Satidevi Sansthan, Nashik V. Commissioner of Income-tax, (Exemption), Pune

ITA 811/PUN/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 9763 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 28-04-2021
• Assessment Year: misc
• Appeal Filed On: 27-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 12A; 12AA; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE (THROUGH VIRTUAL COURT) BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, J UDICIAL MEMBER . / ITA NO. 811 /PUN/201 9 SATIDEVI SANSTHAN, A/P, WADANGLI, TAL. - SINNAR, NASHIK 422103 PAN : AALTS1864K ....... / APPELLANT / V/S. CIT, EXEMPTION, PUNE / RESPONDENT ASSESSEE BY : SHRI MAHAVIR ATAL REVENUE BY : SHRI DEEPAK GARG / DATE OF HEARING : 0 9 - 07 - 2021 / DATE OF PRONOUNCEMENT : 26 - 07 - 202 1 / ORDER PER S.S. VISWANETHRA RAVI, JM : THIS APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 29 - 03 - 2019 PASSED BY THE COMMISSIONER OF INCOME TAX ( EXEMPTION), PUNE WHEREIN HE REJECTED THE APPLICATION FILED SEEKING REGISTRATION U/S. 12AA OF THE ACT. 2. THE ASSESSEE RAISED AS MANY AS 5 GROUNDS AMONGST WHICH THE ONLY ISSUE EMANATES IS AS TO WHETHER THE CIT(EXEMPTION) JUSTIFIED IN REJECTING THE APPLICATION FILED SEEK ING REGISTRATION U/S. 12A A OF THE ACT IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 2 ITA NO .811/PUN/2019 3. HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE REGISTERED AS A TRUST UNDER BOMBAY PUBLIC TRUST ACT, 1950 VIDE REGISTRATION NO. A - 552. THE ASSESSEE FILED FORM 10A A SEEKING REGISTRATION U/S. 12A OF THE ACT THROUGH ONLINE ON 20 - 09 - 2018. IN SUPPORT OF SEEKING REGISTRATION THE ASSESSEE ALSO UPLOADED TRUST DEED, COPY OF TRUST REGISTRATION AND FINANCIAL STATEMENTS FOR THE LAST 3 YEARS. IN TH E SAID PROCESS , THE CIT(EXEMPTION) CALLED FOR CERTAIN OTHER INFORMATION VIDE LETTER DATED 25 - 09 - 2018 , IN RESPONSE TO WHICH THE ASSESSEE UPLOADED ITS SUBMISSIONS ON 06 - 12 - 2018. WE NOTE THAT ON EXAMINATION OF INCOME AND EXPENDITURE STATEMENTS , THE CIT(EXEMP TION) FOUND SURPLUS OF RS.1,61,519/ - , RS.2,23,892/ - AND RS.2,59,020/ - AND HELD THAT NO EVIDENCES SHOWING UTILIZATION OF SUCH SURPLUS FUNDS TOWARDS OBJECTS OF THE TRUST. FURTHER, HE HELD NO RETURN OF INCOME AS REQUIRED U/S. 12A(B) OF THE ACT WERE FILED FRO M A.Y. 2018 - 19. WE FIND THAT THE CIT(EXEMPTION) DID NOT FIND THE ACTIVITIES OF THE ASSESSEE TRUST ARE NOT GENUINE AND OBJECTS OF THE TRUST NOT CHARITABLE. THE ONLY CONTENTION WAS THAT NO DETAILS CONCERNING THE SURPLUS IN THE LAST 3 YEARS WERE FILED AND F OR NON - FILING THE SAME HE REJECTED THE APPLICATION SEEKING REGISTRATION U/S. 12A A OF THE ACT. WE FIND THAT THE DUTY CAST UPON , THE CIT(EXEMPTION) UNDER 12A A PROCEEDINGS IS ONLY TO EXAMINE THE OBJECTS OF THE TRUST ARE CHARITABLE IN NATURE OR NOT , BUT EXAMINATION OF FINANCIAL STATEMENTS RELATING TO INCOME AND EXPENDITURE IS , IN OUR OPINION , DUTY OF THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS CLAIMING THE EXEMPTION U/S. 11 OF THE ACT, THEREFORE, REJECTING THE APPLICATION U/S. 12A A OF THE ACT ON TH E BASIS OF NON - SUBMISSIONS OF UTILIZATION OF SURPLUS FUNDS IS NOT WARRANTED AND IS NOT JUSTIFIED. 4. FURTHER, THE CIT(EXEMPTION) MENTIONED ANOTHER REASON FOR REJECTION , IS NON - FILING OF RETURN OF INCOME FROM A.Y. 2018 - 19. WE NOTE THAT THE ASSESSEE FILE D ACKNOWLEDGMENT SHOWING FILING OF RETURN OF INCOME ON 27 - 3 ITA NO .811/PUN/2019 09 - 2018 FOR A.Y. 2018 - 19 AND THEREFORE THE FINDINGS OF CIT(EXEMPTION) TO THE EXTENT THAT THE ASSESSEE DID NOT FILE THE RETURN OF INCOME FROM A.Y. 2018 - 19 IS INCORRECT. IT IS PERTINENT TO NOTE THAT PROCEEDINGS U/S. 12AA AND CLAIMING EXEMPTION U/S. 11 ARE DISTINCT AND SEPARATE PROCEEDINGS. THEREFORE, WE ARE OF THE OPINION , THAT THE IMPUGNED ORDER OF CIT(EXEMPTION) IN REJECTING THE APPLICATION SEEKING REGISTRATION U/S. 12AA OF THE ACT ONLY ON THE GROU ND OF NON - FILING OF DETAILS OF UTILIZATION OF SURPLUS FUNDS IS NOT CORRECT AND IT IS THE DUTY OF AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 5. FURTHER, WE NOTE FROM THE IMPUGNED ORDER AS RIGHTLY POINTED BY THE LD. AR THAT THE CIT(EXEMPTION) DID NOT POINT OUT THE ACTIVITIES OF THE ASSESSEE ARE NON - GENUINE AND HE REJECTED ONLY ON THE GROUND THAT THE ASSESSEE ACCUMULATED FUNDS, DID NOT UTILIZ E THE SAME FOR THE OBJECTS OF THE TRUST. THIS TRIBUNAL IN THE CASE OF SANT ZOLEBABA SANSTHAN CHIKHALI HELD THE ISSUE OF GRANT OF REGISTRATION AND THE ASSESSMENT OF INCOME OF TRUST ARE DISTINCT AND SEPARATE, BY PLACING RELIANCE IN THE CASE OF ANANDA SOCIAL AND EDUCATIONAL TRUST VS. CIT REPORTED IN 272 TAXMAN 7 OF HONBLE SUPREME COURT WHICH HELD THE MANDATE OF THE P ROVISIONS U/S. 12AA OF THE ACT IS TO EXAMINE WHETHER OBJECTS OF THE TRUST ARE CHARITABLE IN NATURE ARE NOT AND THE ACTIVITIES OF THE TRUST ARE GENUINE, BUT HOWEVER, IN THE PRESENT CASE AS DISCUSSED ABOVE THE CIT(EXEMPTION) DID NOT POINT OUT ANYTHING AGAINS T THE OBJECTS AND GENUINENESS OF THE ACTIVITIES OF THE TRUST BUT HOWEVER REJECTED THE REGISTRATION ON THE BASIS OF FINANCIAL STATEMENTS OF THE ASSESSEE FOR THE LAST THREE YEARS BY HOLDING THE ASSESSEE HAS MADE SURPLUS FUNDS. WE FIND THAT IT IS A SETTLED P RINCIPLE THAT THE GRANT OF REGISTRATION AND THE ASSESSMENT PROCEEDINGS OR EXEMPTION U/S. 11 OF THE ACT IS SEPARATE AND DISTINCT. THE PROCESS OF REGISTRATION IS NOT ON OCCASION FOR DECIDING THE ISSUE OF EXEMPTION U/S. 11 OF THE ACT. THE ISSUE OF EXEMPTION CANNOT BE 4 ITA NO .811/PUN/2019 EXAMINED DURING THE PROCESS OF REGISTRATION U/S. 12AA OF THE ACT. THEREFORE, IN OUR OPINION, THE ORDER OF CIT(EXEMPTION) IN DENYING THE REGISTRATION U/S. 12AA OF THE ACT CANNOT BE SUSTAINED AND THE IMPUGNED ORDER IS SET ASIDE. 6. IN VIEW OF THE ABOVE, THE ASSESSEE IS ENTITLED TO HAVE REGISTRATION U/S. 12AA OF THE ACT IN TERMS OF DECISION OF HONBLE SUPREME COURT IN THE CASE OF ANANDA SOCIAL AND EDUCATIONAL TRUST (SUPRA) AS RELIED ON BY THIS TRIBUNAL IN THE CASE OF SANT ZOLEBABA SANSTHAN CHIKH ALI. ACCORDINGLY, WE DIRECT THE CIT(EXEMPTION) TO GRANT REGISTRATION U/S. 12AA OF THE ACT TO THE ASSESSEE FROM THE DATE OF APPLICATION. 7. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH JULY, 2021 . SD/ - SD/ - ( INTURI RAMA RAO ) ( S.S. VISWANETHRA RAVI ) ACCOUNTANT MEMBER JUDICIAL MEMBER / PUNE; / DATED : 26 TH JULY, 202 1 . RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT , EXEMPTION, PUNE 4. , , , / DR, ITAT, B BENCH, PUNE. 5 . / GUARD FILE. // // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE