. SHRIMATI POORNA DEVI MEMORIAL TRUST VILLAGE SH ANKARPUR HUKUTMATPUR, VIKASNAGAR DEHRADUN V. CIT (EXEMPTIONS) LUCKNOW T AN /PAN : AAPTS6410H (APP ELL A NT) (RESPONDENT) APP ELL ANT BY: SHRI DHARMENDRA KUMAR, C.A. RESPONDENT BY: SHRI A. K. BAR, CIT (DR) DATE OF HEARING: 16 11 201 8 DATE OF PRONOUNCEMENT: 20 11 201 8 O R D E R PER P ARTHA SARATHI CHAUDHURY, J.M : THIS APPEAL PREFERRED BY THE ASSESSEE EMANATES FROM THE ORDER OF LD. COMMISSIONER OF INCOME - TAX (EXEMPTIONS), LUCKNOW DATED 22/8/2017 AS PER FOLLOWING GROUNDS OF APPEAL: - 1. THAT LEARNED CIT ERR ED IN FACTS AND LEGAL ASPECTS OF THE CASE IN REJECTING THE APPLICATION FOR REGISTRATION UNDER SECTION 12AA OF THE INCOME TAX ACT, 1961. 2. THAT THE OBJECTS OF APPELLANT ARE CHARITABLE IN NATURE AND APPELLANT WAS ENGAGED IN CHARITABLE ACTIVITIES. 3. THAT APPELLANT FORMED ON 05TH MAY 2015, IT STARTED CONSTRUCTIONS OF EDUCATIONAL PREMISES IN FIRST YEAR, ITSELF, I.E A.Y.2016 - 17, AND IT STARTED RUNNING EDUCATIONAL ACTIVITIES IN ITA NO.690/LKW/2017 PAGE 2 OF 5 SECOND YEAR, I.E. A.Y.2017 - 18, HENCE, ACTIVITIES OF APPELLANT ARE GENUINE AND VERI FIABLE. 4. THAT DURING REGISTRATION PROCEEDINGS, APPELLANT PRODUCED FINANCIAL STATEMENTS, BOOKS OF ACCOUNT ALONG WITH VOUCHERS AND OTHER DOCUMENTS AS REQUIRED BY LD.CIT FROM TIME - TO TIME, ACCORDINGLY, AVERMENTS OF LD.CIT IN THE ORDER UNDER APPEAL IS INC ORRECT, AGAINST THE FACTS AND ARBITRARY. 5. THAT PROVISION OF SECTION 13(L)(C) OF THE ACT IS NOT APPLICABLE IN INSTANT CASE. 6. THAT THE APPELLANT SEEKS PERMISSION TO MODIFY AND/OR ADD ANY OTHER GROUNDS OR GROUNDS OF APPEAL AS THE CIRCUMSTANCES OF THE CASE MIGHT REQUIRE OR JUSTIFY. 2 . THE CRUX OF GRIEVANCE OF THE ASSESSEE IN THIS APPEAL IS THE REJECTION OF APPLICATION FOR GRANT OF REGISTRATION UNDER SECTION 12AA OF THE ACT. 3 . THE LD. A.R. OF THE ASSESSEE AT THE TIME OF HEARING APPRISED THE BENCH REGARDING TH E FACTS IN THIS CASE THAT ASSESSEE IS A PUBLIC CHARITABLE TRUST AND HAD FILED AN APPLI CATION FOR REGISTRATION UNDER SECTION 12AA OF THE ACT ON 21/2/2017 BEFORE THE CIT (EXEMPTIONS), LUCKNOW. SUBSEQUENTLY, THE ASSESSEE WAS ACCORDED AN OPPORTUNITY OF BEING HEARD VIDE OFFICE LETTER DATED 05.07.2017 SENT ON THE ASSESSEES A DDRESS PROVIDED BY HIM IN FORM NO.10A, VIA SPEED POST CALLING FOR SPECIFIC QUERIES REGARDING ITS APPLICATION FOR REGISTRATION UNDER SECTION 12A OF THE ACT FOR COMPLIANCE ON 8/8/2017. ON TH AT DATE I.E. 8/8/2017 AUTHORISED REPRESENTATIVE OF THE ASSESSEE APPEARED AND FILED PART REPLY AND SOUGHT ADJOURNMENT FOR 17/8/2017 FOR PRODUCING FINANCIAL STAT EMENTS, BOOKS OF ACCOUNTS, VOUCHERS ETC. FOR THE F.Y. 2016 - 17 AND REPLY REGARDING PROVISIONS OF S ECTION 13(1)(C) READ WITH SECTION 13(3) OF THE INCOME TAX ACT, 1961. ON PERUSAL OF THE MATERIAL ON RECORD, IT WAS ITA NO.690/LKW/2017 PAGE 3 OF 5 FOUND BY THE CIT (EXEMPTIONS) THAT THE LAND BELONGING TO THE TRUST HAS BEEN LEASED OUT TO THE ASSESSEE. THIS ARRANGEMENTS ATTRACT THE PROVISI ONS OF SECTION 13(1)(C) READ WITH SECTION 13(3) OF THE ACT. THE CIT (EXEMPTIONS) OBSERVED THAT THERE IS QUITE A POSSIBILITY THAT UPON TERMINATION OF THE LEASE , THE ASSESSEE TRUST WILL HAVE THE OPTION TO TRANSFER BACK THE LAND AND THE SO CONSTRUCTED PROPER TY BACK TO THE TRUSTEE WHICH AGAIN CREATES A PROBABLE SITUATION WHEREIN THE LEASED PIECE OF LAND TOGETHER WITH THE CONSTRUCTIONS ON IT SOURCED OUT OF THE FUNDS OF THE ASSESSEE TRUST WOULD ULTIMATELY BE HAND ED OVER TO ONE OF THE TRUSTEES . THE CIT (EXEMPTIO NS) AFTER DETAILED OBSERVATIONS , AS APPEARING IN HIS ORDER , REJECTED THE APPLICATION OF THE TRUST FOR REGISTRATION UNDER SECTION 12AA OF THE ACT. 4 . G ROUND NO. 4 OF THE GROUNDS OF APPEAL STATES THAT DURING REGISTRATION PROCEEDINGS, APPELLANT PRODUCED FINANCIA L STATEMENTS, BOOKS OF ACCOUNT ALONG WITH VOUCHERS AND OTHER DOCUMENTS AS REQUIRED BY LD. CIT (EXEMPTIONS) FROM TIME TO TIME, ACCORDINGLY, AVERMENTS OF LD. CIT IN THE ORDER UNDER APPEAL IS INCORRECT, AGAINST THE FACTS AND ARBITRARY . WITH REGARD TO THIS GR OUND, A QUESTI O N WAS PUT FORTH BY THE BENCH TO THE LD. A.R. OF THE ASSESSEE THAT ON WHICH DATE REQUISITE DETAILS REGARDING APPLICATION FOR GRANT OF REGISTRATION WAS FILED WITH THE DEPARTMENT, TO WHICH THE LD. A.R. OF THE ASSESSEE STATED THAT ON 17/8/2017 D ETAILS WERE SUBMITTED TO THE CIT (EXEMPTIONS) AND THE ORDER WAS PASSED ON 22/8/2017 I.E. WITHIN FIVE DAYS FROM THE DATE OF PLACING ALL DOCUMENTARY EVIDENCES. LD. A.R. OF THE ASSESSEE VEHEMENTLY ARGUED THAT THE REASONS ARRIVED AT BY THE CIT (EXEMPTIONS) FO R REJECTING APPLICATION FOR REGISTRATION UNDER SECTION 12AA WAS NOT REASONABLY DEALT WITH , SINCE THE ORDER WAS PASSED WITHIN A SHORT SPAN OF TIME AFTER RECEIVING ALL THE RELEVANT DOCUMENT AND EVIDENCES AND IT WAS NOT POSSIBLE TO ANALYSE WHETHER THE ACTIVIT IES OF THE ASSESSEE - TRUST ARE CHARITABLE IN NATURE OR ITA NO.690/LKW/2017 PAGE 4 OF 5 NOT. LD. A.R. OF THE ASSESSEE, THEREFORE, PRAYED THAT ONE MORE OPPORTUNITY BE PROVIDED TO PRESENT ITS CASE ON MERIT BEFORE THE CIT (EXEMPTIONS), LUCKNOW. THE LD. D.R. CONCEDED TO THE REQUEST OF THE LD . A.R. OF THE ASSESSEE. 5 . WE HAVE PERUSED THE CASE RECORD AND HEARD THE RIVAL CONTENTIONS. AS A MATTER OF FACT , AS IS EVIDENT FROM PAGE 153 OF THE PAPER BOOK, THE DOCUMENTS WERE SUBMITTED TO THE CIT (EXEMPTIONS) FOR EXAMINATION OF THE NATURE AND PURPOSE OF THE ASSESSEE - TRUST ON 17/8/2017 AND THE ORDER REJECTING APPLICATION WAS PASSED ON 22/8/2017. IT IS QUITE POSSIBLE THAT EXAMINATION OF FACTS AND VERIFICATION OF ACTIVITIES OF THE ASSESSEE - TRUST COULD NOT HAVE BEEN DONE CONCLUSIVELY WITHIN SUCH A SHORT SPAN OF TIME. THE ORDER OF CIT (EXEMPTIONS) DOES NOT BRING OUT ANY SPECI FIC DETAIL WHICH CAN SHOW THAT HE HAS ARRIVED AT THE FINDING AFTER ANALYZING VARIOUS DOCUMENTS FURNISHED BY THE ASSESSEE. LD. D.R. COULD NOT BRING ANY NEW MATERIAL ON RECORD TO SUGGEST T HAT CIT (EXEMPTIONS) HAS CONCLUSIVELY ARRIVED AT A FINDING WHILE DEALING WITH EACH OF THE DOCUMENT FURNISHED BY THE ASSESSEE - TRUST. IN VIEW OF THE PRINCIPLES OF NATURAL JUSTICE, WE ARE OF THE CONSIDERED VIEW THAT ANOTHER OPPORTUNITY SHOULD BE PROVIDED TO THE ASSESSEE . WE, THEREFORE, SET ASIDE THE ORDER OF CIT (EXEMPTIONS) AND REMAND THE MATTER BACK TO HIS FILE FOR FRESH ADJUDICATION AFTER PROVIDING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE AND COME OUT WITH A SPECIFIC FINDING AFTER ANALYZING THE D OCUMENTARY EVIDENCES FURNISHED BY THE ASSESSEE AND SUCH FINDING SHOULD REFLE CT THE CORRECTNESS OR INCORRECT NESS OF SUCH DOCUMENTS AS HAVE BEEN FILED BY THE ASSESSEE BEFORE THE CIT (EXEMPTIONS); MEANING THEREBY THERE HAS TO BE A SPEAKING ORDER. WITH THESE DIRECTIONS, THE MATTER IS RESTORED BACK TO THE FILE OF THE CIT (EXEMPTIONS) TO DECIDE THE SAME AFRESH AFTER PROVIDING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. ITA NO.690/LKW/2017 PAGE 5 OF 5 6 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONO UNCED IN THE OPEN COURT ON 20 / 11 / 201 8 . SD/ - SD/ - [ T.S. KAPOOR ] [PARTHA SARATHI CHAUDHURY ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 20 TH NOVEMBER , 201 8 JJ: 1611 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR BY ORDER ASSISTANT REGISTRAR 1. DATE OF DICTATION 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONO UNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER 9. DATE OF DESPATCH OF THE ORDER