PUNJABI SAMAJ SURAT,,SURAT vs. THE C.I.T. (EXEMPTIONS),, AHMEDABAD

Punjabi Samaj Surat Vs. CIT(Exe.), Ahd /ITA No.496/AHD/2017 Page 1 of 4 आयकर अपील�य अ�धकरण,सुरत �यायपीठ, सुरत IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER आ.अ.सं./I.T.A.No.496/AHD/2017 �नधा�रण वष�/Assessment Year : - Punjabi Samaj Surat, Vs. The Commissioner of Income Shree Radha Krishna Mandir, Tax(Exemptions), Nr.Gateway Hotel, Parle Point, Ahmedabad. Surat – 395 007. [PAN: AABTP 9875 D] अपीलाथ� Appellant ��यथ�/Respondent �नधा�रती क� ओर से /Assessee by: None. राज�व क� ओर से /Revenue by: Shri Sreenivas T. Bidari - CIT-DR

सुनवाई की तारीख/ Date of hearing: 13.05.2019 उ�घोषणा क� तार�ख/Pronouncement on: 13.05.2019 आदेश /O R D E R PER BHAVNESH SAINI, JM: This appeal by the Assessee has been directed against the order 1. of Learned Commissioner of Income Tax (Exemptions), Ahmedabad dated 29.12.2016 rejecting the application for approval/exemption u/s.80G(5) of the Income Tax Act.

Briefly stated facts of the case are that the assessee filed 2. application for approval of the Trust u/s.80G(5) of the Income Tax Act. The Learned CIT(Exemptions) issued letter to the assessee to furnish detailed note on the activities actually carried out by the trust as well as

Punjabi Samaj Surat Vs. CIT(Exe.), Ahd /ITA No.496/AHD/2017 Page 2 of 4 called for the several documents from the assessee. The Learned CIT(Exemptions) noted that assessee did not provide details and nobody attended proceedings before him. Another opportunity was given on 25.11.2016 giving final opportunity to the assessee and case was fixed for hearing on 08.12.2016. The assessee did not make compliance, therefore application was disposed of on the basis of material available on record. The Learned CIT(Exemptions) noted that the record revealed that assessee has neither carried out any charitable / religious activity nor establish Corpus to undertake the charitable activities. This clearly indicates that the assessee does not have any intention to start charitable/religious activities. The Learned CIT(Exemptions) relied upon the order of ITAT Agra Bench in the case of Hardayal Charitable & Educational Trust Vs. Commissioner of Income Tax-II, Agra 150 TTJ 384 and accordingly rejected the approval u/s.80G(5) of the Act.

None appeared on behalf of the assessee despite informing the 3. date of hearing through registered post.

We have heard the Learned Departmental Representative and 4. perused the material available on record.

The assessee in the grounds of appeal has mentioned that it has 5. been granted registration u/s.12AA of the Income Tax Act. Copy of the same order is also filed in the paper book at page 87. It would show that

Punjabi Samaj Surat Vs. CIT(Exe.), Ahd /ITA No.496/AHD/2017 Page 3 of 4

assessee’s aims and objects are charitable in nature. The Learned CIT(Exemptions) rejected the application u/s.80G(5) of the Income Tax Act, because assessee did not carry out any charitable / religious activities. The Learned CIT(Exemptions) in this reference relied upon the order of ITAT Agra Bench in the case of Hardayal Charitable & Educational Trust (supra). However, the aforesaid decision of Agra Bench have been set-aside by the Hon'ble Allahabad High Court in the case of Hardayal Charitable & Educational Trust Vs. CIT 355 ITR 534 in which Hon'ble High Court held as under : “It was held that at the time of registration u/s 12AA, which was necessary for claiming exemption u/s 11 and 12, the CIT was not required to look into the activities, where such activities had not or were in the process of its initiation. Where a trust, set up to achieve its objects of establishing educational institution, was in the process of establishing such institutions, and receives donations, the registration u/s 12AA cannot be refused, on the ground that the Trust had not yet commenced the charitable or religious activity. Any enquiry of the nature would amount to putting the cart before the horse. At this stage only the genuineness of the objects had to be tasted and not the activities, which had not commenced. It was held that the enquiry of the CIT at such preliminary stage should be restricted to genuineness of the objects and not the activities unless such activities had commenced. The Trust or society could not claim exemption, unless it was registered u/s 12AA and thus at that such initial stage the test of the genuineness of the activity could not be a ground on which the registration may be refused.” In the aforesaid case, Hon'ble Allahabad High Court held that at 6. stage of grant of Registration u/s.12AA of the Income Tax Act, the competent Authority shall have to see the objects of the Trust which should be charitable in nature. Since in the case of assessee, registration u/s.12AA have been granted which prima facie shows assessee’s object are charitable in nature i.e. Educational in nature, therefore, there were no justification for Learned CIT(Exemptions) to deny approval u/s.80G(5)

Punjabi Samaj Surat Vs. CIT(Exe.), Ahd /ITA No.496/AHD/2017 Page 4 of 4 of the Income Tax Act. Further, the case laws relied upon by the Learned CIT(Exemptions) have already been overruled by the Allahabad High Court, therefore matter requires reconsideration at the level of Learned CIT(Exemptions). We, accordingly set-aside the impugned order and restore matter in issue to the file of Learned CIT(Exemptions), Ahmedabad with a direction to re-decide the application u/s.80G(5) of the Income Tax Act as per law by giving reasonable sufficient opportunity of being heard to the assessee.

In the result, appeal of the assessee is allowed for statistical 7. purpose.

The order pronounced in the open court 13-05-2019. 8.

Sd/- Sd/- (O.P.MEENA) (BHAVNESH SAINI) (लेखासद�यकेसम� /ACCOUNTANT MEMBER) (�याियकसद�यतथा/JUDICIAL MEMBER) सुरत/ Surat, �दनांक Dated: 13th May , 2019/S.Gangadhara Rao, Sr.PS Copy of order sent to- Assessee/AO/Pr. CIT/ CIT (A)/ ITAT (DR)/Guard file of ITAT. By order / / TRUE COPY / / Assistant Registrar, Surat