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Income Tax Appellate Tribunal, DELHI BENCH ‘C’ NEW DLEHI
Before: SHRI C.M. GARG & SHRI ANADEE NATH MISSHRA
PER C.M. GARG, J.M. This appeal filed by the assessee is directed against the order of Ld. Commissioner of Income-tax (Exemption)-New Delhi dated 13.12.2018 on the following grounds :
“1. That on the facts and in the circumstances of the case, the learned Commissioner of Income Tax (Exemptions), Lucknow (CIT(E) for short) erred in passing the impugned order rejecting the appellant’s application dated 15.06.2018 under the provisions of section 80G(5)(vi) of the Income Tax Act, 1961.
2. That on the facts and in the circumstances of the case, the learned CIT(E) erred in passing the impugned order without allowing the appellant proper opportunity of being heard. The impugned order is, therefore, violative of principles of natural justice.”
Brief facts of the case are that the assessee-society filed an application in Form 10G u/s. 80G(5)(vi) of the Income-tax Act, 1961 (“the Act” for short), which was rejected by the ld. CIT(E) on the premise that all the expenditure were incurred in cash which were not open for verification and no corroborative material was placed by the assessee-society to arrive at a satisfaction as to the charitable nature of its objects and genuineness of charitable activities carried out by the assessee-society. The relevant paras of impugned order of ld. CIT(E), rejecting application of assessee, are as follows :
“3. On perusal of the material available on record, it is found that the applicant has failed to specify its objects in the application for registration and therefore no confirmation can be made regarding the nature of its objects with regard to the said application. Clearly it is only after the formation of satisfaction regarding the charitable nature of objects and genuineness of the activities that a particular trust or institution becomes eligible for according the said registration. In the instance case since no objects have been stated by the applicant, there is no question of formation of satisfaction regarding the charitable nature of objects which are non-existent. This renders the said application inherently deficient and this deficiency is not curable.
On perusal of the material available on record, it is found that the applicant has merely e-filed the application for registration u/s 80G(5) of the Income Tax Act, 1961 in Form 10G. However no trust deed, Income and Expenditure Accounts, Receipt and Payment Accounts and Balance Sheet have been provided that could throw some light upon the activities, if any, carried out by the applicant as claimed in the trust deed. There is literally no material available on record so as to form even the slightest satisfaction regarding the genuineness of the activities carried out, if any, by the applicant. The applicant need to retrospect the fact that mere submission of the application in Form 10G without any insight into the objects and the activities of the applicant society does not make a trust or institution eligible for exemption which has been specifically targeted towards institutions carrying out genuine charitable activities and furthering the cause of charity. It is imperative on the part of the applicant society to provide corroborating evidences that form the satisfaction regarding the genuineness of the activities of the applicant which is mandated by law. In the absence of such satisfaction, the applicant loses it its eligibility for consideration for according the said registration. In the instant case neither has the applicant provided any ratification by providing the books of accounts nor have any vouchers been provided for the various expenses with respect to various activities as claimed to have been carried out. The above mentioned facts place serious doubts on the genuineness of the activities of the applicant and thus render the application deficient.
5. The law requires a conjunctive test whereby objects of the applicant society have to be charitable and genuineness of charitable activities should be established for registration of application u/s 80G(5). Mere filing the application for registration in Form 10G without cogent or corroborative evidence is not sufficient by themselves to enable a registering authority to arrive at the satisfaction mandated by law. In the instant case, only Form 10G has been e-filed and the documents on record do not suffice to establish the genuineness of activities. As such the findings of fact regarding its charitable activities or rather the lack thereof arrived at on the basis of the evidence filed and arguments addressed stand uncontroverted. This is fatal to the claim of the applicant.
It is clear that applicant has failed to provide sufficient material to corroborate the charitable nature of the objects and genuineness of the activities. Despite being provided timely opportunity the applicant has not been able to substantiate its claim.”
On bare perusal of para 2 of order, we find that the CIT(E) passed order on 13.12.2018. On this date Sh. Shobit Gupta, CA, authorized representative of the assessee, was present. In para 4 (supra), the ld. CIT(E) alleges that merely application in Form 10G has been filed, but no trust deed, income and expenditure accounts, receipt and payment accounts and balance sheet have been provided, which could throw some light on the activities of Trust. In our considered view, from perusal of impugned order of CIT(E), we are unable to see any effort on the part of ld. CIT(E) to call upon the assessee to file above noted required documents. Thereafter, in paras 5 & 6 (supra), the ld. CIT(E) after noting some principles of adjudication dismissed the application of assessee. In our humble understanding, the ld. CIT(E) has not provided due opportunity to submit all the required documents during proceedings despite the fact that the ld. AR, CA Shobit Gupta was present on several dates including the last date of hearing 13.12.2018 and passed the impugned order on the very same date alleging absence of required documents.
4. Thus, it is clear case of violation of principles of natural justice. Thus, the impugned order is not sustainable, hence, we set aside the same. Since, the assessee was prevented from filing required documents before the ld. CIT(E), therefore, the matter is restored to the file of ld. CIT(E) with a direction that he will re- adjudicate the application of the assessee for grant of registration u/s. 80G of the Act after allowing due opportunity of hearing to assessee and allowing it to file all required documents and accounts. The ld. CIT(E) is also directed to consider and re-adjudicate the application of assessee as per provisions of the Act and without being prejudiced from earlier rejection order.
In the result, appeal of the assessee is allowed for statistical purposes.