M/s Aggarwal Sabha (Regd.), Ambala City V. CIT (Exemptions), Chandigarh

ITA 91/CHANDI/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6813 (ITAT-CHANDIGARH)
• Duration Of Justice: 8 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2015-2016
• Appeal Filed On: 09-01-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SANDEEP DAHIYA
• Keywords: Earning of tax free income; Benefit of exemption; Set aside
• Section: 11; 12A; 12AA; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH A, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS.ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NOS.91 & 92/CHD/2017 (ASSESSMENT YEARS : 2015-16 & 2017-18) AGGARWAL SABHA (REGD.), VS. THE C.I.T.(EXEMPTIONS), VIKAS VIHAR, SECTOR - 17E, AMBALA CITY. CHANDIGARH. PAN: AAETA5488J (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ROHIT GOEL, CA RESPONDENT BY : SHRI SANDEEP DAHIYA, CIT DR DATE OF HEARING : 26.07.2017 DATE OF PRONOUNCEMENT : 28.09.2017 ORDER PER ANNAPURNA GUPTA, A.M. : THESE TWO APPEALS HAVE BEEN PREFERRED BY THE SAME ASSESSEE AGAINST SEPARATE ORDERS OF LD. COMMISSIONE R OF INCOME TAX(EXEMPTIONS) (HEREINAFTER REFERRED TO AS CIT(E), CHANDIGARH DATED 26.2.2015 AND 27.10.2016 RELATING TO ASSESSMENT YEARS 2015-16 AND 2017-18, INVOLVING COM MON ISSUE I.E. REJECTION OF GRANT OF REGISTRATION U/S 1 2A OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. AT THE OUTSET, IT MAY BE STATED THAT DURING THE COURSE OF HEARING BEFORE US LD. COUNSEL FOR THE ASSESSEE R EQUESTED FOR WITHDRAWAL OF THE APPEAL IN ITA NO.91/CHD/2017. LD.DR DID NOT OBJECT TO THE SAME. THE APPEAL FILED BY TH E ASSESSEE IN ITA.NO.91/CHD/2017 IS, THEREFORE, TREATED AS DIS MISSED. 3. WE SHALL NOW DEAL WITH THE ASSESSEES APPEAL IN ITA NO.92/CHD/2017. 2 4. THE ASSESSEE HAS CHALLENGED THE DENIAL OF REGIST RATION TO THE ASSESSEE TRUST U/S 12AA OF THE ACT BY THE LD .CIT(E) AND HAS RAISED FOLLOWING GROUNDS: 1. THE LEARNED COMMISSIONER OF INCOME TAX (EXEMPTIONS) HAS ERRED IN LAW AND FACTS AND LAW IN NOT REGISTERING THE APPLICANT TRUST U/S 12AA. 2. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR TO SUBSTITUTE THE ABOVE GROUNDS OF APPEAL EITHER BEFORE OR AT THE TIME OF HEARING OF CASE. 5. BRIEFLY STATED, THE ASSESSEE HAD FILED AN APPLIC ATION SEEKING REGISTRATION U/S 12A OF THE ACT IN FORM NO. 10A. THE APPLICATION REVEALED THAT THE SOCIETY WAS AN ON GOING ENTITY THAT HAD BEEN IN OPERATION SINCE 6.1.2015. DURING ASSESSMENT PROCEEDINGS BEFORE THE LD.CIT(E) ALL NEC ESSARY DOCUMENTS AND SUBMISSIONS AS CALLED FOR WERE FILED BY THE ASSESSEE WHICH INCLUDED MEMORANDUM OF ASSOCIATION O F SOCIETY. THE SAID DOCUMENTS REVEALED THE AIMS AND OBJECTS OF THE SOCIETY AS UNDER: 4. ALMS AND OBJECTS OF THE SOCIETY A) TO DISTRIBUTE THE BOOKS IN THE STUDENTS OF BPI FAMILIES. B) TO RUN SHORT TERMS COURSES LIKE TAILORING, B EAUTICIAN ETC. FOR GIRLS AND WOMAN. C) TO TRY THE REMOVE OF VILLAGES PROBLEMS LIKE STREE T WATER ETC. TRICITY ETC. D) PROMOTION OF ARTS EDUCATION, COMPUTER EDUCATION , HEALTH & PARAMEDICAL EDUCATION, SCIENCE, LITERATURE, PHILOSOPHY, REGLIGION, INDUSTRIES, SKILL, DEVELOPMENT, FINE ARTS ETC. E) INSTRUCTION AND DIFFUSION OF ANY USEFUL KNOWLEDGE. F) TO WORK FOR THE CAUSE OF ENFORCEMENT OF PROHIBIT ION AND INITIATE PEOPLES MOVEMENT AGAINST SMOKING ALCOHOLISM AND DRUG ABUSE. 3 G) TO CREATE AWARENESS AND ADDRESSING SOME OF THE S OCIAL EVILS SUCH AS FEMALE FETICIDE, DOWRY, EXTRAVAGANT, EXPENDITURE ON SOCIAL FUNCTIONS LIKE MARRIAGES, EMPOWERMENT OF WOMEN IN DECISION MAKING ETC. H) ESTABLISHMENT OR MAINTENANCE OF LIBRARIES OR R EADING ROOMS. I) TO RAISE OR ACQUIRE FUNDS OR PROPERTY (MOVABLE & IMMOVABLE) FROM CENTRAL OR STATE GOVT, NON GOVERNMENT AGENCIES BYWAY OF DONATION/GRANTS-OR CONTRIBUTION FOR SABHA, CONSTRUCT MAINTAIN & RUN PU BLIC UTILITY INSTITUTION FOR THE BENEFITS OF GENERAL PUBLIC SUCH AS BHAWAN/DHARAMSHALA, DISPENSARY &.OTHER LIKE DEEMED NECESSARY FROM TIME TO TIME OR ALL THE PURPO SE OR OBJECTS. 6. THE LD.CIT(E) AFTER PERUSING THE DOCUMENTS FILED BEFORE IT AND SUBMISSIONS MADE BY THE ASSESSEE HELD THAT THE GENUINENESS OF THE ACTIVITIES OF THE SOCIETY CO ULD NOT BE CORROBORATED WITH THE STATED AIMS AND OBJECTS FOR T HE FOLLOWING REASONS: A) IT APPEARED FROM THE ACCOUNTS THAT THE MAIN FOCU S OF THE ASSESSEE WAS ON CREATION OF FIXED ASSET I.E. LAND AND BUILDING. B) THAT IN EARLIER YEARS IT HAD BEEN CLAIMING MAJOR EXPENSES ON ACCOUNT OF AGGARSEN JAYANTI CELEBRATION WHICH IS A FUNCTION ORGANIZED BY COMMUNITY OF AGGARWALS AND REGISTRATION FOR WHICH HAD BEEN REFUS ED EARLIER AND THE ASSESSEE HAD CHANGED ITS STRATEGY A ND HAD CLAIMED THE SAME ON ACCOUNT OF MISCELLANEOUS EXPENSES. C) THE PERSONS FROM WHOM LOANS WERE TAKEN FOR PURCHASE OF LAND AND BUILDING WERE RESTRICTED TO COMMUNITIES WHICH WERE FOLLOWERS OF BHAGWAN 4 AGGARSEN WHICH LED TO THE CONCLUSION THAT ONLY PERS ON OF A PARTICULAR COMMUNITY HAD CONTRIBUTED SO THAT T HEY COULD ORGANIZE THEIR FESTIVAL LIKE AGGARWAL JAYANTI . D) THAT BANK STATEMENTS REVEALED THAT MOST OF THE CREDITS WERE IN CASH WHICH WAS IN VIOLATION OF SECT ION 269SS OF THE ACT. E) NO EXPENSES WERE INCURRED ON ACCOUNT OF THE STATED OBJECTS OF THE ASSESSEE TO RUN A DISPENSARY AND ADOPT 50 POOR CHILDREN FOR PAYING THEIR SCHOOL FEES EVERY YEAR AND ALSO PROVIDING SCHOLARSHIP FOR GETTI NG MERIT IN 10 TH AND 12 TH FOR HARDWORKING CHILDREN. F) THE TOTAL RECEIPTS SHOWN IN THE RECEIPT AND PAYMENT ACCOUNT DID NOT MATCH WITH THAT SHOWN IN TH E BANK STATEMENTS AND SIMILARLY THE PAYMENTS MADE TO HUDA DID NOT MATCH WITH THAT SHOWN IN THE BANK STATEMENT AND SEVERAL OTHER SUCH DISCREPANCIES BETWEEN THE ACCOUNT BOOKS OF THE BANK STATEMENTS. 7. THE RELEVANT FINDING OF THE LD.CIT(E) AT PARAS 6 TO 9 OF HIS ORDER IS AS UNDER: 6. ON 19.10.2016 SH. KARAN JAIN, C.A, AND SH. RAMESH SINGLA, PRESIDENT OF THE FILED RESPONSE TO THE SHOW- CAUSE LETTER DATED 13.10.2016. ON PERUSAL OF ACCOUNTS IT REVEALS THAT MAIN FOCUS OF THE SOCIETY IS ON CREATI ON OF FIXED ASSETS I.E LAND & BUILDING. BOOKING OF EXPENS ES ON ACCOUNT OF CHOWKIDAR CORROBORATES THE INTENTION OF THE APPLICANT. ON PERUSAL OF ACCOUNTS IT REVEALS THAT PRIOR TO F.Y. 2015-16 THE APPLICANT SOCIETY WAS CLAIMING MAJOR EXPENSE ON ACCOUNT OF AGGARSAIN JAYANTI EXPENSE WHICH IS A FUNCTION BEING SPECIFICALLY ORGANIZED BY COMMUNITY OF AGGARWALS AND ON THIS GROUND THE EARLIER APPLICATION FOR REGISTRATION WAS REJECTED BY THIS OFFICE. NOW THE APPLICANT HAS CHANGED THE STRATEGY AND CLAIMED THE SAME ON ACCOUNT OF MISC. EXPENSES THOUG H THE SAME IN THE ABSENCE OF ANY DOCUMENTARY EVIDENCE 5 COULD NOT BE ACCEPTED. MOREOVER THE PERSONS FROM WH OM THE LOANS WERE TAKEN FOR PURCHASE OF LAND BUILDING AR E RESTRICTED TO COMMUNITIES WHICH ARE FOLLOWERS OF BHAGWAN AGGARSAIN WHICH LEADS ONE TO CONCLUDE TH AT PEOPLE OF PARTICULAR COMMUNITY WITH AN INTEREST TO C REATE AN BUILDING HAS CONTRIBUTED SO THAT THEY COULD ORGA NIZE VARIOUS FESTIVAL LIKE AGGARSAIN JAYANTI ETC. IT IS PERTINENT TO MENTION BANK STATEMENT REVEALS THAT MOST OF CREDIT S ARE IN CASH WHICH COMPULSORILY NEEDS TO BE THROUGH CHEC K OR DRAFT AS THE AMOUNT INVOLVED IN MORE THAN 20,000/- WHICH IS AGAIN VIO0LATION OF SECTION 269SS OF INCOME TAX ACT, 1961. NOTWITHSTANDING THE ABOVE THE PREDOMINANC E OF CASH TRANSACTIONS IN THE ABSENCE OF FURTHER DETA ILS TO THAT EXTENT FURTHER EXACERBATES THE CASE OF THE APPLICANT AS THE GENUINENESS OF SUCH TRANSACTIONS DO N'T GET CORROBORATED. 7. AS REGARDS THE ACTIVITIES THE APPLICANT STATED T HAT APPLICANT IS SUCCESSFULLY RUNNING A DISPENSARY AND EVERY YEAR AGGARWAL SABHA ADOPTS 50 POOR CHILDREN FOR PAYING THEIR SCHOOL FEES. HOWEVER NO EXPENSE WHICH COULD SUBSTANTIATE BOTH OF THE CLAIMS HAS BEEN SHOWN IN THE INCOME & EXPENDITURE ACCOUNT. SIMILARLY THE CLAIM OF THE APPLICANT THAT EVERY YEAR IT IS PROVI DING SCHOLARSHIP FOR GETTING MERIT IN 10 TH AND 12 TH TO HARDWORKING CHILDREN IS AGAIN NOT BACKED UP BY EVIDENCE THAT COULD CORROBORATE THE CLAIMS OF THE APPLICANT. 8. MOREOVER, PERUSAL OF AUDITED ACCOUNTS REVEALS TH AT AS ON 31.03.2014 THE TOTAL RECEIPTS SHOWN IN RECEIPTS AND PAYMENT ACCOUNT WAS 1830,81 ~T I - THOUGH AS PER THE BANK STATEMENT THE RECEIPTS WERE 20,74,024/-. SIMILARLY THE PAYMENT MADE FOR HUDA PLOT WAS BOOKED AT RS. 3,30 ,194/- WHEREAS THE BANK STATEMENT REVEALS THE SUM AS RS. 9,90,694/-. ALL THESE DISCREPANCIES IN THE ACCOUNTS DO NOT BOLSTER THE CASE OF THE APPLICANT. SIMILARLY AN EXAMINATION OF VARIOUS PAYMENTS CLAIMED FURTHER REVEALS THAT NONE OF THE EXPENSES GET CORROBORATED TO HAVE BEEN MADE THROUGH THE BANK ACCOUNT. THIS ISSUE ALSO GETS EXACERBATED BY THE FACT THAT IN F.Y 2014-15 NO PAYMENT ON ACCOUNT OF HUDA HAS BEEN SHOWN IN BANK ACCOUNT THOUGH THE SAME WAS BOOKED IN RECEIPT AND PAYMENT ACCOUNT. 9. IN THE INSTANT CASE, GIVEN THE ABOVE, THERE IS NO WAY THE GENUINENESS OF ACTIVITIES OF THE SOCIETY CAN BE CORROBORATED WITH THE STATED AIMS AND OBJECTS. MOREOVER, THE C OF THE APPLICANT HAD BEEN REJECTED EARLIER AND NO FRESH GROUNDS HAVE BEEN PROJECTED THA T WOULD NECESSITATE EXAMINATION OF THE CASE AFRESH. THIS WOULD AMOUNT TO SUBVERSION OF THE JUDICIAL PROCESS THAT ENTAILS APPEALS AGAINST ORDERS OF REJECTION. THE APPLICATION UNDER SECTION 12A FOR GRA NT OF REGISTRATION IS ACCORDINGLY REJECTED. 8. AGGRIEVED BY THE SAME THE ASSESSEE HAS FILED PRE SENT APPEAL BEFORE US. THE LD. COUNSEL FOR ASSESSEE HAS CHALLENGED THE REJECTION OF REGISTRATION STATING TH AT THE REASONS FOR REJECTION DO NOT MAKE THE ACTIVITIES OF THE 6 ASSESSEE TRUST INGENUINE. THE LD. COUNSEL FOR ASSE SSEE POINTED OUT THAT THE REASONS ENUMERATED BY THE LD.C IT(E) DEALING WITH THE DISCREPANCIES IN THE BOOKS OF ACCO UNT VIS- -VIS THE BANK STATEMENT OR PERTAINING TO VIOLATION OF PROVISIONS OF SECTION 269SS OF THE ACT CAN BE MATTE RS TO BE TAKEN INTO CONSIDERATION WHILE COMPUTING THE EXEMPT INCOME OF THE ASSESSEE AS PER PROVISIONS OF SECTION S 11 AND 12 OF THE ACT BUT CANNOT BE CONSIDERED FOR THE PURP OSE OF DETERMINING THE GENUINENESS OF THE ACTIVITIES OF TH E ASSESSEE TRUST FOR GRANTING REGISTRATION. SIMILARL Y, LD. COUNSEL FOR ASSESSEE STATED THAT THE ALLEGATION THA T THE ASSESSE WAS INCURRING EXPENSES ON CELEBRATIONS WHIC H WERE ORGANIZED FOR THE BENEFIT OF A SPECIFIC COMMUNITY W AS BASELESS. THE LD. COUNSEL FOR ASSESSEE POINTED OUT THAT IN EARLIER YEARS WHEN THE EXPENSES WERE BOOKED ON ACCO UNT OF AGGARSAIN JAYANTI CELEBRATION I.E. IN THE YEAR ENDI NG 31.3.2013 AND 31.3.2014, THE DETAILS OF SUCH EXPENS ES NO WHERE BROUGHT OUT THIS FACT THAT THE EXPENSES WERE INCURRED TO BENEFIT THE MEMBERS OF A PARTICULAR COMMUNITY ON LY. THE LD. COUNSEL FOR ASSESSEE POINTED OUT FROM THE DETAI LS PLACED AT PAPER BOOK PAGE NO.24 FOR THE YEAR ENDING 31.3.2 013 AND AT PAPER BOOK PAGE NO.31 FOR THE YEAR ENDING 31.3.2 014 THAT IT INDULGED IN INCURRING EXPENSES FOR THE BENE FIT OF PUBLIC AT LARGE INCLUDING DISTRIBUTION OF FRUITS AN D SWEETS TO POOR PEOPLE, RATION TO POOR FAMILY, DISTRIBUTION OF STUDY MATERIAL AND UNIFORM AND BAGS, ETC. THE SAID DETAI LS FOR THE YEAR ENDING 31.3.2013, WHICH IS IDENTICAL FOR T HE ENDING 31.3.2014 ALSO ARE AS UNDER: 7 1. DISTRIBUTION OF STUDY MATERIAL, UNIFORM AND BOOKS 3 5050.00 2. EXPENSES. ON COMPAIGN 8070.00 3. FREE COMPUTER EDUCATION 15000.00 4. EXP. ON INTRODUCTORY MEET 12615.00 5. WORKSHOP EXP. 26480.00 6. PHYSIOTHERAPY /MEDICINE DISTRIBUTION 18000.00 7. FRUITS/SWEETS TO POOR PEOPLE 26500.00 8. RATION TO POOR FAMILIES 19210.00 9. FESTIVAL EXP. 1090.00 ----------------- 162015.00 ------------------- 9. THUS THE LD. COUNSEL FOR ASSESSEE STATED THAT TH E ALLEGATIONS OF THE LD CIT(E) THAT THE ASSESSEE SOCI ETY WAS FOR THE BENEFIT OF A PARTICULAR COMMUNITY WAS WITHOUT A NY BASIS AND OUGHT TO BE REJECTED. EVEN OTHERWISE, THE LD. COUNSEL FOR ASSESSEE STATED THAT EVEN IF IT WAS HELD THAT T HE ACTIVITIES WERE UNDERTAKEN FOR THE BENEFIT OF A PAR TICULAR COMMUNITY THE PROVISIONS OF SECTION 13 WERE ATTRACT ED WHICH PROVIDED THAT THE BENEFIT OF EXEMPTION U/S 11 OF THE ACT WOULD NOT BE GRANTED TO ANY PART OF THE INCOME FROM THE PROPERTY OF A TRUST IF IT IS ESTABLISHED FOR THE BE NEFIT OF ANY PARTICULAR RELIGIOUS COMMUNITY OR CASTE. THE LD. C OUNSEL FOR ASSESSEE POINTED OUT THAT THE PROVISIONS OF SEC TION 13 COME INTO PLAY ONCE THE REGISTRATION U/S 12A HAS BE EN GRANTED AND THE SITUATION ENUMERATED U/S 13 DENYING THE EXEMPTION OF INCOMES CANNOT BE CONSIDERED FOR THE P URPOSE OF GRANT OF EXEMPTION U/S 12A OF THE ACT. IN SUPPOR T, THE LD. COUNSEL FOR ASSESSEE RELIED ON THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT(EXEMPTIONS) VS. M/S SRI SHIRDI SAI DARBAR IN IT A NO.38 8 OF 2017 DATED 27.7.2017. THEREAFTER THE LD. COUNSE L FOR ASSESSEE STATED THAT THE ALLEGATION OF THE LD.CIT(E ) THAT THE ASSESSEE TRUST HAD INCURRED NO EXPENDITURE ON ITS S TATED OBJECTIVES OF RUNNING DISPENSARY OR ADOPTING 50 POO R CHILDREN OR PROVIDING SCHOLARSHIP WAS ALSO FACTUALL Y INCORRECT AND DREW OUR ATTENTION TO THE DETAILS OF AGGARSAIN JAYANTI EXPENSES REFERRED TO ABOVE FOR THE YEARS EN DING 31.3.2013 AND 31.3.2014 AND DETAILS OF MISCELLANEOU S EXPENSES FOR THE YEAR ENDING 31.3.2015 AT PAPER BOO K PAGE NO.38 AND POINTED OUT THEREFROM THAT THE SAID DETAI LS INCLUDED EXPENSES OF STUDY MATERIAL, UNIFORM, BOOKS , FREE COMPUTER EDUCATION, PHYSIOTHERAPY AND MEDICINE DISTRIBUTION. IN VIEW OF THE ABOVE, THE LD. COUNSE L FOR ASSESSEE SUBMITTED THAT ALL THE REASONS ENUMERATED BY THE LD.CIT(E) FOR REFUSING GRANT OF REGISTRATION WERE O F NO CONSEQUENCE AND LD.CIT(E) HAD THEREBY ERRED IN REF USING TO GRANT REGISTRATION U/S 12A OF THE ACT. 10. THE LD. DR ON THE OTHER HAND RELIED UPON THE OR DER OF THE LD.CIT(E). 11. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE DOCUMENTS REFERRED TO BEFORE US. WE FIND MERIT IN T HE CONTENTIONS OF THE LD. COUNSEL FOR THE ASSESSEE. T HE ISSUE BEFORE US PERTAINS TO GRANT OF REGISTRATION U/S 12A AND THE LEGISLATURE HAS PRESCRIBED THE SATISFACTION OF TWO CONDITIONS BY THE GRANTING AUTHORITY WHILE GRANTING REGISTRATI ON; I) WHETHER THE OBJECTS OF THE ASSESSEE ARE CHARITABLE IN NATURE AND; II) WHETHER THE ACTIVITIES UNDERTAKEN ARE GENU INE. IN 9 THE PRESENT CASE WE FIND THAT NO ADVERSE REMARKS HA VE BEEN RECORDED BY THE LD.CIT(E) WITH REGARD TO THE OBJECT S CONTAINED IN THE MEMORANDUM OF ASSESSEE TRUST. MOR EOVER, WE FIND THAT THE REASONS ENUMERATED BY THE LD.CIT(E ) IN HOLDING THAT THE ACTIVITIES OF THE ASSESSEE TRUST W ERE NOT GENUINE IN FACT HAVE NO REFLECTION ON THE GENUINE NESS OF THE ACTIVITIES OF THE ASSESSEE TRUST AT ALL. AS RI GHTLY POINTED OUT BY THE LD. COUNSEL FOR ASSESSEE, MOST OF THE RE ASONS ARE VALID FOR THE PURPOSE OF COMPUTING THE INCOME ELIGI BLE FOR EXEMPTION U/S 11 OF THE ACT, LIKE THE VIOLATION OF CONDITION U/S 269SS OR ANOMALY BETWEEN THE BOOKS OF ACCOUNT A ND BANK STATEMENTS BUT CANNOT BE CONSIDERED RELEVANT F OR REFUSING GRANT OF REGISTRATION U/S 12A SINCE THEY HAVE NO REFLECTION ON THE GENUINENESS OF THE ACTIVITIES CAR RIED OUT BY THE ASSESSEE. FURTHER WE AGREE WITH THE LD. COUNSE L FOR ASSESSEE THAT THE FACT THAT THE ASSESSEE HAD INCURR ED EXPENSES ON AGGARSAIN JAYANTI IN THE FIRST PLACE DO ES NOT ESTABLISH THAT THE ASSESSEE SOCIETY HAS BEEN ESTABL ISHED FOR THE BENEFIT OF A PARTICULAR COMMUNITY ONLY. AS HAS BEEN REVEALED FROM THE INCOME & EXPENDITURE ACCOUNT, BAL ANCE SHEET AND STATEMENT OF AFFAIRS OF THE ASSESSEE TRUS T FOR VARIOUS YEARS, THE EXPENDITURE ON AGGARSAIN JAYANTI IS ONLY OF SMALL PORTION OF THE TOTAL EXPENDITURE INCURRED BY THE ASSESSEE. THUS ON THIS BASIS ALONE IT CANNOT BE SAI D THAT THE ASSESSEE TRUST WAS ESTABLISHED FOR THE BENEFIT OF PARTICULAR COMMUNITY ONLY. EVEN OTHERWISE, WE AGREE WITH THE LD. COUNSEL FOR ASSESSEE THAT EVEN IF HELD SO T HE ASSESSEE IS LIABLE TO BE COVERED UNDER THE PROVISIO NS OF 10 SECTION 13(1)(B) OF THE ACT WHICH OUTLINES SITUATIO NS OR CASES IN WHICH EXEMPTION U/S 11 WOULD NOT APPLY AND PROVISIONS OF SECTION 13 HAVE TO BE LOOKED INTO WHI LE CALCULATING THE EXEMPT INCOME OF THE ASSESSEE U/S 1 1 WHICH IS CALCULATED AFTER THE GRANT OF REGISTRATION U/S 1 2A OF THE ACT. THEREFORE, THESE CONDITIONS CANNOT BE CONSIDE RED FOR THE PURPOSE OF GRANTING EXEMPTION U/S 12A OF THE AC T. THE RELIANCE PLACED BY THE LD. COUNSEL FOR ASSESSEE ON THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT I N THE CASE OF M/S SRI SHIRDI SAI DARBAR (SUPRA) IS APT WHEREIN THE HON'BLE COURT HAS CATEGORICALLY UPHELD THE FINDINGS OF THE TRIBUNAL THAT SECTION 13 WOULD NOT COME INTO PLAY A T THE TIME OF GRANTING REGISTRATION U/S 12A OF THE ACT. MOREOVER, THE ALLEGATIONS OF THE LD.CIT(E) THAT THE ASSESSEE HAS NOT EXPENDED ON ITS STATED OBJECTS OF RUNNING A FREE DI SPENSARY AND ADOPTING CHILDREN FOR EDUCATION HAS ALSO BEEN DEMONSTRATED BEFORE US TO BE FALSE FROM THE FINANCI AL STATEMENT OF THE ASSESSEE TRUST WHICH WAS PRODUCED BEFORE THE LD.CIT(E) ALSO. 12. IN VIEW OF THE ABOVE, WE FIND THAT THE LD.CIT(E ) HAD NO BASIS AT ALL FOR HOLDING THAT THE ACTIVITIES OF THE ASSESSEE TRUST WERE GENUINE AND, THEREFORE, WE SET ASIDE THE ORDER OF THE LD.CIT(E) DIRECTING HIM TO GRANT THE ASSESSEE REGISTRATION U/S 12A OF THE ACT. 13. THE APPEAL OF THE ASSESSEE STANDS ALLOWED 11 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN IT A NO.91/CHD/2017 IS DISMISSED AND THE APPEAL OF THE ASSESSEE IN ITA NO.92/CHD/2017 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (SANJAY GARG) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 28 TH SEPTEMBER, 2017 *RATI* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH