SHRI JALARAM AROGYA SEVA TRUST,SABARKANTHA vs. THE ITO (EXEMPTION), PALANPUR

The assessee is a charitable trust registered under the Charitable Trust Act u/s. 12A of the Income Tax Act. The assessee filed its return of income on 24-10-2019 declaring total income at Rs. nil after claiming exemption u/s. 11 of the Act. The Assessing Officer observed that the assessee filed revised return of income on 22-02-2020 declaring total income of Rs. nil. Even in his revised return of income, the assessee claimed exemption u/s.

The assessee’s case was selected for scrutiny as the assessee has not mentioned description for section under which it has been registered or approved. The assessee has also not mentioned even the registration no. in the original return of income. The statutory notices were issued to the assessee which the assessee failed to respond and therefore the Assessing Officer made addition of Rs. 15,00,000/- u/s. 68 of the Act and charged the tax u/s. 115BBE of the Act.

Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.

The ld. A.R. submitted that the assessee trust was registered u/s. 12AA of the Act w.e.f. 12-07-2001 order dated Shri Jalaram Arogya Seva Trust, A.Y. 2019-20 24-09-2002. The original return of income was filed on 24-10- 2019 and revised return filed on 22-02-2020. Notice u/s. 143(2) was issued on 25-09-2020. Notice u/s. 142(1) was issued on 21-01-2021 and the assessee filed revised return dated nil. The ld. A.R. further submitted that the Assessing Officer issued subsequent notice u/s. 142(1) dated 17-08-2021 and show cause notice dated 16-09-2021 thereby grant time till 21-09- 2021, the assessee sought adjournment on 21-09-2021 but there was no communication accepting or rejecting the said adjournment. The ld. A.R. submitted that the assessment order was passed on 27-09-2021 at assessed income Rs. 19.91 lakhs including the corpus of Rs. 15,00,000/-. The ld. A.R. submitted that the CIT(A) dismissed the appeal on the ground that the assessee has not submitted the certificate issued u/s. 12AA and rejected the submission of the said certificate at the time of hearing. The ld. A.R. submitted that despite giving certificate issued u/s. 12AA, the CIT(A) has not taken cognizance of the same and simply sustained the order of the Assessing Officer which categorically mentioned that the assessee is not registered. Thus, the ld. A.R. submitted that the matter may go back to the Assessing Officer for verifying the certificate and after verifying the exemption grant the assessee exemption claimed u/s. 11 of the Act.

The ld. D.R. relied upon the assessment order and the order of the CIT(A). The ld. D.R. pointed out para 10.1 of the CIT(A)’s order wherein it is categorically mentioned the assessee has not responded to any statutory notices.

We have heard both the parties and perused all the relevant materials available on record. It is pertinent to Shri Jalaram Arogya Seva Trust, A.Y. 2019-20 note the assessment was passed u/s. 144B of the Act. Thus, the certificate issued u/s. 12AA was not before the Assessing Officer. The CIT(A) has also not taken note of cognizance of the same. Therefore, in the interest of justice, it will be appropriate to remand back this matter to the file of Assessing Officer for proper verification of the said documents and adjudicate the issue as per the Income Tax Act. The appeal of the assessee is partly allowed for statistical purposes.

The appeal of the assessee is partly allowed for statistical purposes.