TILAK EDUCATION & MEDICAL SOCIETY, Jaipur V. CIT, Jaipur

ITA 810/JPR/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74806 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 18-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUBHASH CHANDRAD R
• Assessee Lawyers: S K GUPTA
• Keywords: Charitable institution; Opportunity of being heard
• Section: 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JAIPUR BENCH JAIPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO. 810/JP/2012 TILAK EDUCATION & MEDICAL, VS. CIT-II, JAIPUR. SOCIETY, JAIPUR. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S.K. GUPTA. DEPARTMENT BY : SHRI SUBHASH CHANDRA-D.R. DATE OF HEARING : 23/01/2014. DATE OF PRONOUNCEMENT : 27/01/2014. O R D E R PER N.K.SAINI, A.M THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDE R DATED 28/09/2012 OF CIT-III, JAIPUR. THE FOLLOWING GROUN DS HAVE BEEN RAISED IN THIS APPEAL: 1. THE ON THE LAW AND FACTS, LD. CIT(III), JAIPUR HAS GROSSLY ERRED IN REJECTING REGISTRATION APPLICATION FILED U/S 12A (A). THE APPLICATION HAS BEEN REJECTED WRONG, ILLEGAL AND WI THOUT ANY BASIS. AS SUCH THE ORDER OF THE LD. CIT(III), JAIP UR DESERVES TO BE QUASHED. 2. THE LD. CIT(III), JAIPUR HAS GROSSLY ERRED IN RE JECTING APPLICATION ON GROUNDS WHICH WERE NOT ASKED TO ASSE SSEE TO EXPLAIN OR TO FILED DETAILS. THE APPELLANT FILED A LL THE INFORMATION AND DETAILS AS AND WHEN ASKED BY THE LD . CIT(III), 2 JAIPUR AS WELL AS LD. A.O., CIRCLE-7, JAIPUR. AS S UCH APPLICATION HAS BEEN REJECTED WRONG, ILLEGAL AND WITHOUT ANY RE CTIFICATION. 3. THE OBJECT OF THE SOCIETY ARE CHARITABLE, HENCE APPLICATION FOR REGISTRATION HAS BEEN REJECTED WRONG AND ILLEGAL. 4. THAT THE ORDER OF LD. CIT(III), JAIPUR IS BAD IN LAW AND DESERVES TO BE QUASHED. 5. THAT THE APPELLANT RESERVES THE RIGHT TO ADD, AM END, WITHDRAW OR ALTER ANY GROUND OF APPEAL BEFORE THE F INALIZATION OF SAID APPEAL. 2 THE ONLY GRIEVANCE OF THE ASSESSEE IN THIS APPEAL RELATES TO THE REJECTION OF APPLICATION FILED FOR REGISTRATION UNDER SECTION 12(A)(A) OF THE I.T.ACT 1961 (HEREINAFTER REFERRED TO AS ACT, IN SHORT). 3. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE FILED AN APPLICATION IN FORM-10A SEEKING REGISTRATION UNDER SECTION 12AA OF THE ACT ON 26/03/2012. THE LD. CIT SOUGHT REPORT O N THE APPLICATION FILED BY THE ASSESSEE AND THE SAME WAS OBTAINED FROM ACIT, CIRCLE-7, JAIPUR WHICH WAS FORWARDED BY THE J CIT, RANGE-7, JAIPUR VIDE LETTER DATED 25/09/2012. LD. CIT, IN P ARA 2 OF THE IMPUGNED ORDER OBSERVED THAT A LETTER NO. 3742 DATE D 28/03/2012 SENT TO THE REGISTERED TRUST WAS RETURNED ON 12/04/ 2012 WITH THE REMARK THAT THE TRUSTEE HAVE LEFT AFTER SELLING TH E PREMISES. HE FURTHER OBSERVED THAT ANOTHER OPPORTUNITY WAS GIVEN VIDE LETTER DATED 12/09/2012 TO THE ASSESSEE TO FURNISH ALL THE DETAILS IN 3 SUPPORT OF ITS CLAIM FOR REGISTRATION/EXEMPTION BY 21/09/2012. ON THE SAID DATE, THE ASSESSEE SUBMITTED THAT THE T RUST WAS RUNNING A MEDICAL DISPENSARY. LD. CITREJECTED THE APPLICATION BY OBSERVING IN PARA 3 & 4 OF THE IMPUGNED ORDER AS UN DER:- 3. A COPY OF THE INCOME & EXPENDITURE ACCOUNT AND BALANCE SHEET AS AT 31/03/2010 & 31/03/2011 WAS FILED. AS PER THESE DETAILS, RECEIPTS BY FEES HAVE BEEN SHOWN AND EXP ENDITURE SHOWN AS INCURRED ON SALARIES, PRINTING, MISC., REPAIRS, CONVEYANCE. THE BALANCE SHEET SHOWS CREDITORS/ADVANCES AGAINST BUI LDING CONSTRUCTION. HOWEVER, NO DETAILS OF THE ACTIVITI ES CARRIED OUT WAS FILED. THE NATURE OF FEES/OTHER EXPENSES WAS NOT E XPLAINED AND NO EVIDENCE OF THE BUILDING SHOWN AS UNDER CONSTRUCTIO N AND/ OR ITS USE FOR THE PURPOSE OF FULFILLING THE STATED OBJECT IVES, HAVE BEEN SUBMITTED. 4. IN ABSENCE OF ANY DETAILS/EVIDENCE OF THE GENUIN ENESS OF ANY CHARITABLE ACTIVITY AS ENVISAGED IN SEC. 2(15) OF T HE ACT, THE APPLICATION FOR REGISTRATION UNDER SEC. 12A CAN NOT SUCCEED, AND IS REJECTED. NOW THE ASSESSEE IS IN APPEAL. 4. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT TH E ASSESSEE IS RUNNING A MEDICAL DISPENSARY AND THE OBJECTS ARE CHARITABLE IN NATURE, BUT THE LD. CIT WITHOUT APPRECIATING THE FA CTS IN RIGHT PERSPECTIVE, REJECTED THE APPLICATION MOVED BY THE ASSESSEE FOR GRANTING REGISTRATION UNDER SECTION 12AA OF THE ACT . IT WAS FURTHER STATED THAT THE AO IN HIS REPORT, HAD NOT MENTIONED ANY ADVERSE COMMENTS REGARDING THE ACTIVITIES, AIMS AND OBJECTS AND GENUINENESS OF THE ASSESSEE-TRUST, AND THAT THE LD. CIT HAS NOT 4 ALLEGED THAT ANY PROFIT HAS BEEN DISTRIBUTED TO ANY MEMBER OF THE SOCIETY AND THEREFORE, THE REJECTION OF APPLICATION FOR REGISTRATION UNDER SECTION 12AA OF THE ACT WAS NOT JUSTIFIED. R ELIANCE WAS PLACED ON THE FOLLOWING CASE-LAWS:- 1. CIT VS. D.P.R. CHARITABLE TRUST [2011] 61 DTR (M P) 410 2. SANJEEVAMMA HANUMANTHE GOWDA CHARITABLE TRUST VS . DIRECTOR OF INCOME TAX (EXEMPTION) [2006] 285 ITR 3 27 (KAR) 3. CIT VS. RED ROSE SCHOOL 212 CTR 394 (ALL) 4. CIT VS. R.M.S. TRUST 326 ITR 310 (MAD) 5. SHRI KRISHAN EDUCATION & WELFARE TRUST VS. CIT 2 7 SOT 331/ 5 ITR 750 (DEL) 6. MODERN DEFENSE SHIKSHAN SANSTHAN VS. CIT 108 TTJ 732 (JD) 7. AGARWAL MITRA MANDAL TRUST VS. DIT (EXMP.) 109 T TJ 128 (DEL) 8. M.K. NAMBYAR SAARC LAW CHARITABLE TRUST VS. UOI & ORS 269 ITR 556 (DEL). 5. IN HIS RIVAL SUBMISSIONS, LD. D.R. SUPPORTED THE O RDER OF THE LD. CIT. 6 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON TH E RECORD. IN THE PRESENT CASE, IT IS NOTICED THAT THE LD. CIT, ALTHO UGH STATED THAT THE AO FORWARDED HIS REPORT THROUGH JCIT, RANGE-7, J AIPUR, BUT HAD NOT DISCUSSED THE CONTENTS OF THE SAID REPORT. THE LD. CIT ON THE ONE HAND STATED THAT A LETTER SENT ON 28/03/201 2 RETURNED 5 BACK ON 12/04/2012, ON THE CONTRARY HE STATED THAT THE REPORT, WAS RECEIVED FROM THE AO VIDE LETTER NO. 785 DATED 25/09/2012 OF JCIT, RANGE-7, JAIPUR. IT IS ALSO NOTICED THAT THE LD. CITASKED THE ASSESSEE TO FURNISH THE DETAILS IN RESPECT OF ITS C LAIM ON OR BEFORE 21/09/2012 AND THE REPORT WAS FURNISHED BY THE JCIT , RANGE-7, JAIPUR ON 25/09/2012. HOWEVER, THE ORDER HAS BEEN P ASSED ON 28/09/2012 WITHOUT DISCUSSING THE REPORT OF THE AO AS WELL AS THE SUBMISSIONS FURNISHED BY THE ASSESSEE. IT, THEREFO RE, APPEARS THAT THE LD. CIT HAS NOT PROVIDED A DUE AND REASONABLE O PPORTUNITY OF BEING HEARD TO THE ASSESSEE. IT IS WELL SETTLED TH AT NOBODY SHALL BE CONDEMNED UNHEARD AS PER THE MAXIM EMBODIED IN THE DICTUM AUDI ALTERM PARTEM . WE, THEREFORE, DEEM IT APPROPRIATE TO REMAND THIS CASE BACK TO THE FILE OF LD. CIT, TO BE ADJUDICATED AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING DUE A ND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 7 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE COURT ON 27 TH JANUARY, 2014). SD/- SD/- (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 27 TH JANUARY, 2014. 6 VR/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD.CIT 4. THE CIT(A) 5. THE D.R BY ORDER ASSISTANT REGISTRAR, ITAT, JAIPUR.