Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, DELHIBENCH ‘G’, NEW DELHI
Before: Dr. B. R. R. KumarSh. Yogesh Kumar US
Per Dr. B. R. R. Kumar, Accountant Member:
The present appeals have been filed by the assessee against the orders passed by the CIT(E), Chandigarh dated 31.08.2018.
In the assessee has raised the following grounds of appeal:
“(i) On facts and in law, the learned CIT (E) was wholly unjustified in refusing to grant exemption certificate of exemption u/s 80G of the I.T. Act. (ii) On facts and in law the learned CIT (E) has passed the order refusing to grant exemption without properly appreciating the facts of the case and providing proper opportunity of being heard. (iii) That the learned CIT(E) has failed to pass a speaking order.
(iv) That the learned CIT (E) has failed to appreciate various submissions made before him and therefore the order is bad in law.
(v) That the learned CIT (E) has failed to appreciate the fact that the objects of the association were clearly charitable within the meaning of section 2(15), the company having been formed for pursuing charitable objects.
(vi) That the learned CIT (E) has failed to appreciate the replies filed giving full details for the queries raised by him. CIT (E) has not issued any show cause notice nor intimated the reason to the appellant for rejecting application u/s 80G exemption which is in violation of principles of natural justice; the order is bad in law and is liable to be quashed.
(vii) That the learned CIT (E) has failed to appreciate the fact that in view of the CSR regulation of the Companies Act 2013 the company can establish their own CSR Company and CSR activities have to be carried through these companies hence any linkage is not detrimental to the benefit of the general public.
(viii) That the learned CIT (E) has failed to appreciate the fact that the activities of the company are not restricted but in line with the object of the company and covered under the charitable purpose as defined u/s 2(15) of the Income Tax Act.
(ix) That the learned CIT (E) has failed to appreciate the fact the objects of the company are fully charitable covered u/s 2(15) of the income tax Act. The object of the company such as development of rural villages, provision of good education and healthcare and access to clean water and sanitation are limbs directly covered in the definition of charitable purpose.
(x) That the learned CIT (E) has grossly erred in denying the benefit of exemption to the assessee treating its activities as non charitable. The objects of the company Le; to engage in the smart village development, providing villages with access to sustainable energy services, providing villages with good education and healthcare, access to clean water, sanitation and nutrition are charitable activities under Income tax Act. & 7305/Del/2018 3 Sabka Development Associated (xi) That the learned CIT (E) has grossly erred in not raising any issues to the assessee or giving opportunity to the assessee to reply to his objections and the basis of his objection were never raised to the assessee on which basis he has rejected exemption u/s 80G. On facts and in law and in the circumstances of the appellants case the learned commissioner Exemption erred both in facts and in law in denying exemption u/s 80G of the income tax act 1961 without issuing proper reasons to appellant to respond, and also without affording the appellant an opportunity of being heard on those reasons, which is violative of principle of natural justice, the order is bad in law and liable to be quashed.
(xii) That the learned CIT (E) was wholly unjustified in refusing to grant exemption u/s 80G despite various supporting facts were duly brought to his notice, wherein the charitable activity has been carried on by the assessee.”
In the assessee has raised the following grounds of appeal:
“(i) On facts and in law, the learned CIT (E) was wholly unjustified in refusing to grant exemption certificate of exemption u/s 12AA of the I.T. Act.
(ii) On facts and in law the learned CIT (E) has passed the order refusing to grant exemption without properly appreciating the facts of the case and providing proper opportunity of being heard.
(iii) That the learned CIT(E) has failed to pass a speaking order.
(iv) That the learned CIT (E) has failed to appreciate various submissions made before him and therefore the order is bad in law.
(v) That the learned CIT (E) has failed to appreciate the fact that the objects of the association were clearly charitable within the meaning of section 2(15), the company having been formed for pursuing charitable objects.
(vi) That the learned CIT (E) has failed to appreciate the replies filed giving full details for the queries raised by & 7305/Del/2018 4 Sabka Development Associated him. CIT (E) has not issued any show cause notice nor intimated the reason to the appellant for rejecting application u/s 12A exemption which is in violation of principles of natural justice; the order is bad in law and is liable to be quashed.
(vii) That the learned CIT (E) has failed to appreciate the fact that in view of the CSR regulation of the Companies Act 2013 the company can establish their own CSR Company and CSR activities have to be carried through these companies hence any linkage is not detrimental to the benefit of the general public.
(viii) That the learned CIT (E) has failed to appreciate the fact that the activities of the company are not restricted but in line with the object of the company and covered under the charitable purpose as defined u/s 2(15) of the Income Tax Act.
(ix) That the learned CIT (E) has failed to appreciate the fact the objects of the company are fully charitable covered u/s 2(15) of the income tax Act. The object of the company such as development of rural villages, provision of good education and healthcare and access to clean water and sanitation are limbs directly covered in the definition of charitable purpose.
(x) That the learned CIT (E) has grossly erred in denying the benefit of exemption to the assessee treating its activities as non charitable. The objects of the company Le; to engage in the smart village development, providing villages with access to sustainable energy services, providing villages with good education and healthcare, access to clean water, sanitation and nutrition are charitable activities under Income tax Act.
(xi) That the learned CIT (E) has grossly erred in not raising any issues to the assessee or giving opportunity to the assessee to reply to his objections and the basis of his objection were never raised to the assessee on which basis he has rejected exemption u/s 12A. On facts and in law and in the circumstances of the appellants case the learned commissioner Exemption erred both in facts and in law in denying exemption u/s 12AA of the income tax act 1961 without issuing proper reasons to appellant to respond, and also without affording the appellant an opportunity of being heard on those reasons, which is violative of principle of natural justice, the order is bad in law and liable to be quashed.
(xii) That the learned CIT (E) was wholly unjustified in refusing to grant exemption u/s 12A despite various supporting facts were duly brought to his notice, wherein the charitable activity has been carried on by the assessee.”
The assessee company was incorporated on 16.01.2017 vide CIN No. U85320HR2017NPL067092. The company's registered office is situated at 1038/1039, sector 14, Hissar, Haryana. The company has been incorporated has not for profit company u/s 8 of the Companies Act, 2013 and has started its activities mainly with the following objects.
The primary objects of the company are smart village development, providing villages with access to sustainable energy services, providing villages with good education and health care, access to clean water, sanitation and nutrition, the growth of productive enterprises to boost income and enhance security, gender equality, democratic engagement and providing villages with smart energy and climate change measures.
It has been mentioned in the object clause of the company that none of the objects of the company will be carried out on commercial basis. All the activities of the company are purely for the welfare of the villages and their people without any discrimination of creed or religion.
The assessee company applied before the ld. CIT(E), Chandigarh for the registration of company u/s 12AA of the Income Tax Act, 1961 and u/s 80G(5)(vi) of the Income Tax Act, both were rejected by the ld. CIT(E) on the grounds that the area of operation of the applicant has been restricted to only a few villages adopted by the head of the group in his role & 7305/Del/2018 6 Sabka Development Associated as public representative. We hold that this cannot be a correct reason to reject the registration. We also find that the assessee has been sanctioned registration u/s 12A(1)(ac)(i) of the Income Tax Act from A.Y. 2022-23. Hence, we deem it proper to remand the matter to the file of the ld. CIT(E) to examine the objects afresh and pass a speaking order after affording an opportunity to the assessee.
The main reason for rejection of registration u/s 80G was that the trust/society is not registered u/s 12AA of The Act. Keeping in view the directions above, the ld. CIT(E) shall consider registration u/s 80G de novo.
In the result, the appeals of the assessee are allowed for statistical purpose. Order Pronounced in the Open Court on 28/02/2023.