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Income Tax Appellate Tribunal, RANCHI BENCH, RANCHI
Before: SHRI PRADIP KUMAR KEDIA&
IN THE INCOME TAX APPELLATE TRIBUNAL RANCHI BENCH, RANCHI BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER& Ms. MADHUMITA ROY, JUDICIAL MEMBER I.T.A. No. 146/Ran/2017 (Assessment Year: N.A.) M/s. Manavta Vidyasagar, Vs. Commissioner of Income-Tax Karmatand(Jamtara), (Exemptions), Patna Jharkhand-805352 [PAN No. AAB TL2 602 G] (Appellant) .. (Respondent)
Appellant by : Shri Devesh Poddar, Adv. Respondent by : Shri Inderjeet Singh, CIT (D.R.) Date of Hearing 05.11.2019 Date of Pronouncement 02.12.2019 O R D E R PER Ms. MADHUMITA ROY - JM:
The instant appeal filed by the assessee is directed against the order dated 03.05.2017 under section 12AA of the Income Tax Act, 1961 issued under the signature of the Commissioner of Income (Exemptions) Patna, whereby and whereunder the application for grant of registration of the assessee trust has been rejected.
The assessee trust filed an application on 11.11.2016 for grant of approval under section 12AA of the Act. On the date of hearing the details were duly filed before the Revenue by the assessee in respect of such grant of approval upon perusal of which particularly, the audited
ITA No.146/Ran/2017 M/s. Manavta Vidyasagar vs. CIT(E) Asst.Year –N.A. - 2 - account of the trust the Ld. Commissioner formed an opinion that the trust is not exclusively engaged in the charitable activities and rejected the claim. Hence, the appeal before us.
Heard the parties, perused the relevant materials available on records. As it appears from the records that the case of the assessee is this that the objects of the trust is charitable in nature and the entire receipts is to be applied for charitable purposes. Sufficient press cuttings, copy of reports of charitable work by providing health care in different places, blood donation camps, proof of observation of No Tobacco Day for the benefit of general masses were also duly placed before the Ld. Commissioner in order to substantiate its claim but according to Revenue the accounts of the society does not reflect the genuineness of all transactions and hence rejected such grant.
It is a settled principle of law that the genuineness of the objects is required to be looked into by the Ld. Commissioner at the time of granting approval under section 12AA and not the income of the trust whether it is for charitable or religious purposes. The stage of application of income is yet to arrive when such trust or institution will file its return. Those rejection, at this stage by the Commissioner is not permissible in the eye of law. On this issue the judgment relied up on by the Ld. AR passed by the Co-ordinate Bench in ITA No. 268/Ran/2016 passed in the matter of M/s. Nai Pahal Foundation vs. CIT(E), Patna has also been considered by us. In that particular judgment the Co-ordinate Bench has been pleased to consider several pronouncements made by the
ITA No.146/Ran/2017 M/s. Manavta Vidyasagar vs. CIT(E) Asst.Year –N.A. - 3 - different Benches of Tribunal including the order passed by the Hon’ble Madras High Court in the case of DIT(E) vs. Seervi Samaj Tambaram Trust, reported in [2014] 43 taxmann.com 142 (Madras). While dealing with this identical issue the Hon’ble High Court observed as follows:-
“9. The Hon'ble Madras High Court in the case of DIT(E) Vs. Seervi Samaj Tambaram Trust, [2014] 43 taxmann.com 142 (Madras) has held as under:- "It is not denied by the assessee that on the date of the application under section 12AA, it was yet to commence its operation. But nevertheless the genuineness of the objects of the trust were not questioned by the Commissioner. Considering the fact that the continuance of registration is further a subject matter of scrutiny by the Commissioner as contemplated under section 12AA(3), the revenue would not be justified in refusing the registration at the threshold " [Para 9] 10. In the instant case, we find that the CIT(E) has refused registration on the ground that the assessee failed to establish that activities of the assessee are genuine, whereas the CIT(E) has not raised any doubt or objection about the charitable objects of the assessee society, therefore, registration u/s 12AA of the Act cannot be denied on the ground that the genuineness of the charitable activities cannot be held to be established in absence of any genuine charitable activity. Accordingly considering the above judicial decisions and the application of ratio decidendi to the present case, we direct the CIT(E) to grant registration to the assessee society u/s 12AA of the Act. Accordingly, ground of appeal of the assessee is allowed.”
Relying upon this judgment the registration has been directed to be allowed by the Ld. Commissioner in terms of the said order dated 27.11.2018 passed by the Co-ordinate Bench in the case of M/s. Nai Pahal Foundation vs. CIT(E). Hence, in the absence of any changed circumstances respectfully relying upon the same we find that the question which has been raised by Commissioner regarding the genuineness of the transaction is premature at this stage and thus neither within the purview under section 12AA of the Act. Hence, we quash the
ITA No.146/Ran/2017 M/s. Manavta Vidyasagar vs. CIT(E) Asst.Year –N.A. - 4 -
impugne order of rejection with a further direction upon the Ld. CIT(E) to grant approval under section 12AA of the Act to the trust.
In the result, the assessee’s appeal is allowed. This Order pronounced in Open Court on 02/12/2019
Sd/- Sd/- (PRADIP KUMAR KEDIA) (Ms. MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 02/12/2019 TANMAY, Sr. PS TRUE COPY आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त(अपील) / The CIT(A)- 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ranchi 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER,
(Sr. Private Secretary) आयकर अपील�य अ�धकरण / ITAT, Ranchi 1. Date of dictation 20.11.2019 2. Date on which the typed draft is placed before the Dictating Member 21.11.2019 3. Other Member………………… 4. Date on which the approved draft comes to the Sr.P.S./P.S 27.11.2019 5. Date on which the fair order is placed before the Dictating Member for pronouncement .11.2019 6. Date on which the fair order comes back to the Sr.P.S./P.S .11.2019 7. Date on which the file goes to the Bench Clerk 02.12.2019 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order…………………….. 10. Date of Despatch of the Order……………………………………