DADRA & NAGAR HAVELI AND DAMAN & DIU POLICE WELFARE SOCIETY,NANI DAMAN, DAMAN & DIU vs. CIT, EXEMPTION, AHEMEDABAD, AHMEDABAD

Grounds of appeal

However, Ld. PCIT has rejected the contention of the assessee and observed that assessee society has failed to file the details regarding donations received & paid, Notes on activities conducted since inception and No Objection Certificate from the owner of the premises from which it is operating along with proof of his ownership. Therefore, Ld. PCIT held that no verification of the objects as per the trust deed with the activities carried out, if any, could be made. Thus, the genuineness of the activities does not get established.

Aggrieved by the order of the ld. CIT(E), the assessee is in appeal before us.

We have heard both the parties. Before us, Learned Counsel for the assessee submitted that assessee could not submit certain documents asked by the Ld. CIT(E), vide his notice dated 20.02.2020, as the lock down was going on due to Covid-19 Pandemic. However, later on, the assessee has submitted the required documents and details before the ld. CIT(E), which are as follows:

On the other hand, the Ld. DR for the Revenue has primarily reiterated the stand taken by the Ld. CIT(E), which we have already noted in our earlier para and is not being repeated for the sake of brevity.

We have heard both the parties and perused the material available on record. We note that ld CIT(E) issued a notice dated 20.02.2020 asking the assessee to file certain documents and details which is mentioned therein the notice. In response to the notice, the assessee could not submit details and documents before CIT(E) due to COVID-19 Pandemic. However, later on, in response to notice dated 24.04.2020, the assessee submitted trust deed, copy of objectives of the trust, assessee also submitted rules and regulations of assessee welfare society. The assessee submitted the registration certificate which is placed at paper book page no.19, and submitted the PAN No. of the welfare society which is placed paper book page no.20 of the assessee`s paper book. The assessee submitted an application towards change of name of the assessee society which is placed at paper book page no.21. We note that assessee has submitted before us receipts and payments account for the period ended on 31st March 2017, wherein the assessee welfare society had shown grant of Rs.50,00,000/- received from Government. The assessee submitted the income and expenditure account which is placed at paper book page no.23. The Assessee also submitted the Dadra & Nagar Haveli Police Welfare financial statements, that is, Balance Sheet, Income and Expenditure account, as on 31.03.2017 which is placed at paper book page no.24, and the same financial statements were submitted for the A.Ys.2018-19 and 2019-20 also which are placed at paper book page nos.29-30 of assessee’s paper book. The assessee also submitted the copy of the primary object of the welfare society which is placed at paper book page no.31. Therefore, we note that assessee has submitted the entire details and documents required by the ld CIT(E), hence we note that CIT(E) ought to have grant the registration under section 12AA of the Act.

We are of the view that so far grant of registration under section 12AA of the Act is concerned, the Ld. CIT’s jurisdiction is only to verify the objects of the society and genuineness of the activities. As noted by us, the assessee society has submitted enough documents and evidences to prove activities and objects that these are genuine. We note that Government has provided grant of Rs.50,00,000/- for welfare of police, therefore genuineness of activities should not be doubted. There is no finding of the Ld. CIT(E) that assessee society was a sham entity, therefore we inclined to set aside the order of CIT(E) with the direction to consider the application of assessee and grant registration under section 12AA in accordance with law.

In the result, appeal filed by the assessee is allowed for statistical purposes.