VANVASI KALYAN ASHRAM PUNJAB,LUDHIANA V. ITO (EXEMPTION), JALANDHAR

ITA 49/ASR/2025

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The case involves Vanvasi Kalyan Ashram, a charitable society, which appealed against the decision of the CIT (Exemptions), Chandigarh, rejecting their application for registration under section 12A(1)(ac)(iii) of the Income Tax Act, 1961. The CIT (Exemptions) had rejected the application on grounds that the society was not carrying out independent charitable activities as per its memorandum of association and had transferred funds between its units in Punjab and Mumbai, which was viewed as not adhering to its stated objectives. The Tribunal found that the rejection was made without issuing a show cause notice or providing an opportunity for the assessee to explain or rebut the findings, leading to the decision to remand the matter for a fresh evaluation.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 711276 (ITAT-AMRITSAR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR (HYBRID COURT) BEFORE SH. MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER AND SH. UDAYAN DASGUPTA, JUDICIAL MEMBER I.T.A. No. 49/Asr/2025 Assessment Year: N.A. Vanvasi Kalyan Ashram Punjab House No. 706, Sector-33, Chandigarh Road, Police Colony, Ludhiana 141010, Punjab [PAN: AAEAV 1644E] (Appellant) Vs. Income Tax Officer (Exemptions), Jalandhar (Respondent) Appellant by Respondent by : : Sh. Subash Jain, C.A. Sh. Jivandeep Singh Kahlon, CIT-DR Date of Hearing Date of Pronouncement : : 01.07.2025 21.07.2025 ORDER Per Udayan Dasgupta, J.M.: This appeal is filed by the assessee against the order of ld. CIT (Exemptions), Chandigarh dated 19.11.2024 rejecting the application for registration u/s 12A(1)(ac)(iii) of the Act filed on 14.06.2024. 2. Grounds of appeal taken by the assessee in Form No. 36 are as follows: Printed from counselvise.com 2 I.T.A. No.49/Asr/2025 Assessment Year: NA “1. That the order of the Learned Commissioner of Income Tax 1 (Exemptions), Chandigarh is bad in law and against facts and circumstances of the case. 2. That order u/s 12AB of the Income-tax Act, 1961 is against law and facts on the file in as much as the rejection of application for registration is without any valid reason and is on the basis of wrong interpretation of law. 3. That order u/s 12AB of the Income Tax Act, 1961 rejecting the application for Registration was passed by the Learned 3 Commissioner of Income Tax (Exemptions), Chandigarh without proper opportunity and without giving any show- cause notice to the appellant. 4. The appellant craves leave to add, amend or delete any of the ground(s) of appeal before it is finally heard.” 3. Brief facts emerging from the record are that the assessee is a charitable society and registered before the Registrar of Firms and Societies under the ‘Societies Registration Act of 1860 (as amended) and is provisionally registered u/s 12A, vide order dated 01.10.2024 valid from assessment years 2022-23 to 2024-25, and has filed for final registration on 14.06.2024 u/s 12A(1)(ac)(iii) of the Act, 1961. 4. During the course of registration, several notices were issued by the ld. CIT(E) raising enquiries on various issues in response to which the applicant as submitted its reply on 12.11.2024 and on a perusal of the documents submitted it has been observed by the ld. CIT(E) that the funds has been transferred from the assessee’s office in Punjab to assessee’s office at Bombay and Jaspur amounting to Rs.32 (thirty two) lacs which, persuaded the ld. CIT(E) to a conclusion that no independent Printed from counselvise.com 3 I.T.A. No.49/Asr/2025 Assessment Year: NA charitable activity is carried out by the assessee as per its memorandum of association, and he also observed that no documentary evidences such as bills and vouchers has been filed in relation to its claim of any charitable activities. 5. As such, the ld. CIT(E) arrived at a conclusion that the society is not performing its activities as per objects contained in the memorandum of association and as such, the application filed by the assessee in Form No. 10AB has been rejected. 6. The ld. AR submitted that all papers and documents as required for the purpose of registration of the society has been filed along with the application and other queries as asked by the registration granting authority has been submitted in the online portal, along with all necessary documentary evidences and all requirements of the notices has been met. However, the ld. CIT(E) before rejection, has not issued any show cause notice, or issued an opportunity of explaining the matter before rejection. He further submitted that the rejection has been made on the grounds that independent charitable activity of the society is not being carried out as per the objects contained in the MoA and has simply rejected the application because of the reason that funds has been transferred from the unit at Ludhiana, (Punjab) to the unit at Mumbai which however does not violate any provisions of the Act. The objects of the society are charitable in nature and there is no deficiency or defect pointed out at Printed from counselvise.com 4 I.T.A. No.49/Asr/2025 Assessment Year: NA any stage by virtue of which a violation can be recorded which may entitle the disallowance of registration. 7. As such, he prays that since the entire rejection has been done without any opportunity to show cause and to rebut the findings of the ld. CIT(E), he prays that an opportunity may please be allowed to explain the case before the ld. CIT(E) and requested for remanding the matter back to the ld. CIT(E) for considering the registration application afresh as per provisions of law. 8. The ld. DR relied on the order of the ld. CIT(E) but could not point out any technical lacunae or any violation of any provisions of the Act and has no objection if the matter is remanded back to the files of the ld. CIT(E) for fresh consideration. 9. We have heard the rival submissions and considered the materials on record and we find that in the instant case, the ld. CIT(E) has rejected the application on the ground that no independent charitable activity has been done by the society as per its MoA and it has transferred funds from its unit at Punjab to its Bombay and Jaspur office. Moreover, it is also observed that the proper bills and vouchers as requested by the ld. CIT(E) has not been produced. 10. As such, in the interest of justice, we remand the matter back to the files of the ld. CIT(E) to consider the application for registration afresh, considering the fact that Printed from counselvise.com 5 I.T.A. No.49/Asr/2025 Assessment Year: NA no show cause notice has been issued and the assessee never had the opportunity to rebut the findings of the ld. CIT(E). 11. The assessee is also directed to file all necessary documentary evidences and explanations before the ld. CIT (E) and to fully cooperate in the registration proceedings. The assessee to be allowed proper opportunity of being heard. 12. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in accordance with Rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1963 as on 21.07.2025 Sd/- Sd/- (Manoj Kumar Aggarwal) (Udayan Dasgupta) Accountant Member Judicial Member *GP/Sr.PS* Copy of the order forwarded to: (1)The Appellant: (2) The Respondent: (3) The CIT concerned (4) The Sr. DR, I.T.A.T True Copy By Order Printed from counselvise.com "