D.M.CHARITABLE TRUST, JANJGIR-CHAMPA (C.G.) V. C.I.T.(EXEMPTION),

ITA 72/BIL/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2433 (ITAT-RAIPUR)
• Duration Of Justice: 8 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 01-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: YACUB TOPP
• Assessee Lawyers: R B DOSHI
• Keywords: Charitable institution; Opportunity of being heard; Principle of natural justice
• Section: 12A; 12AA; 12

Judgement Text

, RA IPUR IN THE INCOME TA X A PPELLA TE TRIBUNA L, RA IPUR BEFORE S/SHRI MUKUL SHRAW AT ( JM) SHAMIM YAH Y A (AM) , , ./ I.T.A. NO. 72/BIL/2015 D.M.CHARITABLE TRUST, HATRI CHOWK, SAKTI, JANJGIR - CHAMPA, C.G. / VS. CIT (EXEMPTION), HOSHANGABAD ROAD, BHOPAL ./ ./ PAN/GIR NO. : AACTD 0724 C ( / AP PELLANT ) .. ( / RESPONDENT ) / A PPELLANT BY : SHRI R.B.DOSHI / RESPONDENT BY : SHRI YACUB TOPP / DATE OF HEARING : 1 7 - 02 - 2016 / DATE OF PRONOUNCEMENT : 19 - 02 - 2016 / O R D E R PE R MUKUL SHRAWAT, JM THIS IS AN APPEAL FILED BY THE APPELLANT - TRUST ARISING OUT OF ORDER OF THE LD CIT(EXEMPTION), BHOPAL PASSED UNDER SECTION 12 A(1)( B )( II) OF THE INCOME TAX ACT, 1961 DATED 27.3.2015. T HE GROUND RAISED BY THE APPELLANT - TRUST IS REPROD UCED BELOW: IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) ERRED IN REFUSING REGISTRATION U/S.12AA TO THE TRUST OBSERVING THAT THE APPELLANT TRUST HAS NOT FULFILLED THE CONDITIONS FOR REGISTRATION. T HE ORDER OF REJECTION PASSED BY T HE CIT IS ILLEGAL, NOT IN ACCORDANCE WITH LAW. 2 I.T.A. NO. 72/BIL/2015 D.M.CHARITABLE TRUST 2. AT THE OUTSET, WE HAVE BEEN INFORMED THAT PROPER OPPORTUNITY OF HEARING WAS NOT GRANTED BY THE LD CIT(EXEMPTION), BHOPAL. 3. FROM THE SIDE OF THE APPELLANT - TRUST, SHRI R.B.DOSHI, LD A.R. HAS TRIED TO DEMO NSTRATE THAT ALONGWITH APPLICATION FILED UNDER SECTION 12AA OF THE ACT, THE ASSESSEE HAD ENCLOSED FORM - 10A, CERTIFIED COPY OF THE TRUST DEED AND LIST OF OFFICE BEARERS. H E HAS FURTHER INFORMED THAT CERTAIN ENQUIRES WERE MADE B Y THE ITO(EXEMPTION), BILAS PUR. S IMULTANEOUSLY, THERE WERE ENQUIRIES FROM CIT (EXEMPTION), BHOPAL. T HE ASSESSEE WAS UNDER IMPRESSION THAT ONCE THE REQUISITE INFORMATIONS HAVE BEEN GIVEN TO THE REVENUE O FFICER AT BILASPUR, THEN THE PROPER COMPLIANCE WAS MADE. H OWEVER, LD CIT (EXEM PTION), BHOPAL HAS TREATED THE ASSESSEE IN DEFAULT AND REJECTED THE APPLICATION IN THE FOLLOWING MANNER: I HAVE GONE THROUGH THE RECORD AND ALSO CONSIDERED THE REPORTS FURNISHED BY THE INSPECTOR, ASSESSING OFFICER AND THE JT CIT(EXEMPTION), RAIPUR, PLACED ON RECORD CAREFULLY AND AFTER CONSIDERING THE REPORTS AND TAKING INTO CONSIDERATION THE FACTS THAT NO BOOKS OF ACCOUNT HAVE BEEN PRODUCED FOR EXAMINATION, NO SUPPORTING DOCUMENTS EVIDENCING FOR THE CREATION OF THE TRUST AND THE CHARITABLE ACTIVITIES CARRI ED ON BY THE SAID TRUST ARE ON RECORD AND ALSO CONSIDERING THE FACT THAT THERE IS NOTHING ON RECORD IN THE FORM OF DOCUMENTARY EVIDENCES WHICH SATISFIES THE UNDERSIGNED THAT THE CHARITABLE ACTIVITIES ARE BEING CARRIED ON BY THE SAID TRUST AND THEY ARE GEN UINE. I A M OF THE CONSIDERED OPINION THAT THE SAID TRUST IS NOT FULFILLING THE CONDITIONS LAID DOWN U/S.12AA OF THE INCOME TAX ACT AND, ACCORDINGLY, NOT ENTITLED FOR REGISTRATION U/S.12AA OF THE I.T.ACT AT THIS STAGE. C ONSEQUENTLY, THE APPLICATION FILED UNDER SECTION 12A OF THE ACT IS HEREBY REJECTED AND REGISTRATION SOUGHT BY THE APPLICANT UNDER SECTION 12AA OF THE ACT IS REFUSED. 3 I.T.A. NO. 72/BIL/2015 D.M.CHARITABLE TRUST 4. AFTER HEARING THE SUBMISSIONS OF BOTH THE SIDES, WE ARE OF THE CONSIDERED OPINION THAT THE NATURAL JUSTICE DEMANDS TO GR ANT A REASONABLE OPPORTUNITY OF HEARING TO A LITIGANT BEFORE REJECTING HIS CLAIM. I T APPEARS THAT THE FACTS AS NARRATED BY LD A R .. COULD BE CORRECT B ECAUSE IN THE IMPUGNED ORDER PASSED UNDER SECTION 12AA, THE COMMISSIONER (EXEMPTION) HAS MENTIONED THAT THE REGISTRATION APPLICATION U/S.12A WAS RECEIVED IN THE OFFICE OF THE COMMISSIONER, BILASPUR ON 1.9.2014. HOWEVER, AS A RESULT OF RESTRUCTURING, THE APPLICATION OF THE APPELLANT - TRUST WAS TRANSFERRED BY LD CIT, BILASPUR TO THE JURISDICTION OF CIT (EXEMP TION), BHOPAL. AS FAR AS THE PROVISIO NS OF SECTION 12A ARE CONCERNED , IT IS PRESCRIBED THAT THE COMMISSIONER IS REQUIRED TO EXAMINE THE OBJECTS OF THE TRUST AS WELL AS THE GENUINENESS OF THE ACTIVITIES OF THE TRUST. T HE COMMISSIONER IS REQUIRED TO RECORD HIS SATISFACTION IN RESPECT OF OBJECTS AS WELL AS ACTIVITIES OF THE TRUST. T HIS CAN ONLY BE ASCERTAINED AFTER EXAMINING TH E ACCOUNTS ALONGWI TH ACTIVITIES CARRIED ON BY THE TRUST. S INCE IN THIS CASE, THE COMMISSIONER HAS NOT EXAMINED THESE TWO ASPECTS, T HEREFORE, WE ARE OF THE CONSIDERED VIEW THAT IN THE LIGHT OF THE DECISIONS IN THE CASE OF C IT VS. VIJAY VARGIYA VANI CHARITABLE TRUST(2014) 369 ITR 360 (RAJ); FIFTH GENERATION EDUCATION SOCIETY VS CIT ,(1990) 185 ITR 634 (ALL) & CIT VS. AGRICULTURAL PRODU CE AND MARKET COMMITTEE(2007) 291 ITR 4129(BOM), THE APPLICATION WAS WRONGLY REJECTED THAT TOO IN A SUMMARY MANNER. HENCE, THE NATURAL JUSTICE DEMANDS TO REFER THIS ISSUE BACK TO THE STAGE OF LD CIT(EXEMPTION) TO BE DECID ED DENOVO. N EEDLESS TO SAY THE A PPELLANT - TRUST SHALL BE GRANTED ADEQUATE OPPORTUNITY OF BEING HEARD. SIDE BY 4 I.T.A. NO. 72/BIL/2015 D.M.CHARITABLE TRUST SIDE, WE HEREBY DIRECT THE APPELLANT T O BE PRESENT BEFORE THE LD CIT(EXEMPTION) EITHER ITSELF OR THROUGH REPRESENTATIVE WITHIN 30 DAYS ON RECEIPT OF THE ORDER OF THE TRIBUNAL WI THOUT WAITING FOR ANY FORMAL NOTICE OF HEARING WITH ALL NECESSARY DOCUMENTS/EVIDENCES SO THAT THE ISSUE OF REGISTRATION OF TRUST CAN BE DECIDED AT AN EARLY DATE. 5. IN THE RESULT, APPEAL FILED BY THE APPELLANT TRUST IS ALLOWED FOR STATISTICAL PURPOSES. OR DER PRONOUNCED IN THE OPEN COURT ON 1 9 /02/2016 . SD/ - SD/ - ( , ) ( , ) SHAMIM Y AHY A , ACCOUNT ANT MEMBER MUKUL SHRA WA T , JUDICIAL M EM BER RAIPUR , DATED 1 9 / 02 /20 1 6 . . ./ PARIDA , SR. PS / COPY OF THE ORDE R FORWARDED TO : 1. / THE APPELLANT : D.M .CHARITABLE TRUST, HATRI CHOWK, SAKTI, JANJGIR - CHAMPA, C.G. 2. / THE RESPONDENT : CIT (EXEMPTION), HOSHANGABAD 3. ( ) / THE CIT(A) - BILASPUR 4. / CIT 5. , , / DR, ITAT , RAIPUR 6. / GUARD FILE. / BY ORDER, //TRUE COPY// SR. PS, ITAT, CAMP: RAIPUR