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Income Tax Appellate Tribunal, DELHI BENCH “C”: NEW DELHI
Before: NARENDER KUMAR CHOUDHRY & DR. BRR KUMAR
This appeal has been preferred by the Applicant/Appellant herein against the order dated 30.11.2018, impugned herein, passed by the learned Commissioner of Income-tax (Exemption), new Delhi (in short “learned Commissioner”) under Section 12AA(1)(b) read with Section 12A of the income-tax Act, 1961 (in short ‘the Act”).
Though notice of hearing to the Appellant was issued for the date of hearing on 31.8.2022 was issued through speed post, however, the Appellant neither appeared nor filed any adjournment application. From the previousorder 11.1.2022,it reflects that the Appellant on the said date of hearing as well, did also not appear. Hence, in the constrained circumstance and considering the issue involved in the instant appeal, we deem it appropriate to decide this appeal as ex-parte.
Brief facts, relevant for adjudication of the instant appeal, are that in the instant case the Appellant by filing an on-line application dated 8.5.2018 in form no. 10A & 10G sought registration u/s 12AA and 80-G of the Act, which was taken into consideration by the learned Commissioner byissuing questionnaire dated 23.8.2018 to the Appellant for filing of certain documents in support of its claim of registration u/s 12AA and 80G of the Act and by fixing the case for hearing on 7.9.2018.
As per impugned order, though the Appellant filed submissions from time to time, however failed to submit any document to establish that it has carried out any activities which bear the character of charity. The ld. Commissioner by observing that the above facts clearly demonstrated that the applicant has not done any activity and has not been able to establish genuineness of its activities,rejected the application for registration u/s 12AA. The Ld. Commissioner also rejected the application seeking approval u/s 80G of the Act on the ground that the Appellant is not registered u/s 12AA of the Act.
The Appellant being aggrieved preferred the instant appeal.
Heard the Ld. DR who supported the impugnedorder. The Ld. Commissioner while rejecting the application for registration u/s 12AA, on one spell observed that the Appellant failed to submit any document to establish that it has carried out any activities which bear the character of charity. On the second spell held that the above facts clearly demonstrated that the applicant has not done any activity and has not been able to establish genuineness of its activities.
6.1 Fromthe conclusion drawn by the Ld. Commissioner and grounds raised by the Appellant, question arise “where the trust/Society is at nascent stage and has not commenced the activities, the Commissioner can reject its application for registration on the ground that the Trust/Society has failed to establish the genuineness of its activities.”
6.2 The Hon’ble Delhi High Court in the case of DIT Vs. Foundation of Opthalmic& Optometry Research Education Center, in , decided on dated 16.08.2012 dealt with the same situation and observed as under:
“That the concern CIT is not required to examine the question whether the Trust has actually commenced and has, in fact, carried on charitable activities?”
5.3 The Hon’ble Gujarat High Court in the case of CIT -1, vs. KutchiDasaOswal Moto PariwarAmbama Trust (2014 271 CTR 0595 has also dealt with identical situation and heldto the effects :
`" While considering the application u/s 12AA, the Commissioner has to satisfy himself about the objectives of the trust and genuineness of its activities and for such purposes, he has the power to call for such documents or information from the trust as he think are necessary. However, this does not mean that if the activities of the trust have not commenced the Commissioner has authority to reject its application for registration on the ground that the Trust has failed to convince him about the genuineness of the activities. That is what unfortunately the Commissioner did in the preset case ".
5.4 The Hon’ble Allahabad High Court in the case of Hardayal Charitable & Educational Trust Vs. Commissioner of Income Tax-II, Agra decided on 15 March, 2013 also dealt with identical issue and held as under:
" The preponderance of the judicial opinion of High Courts as well as ITAT is that at the time of registration u/s 12AA of the Act, the CIT is not required to look into the activities, where such activities have not or are in the process of its initiation. Where a trust, set up to achieve its objects of enabling educational institution, is in the process of establishing such institution and receives donations, the registration u/s 12AA cannot be refused, on the ground that the Trust has not yet commenced the charitable or religious activity" .
5.5 Considering the dictums of the Hon’ble Courts, we are of the considered view that where the Trust/Society has not done any activity then the question qua genuineness of its activities does not arise. Even otherwise if the Trust/Society is at nascent stage, then carrying out the activities for grant for grant of registration/s 12A of the Act is not necessary.
5.6 The ld. Commissioner is supposed to satisfy itself about (i) the objects of the Trust or Institution and (ii) the genuineness of its activities. The objects of the Trust or the Institution having paramount consideration, therefore, the ld. Commissioner is required to give its definite finding, whether the objects are sync with the parameters of provisions of Act applicable thereto, particularly in the absence of the activities,which is not being done in the instant case.
5.7 Even otherwise, after receiving the reply/documents/submissions of the appellant, the ld. Commissioner has not afforded any opportunity of being heard to the appellant in order to establish/corroborate its case. Hence, considering the peculiar facts and circumstances and for the ends of justice, we deem it appropriate to set aside the impugned order and to remand the instant case to the file of the ld. Commissioner for decision afresh, suffice to say by affording reasonable opportunity(s) of being heard to the appellant. Order accordingly.
6. In the result, appeal of the Appellant stands allowed for statistical purposes.
Order pronounced in the open court on 31/08/2022.