M/s Choudhary Charitable Trust, Jammu V. The Commissioner of Income-tax(Central), Ludhiana

ITA 748/ASR/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 95150 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 30-11-2015
• Assessment Year: 2014-2015
• Appeal Filed On: 12-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Charitable institution; Opportunity of being heard; Principle of natural justice
• Section: 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR (JAMMU CAMP; JAMMU ) BEFORE SH. A.D.JAIN, HONBLE JUDICIAL MEMBER AND SH. T.S.KAPOOR, HONBLE ACCOUNTANT MEMBER I.T.A NOS. 748(ASR)/2014 ASSESSMENT YEARS: 2014-15 M/S CHOUDHARY CHARITABLE TRUST, NARWAL BYE PASS ROAD, JAMMU. PAN: AAATC7730P VS. THE COMMISSIONER OF INCOME TAX (CENTRAL), LUDHIANA. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. JOGINDER SINGH (CA. ) RESPONDENT BY: SH. K.V.K. SINGH (DR.) DATE OF HEARING: 04.12.2015 DATE OF PRONOUNCEM ENT: 31.12.2015 ORDER PER T.S.KAPOOR (A.M): THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINS T THE ORDER OF LEARNED CIT, LUDHIANA, PASSED U/S 12AA(1)(B)(II) OF THE INCOME T AX ACT. 2. AT THE OUTSET, THE LEARNED AR SUBMITTED THAT THE LEARNED CIT HAS REFUSED THE REGISTRATION U/S 12A OF THE ACT ON THE BASIS TH AT ASSESSEE COULD NOT FILE ORIGINAL TRUST DEED AND ALSO ON THE BASIS THAT OBJ ECTS OF THE ASSESSEE INCLUDED PROMOTION OF EDUCATIONAL ACTIVITIES OUTSIDE INDIA. THE LEARNED AR INVITED OUR ATTENTION TO GROUND NO.7 OF APPEAL AND SUBMITTED TH AT THE LEARNED COMMISSIONER OF INCOME TAX IN RESPECT OF OBJECTION REGARDING ONE OF THE OBJECTS CONTAINING PROMOTION OF EDUCATIONAL ACTIVIT IES ABROAD HAD NOT PROVIDED 2. ITA NO.74 8 (ASR)/2014 ASST. YEA R 2014-15 OPPORTUNITY OF BEING HEARD AND THEREFORE, THE ORDER PASSED BY HIM IS AGAINST THE PRINCIPALS OF NATURAL JUSTICE. IN VIEW OF THE A BOVE, HE SUBMITTED THAT THE APPEAL MAY BE REMITTED BACK TO LEARNED CIT WHO SHOU LD PASS THE ORDER AFTER HEARING THE ASSESSEE IN THIS RESPECT. 3. THE LEARNED DR HAD NO OBJECTION TO THE PROPOSAL OF THE AR. 4. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT GROUND NO. 7 OF ASSE SSEES APPEAL CONTAINS A SPECIFIC GROUND WHICH IS REPRODUCED AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT, CENTRAL, LUDHIANA HAS ERRED IN REJECTING THE APPLICATION OF THE APPLICANT TRUST FOR REGISTRATION U/S 12A/12AA WITHOUT GIVING ANY OPPORT UNITY OF BEING HEARD FOR OBJECTION RAISED BY THE LD. CIT (CENTRAL) LUDHI ANA IN THE ORDER PASSED BY HIM IN RESPECT OF CLAUSE CONTAINING PROMOTION OF EDUCATION ACTIVITIES ABROAD WHICH IS AGAINST THE PRINCIPLE OF NATURAL JU STICE. WE FURTHER FIND THAT LEARNED CIT HAS PASSED THE ORD ER U/S 12AA BY HOLDING AS UNDER: 7. FROM THE ABOVE, IT IS SEEN THAT OBJECTS OF THE TRUST INCLUDE OBJECTS TO PROMOTE THE EDUCATIONAL ACTIVITIES NOT ONLY IN INDI A BUT ALSO OUTSIDE INDIA. IN MY OPINION, A CHARITABLE TRUST IN ORDER TO GET R EGISTRATION UNDER THE PROVISIONS OF SECTION 12AA(L)(B) OF THE I.T. ACT, 1 961 SHOULD HAVE PROMOTION OF CHARITABLE OBJECTS IN INDIA. HOWEVER, AS ALREADY SLATED, OBJECTS OF THE APPLICANT-TRUST INCLUDE PROMOTION OF EDUCATIONAL ACTIVITIES OUTSIDE INDIA AND THEREFORE IN MY CONSID ERED OPINION, APPLICANT TRUST IS NOT ENTITLED FOR ITS REGISTRATIO N U/S 12AA( 1 )(B) OF THE I T. ACT, 1961. WITHOUT PREJUDICE TO THE ABOVE, IT IS ALSO STATED HERE THAT AS PER PROVISIONS OF SECTION 11(1)(C) OF THE L.T. ACT, 1961 IF A TRUST APPLIES ITS INCOME ON ACTIVITIES OUTSIDE IN DIA IT WILL NOT BE ELIGIBLE FOR EXEMPTION. HOWEVER, THE CBDT CAN GRANT EXEMPTION BY GENERAL OR SPECIAL ORDER UNDER FOLLOWING TWO CIRCUM STANCES - (I) IF THE TRUST IS CREATED BEFORE 01.04.1952 OR (II) IF THE T RUST IS CREATED ON OR AFTER 01.04.1952, IT IS ENGAGED IN PROMOTION OF INT ERNATIONAL WELFARE IN WHICH INDIA IS INTERESTED. APPLICANT-TRUST HAS N OT BROUGHT ON RECORD ANY EVIDENCE TO PROVE THE FACT THAT ESTABLIS HMENT OF EDUCATIONAL INSTITUTIONS AND PROMOTION OF EDUCATION ACTIVITIES 3. ITA NO.74 8 (ASR)/2014 ASST. YEA R 2014-15 OUTSIDE INDIA IS A KIND OF ACTIVITIES WHICH CAN BE REGARDED AS PROMOTION OF INTERNATIONAL WELFARE IN WHICH INDIA I S INTERESTED AND WHETHER CBDT HAS GRANTED ANY EXEMPTION IN THIS REGA RD. FROM THE ABOVE FINDINGS, WE OBSERVE THAT THE ASSESS EE WAS NOT PROVIDED SUFFICIENT OPPORTUNITY OF BEING HEARD TO EXPLAIN IT S OBJECT OF PROMOTION OF EDUCATION ACTIVITIES ABROAD, THEREFORE, IN VIEW OF THE ABOVE THE CASE IS REMITTED BACK TO LEARNED CIT WHO SHOULD PASS THE ORDER AFTER GRANTING ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD. 5. IN VIEW OF THE ABOVE, THE APPEAL FILED BY THE AS SESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST DECEMBER, 2015. SD/- SD/- (A.D.JAIN) (T.S.KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 31.12.2015 PK/PS COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: 2. THE 3. THE CIT(A) 4. THE CIT 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.