DIVYAVANI TRUST,HYDERABAD vs. ITO, WARD-4(2), HYDERABAD

This appeal is filed by the assessee against the order of the Ld. CIT(A), National Faceless Assessment Centre (NFAC), Delhi in DIN No. ITBA/NFAC/S/250/2021-22/1033600885(1), dated 22/06/2021 passed U/s. 143(1) r.w.s 250(6) of the Act for the A.Y. 2019-20.

2. The Ld. CIT (A) (NFAC) has merely rejected the appellant’s status solely on the ground that the appellant was denied registration by an order dated 25/11/2019 passed U/s. 12AA(1)(b)(ii) of the Act in respect of which an appeal is pending before the ITAT, A-Bench, Hyderabad in and which is posted for hearing on 30/08/2021.

4. Any other ground(s) that may be argued at the time of hearing.”

3. At the outset, the Ld. AR submitted before us that the Ld. CIT (A) (NFAC), Delhi had confirmed the order of the Ld. AO passed U/s. 143(1) of the Act who had denied the benefit U/s.11 of the Act because the assessee’s application for registration U/s. 12AA of the Act was rejected by the CIT(E). the Ld. AR further submitted that the appeal against the order of the Ld. CIT (E) is pending before the Tribunal in which was posted for hearing on 30/08/2021. The Ld. AR further requested that the appeal of the assessee may be remitted back to the file of the Ld. AO in order to pass appropriate order in the light of the order passed by the Tribunal. Ld. DR on the other hand vehemently objected to the submission of the Ld. AR and prayed for confirming the order of the Ld. Revenue Authorities.

“5. We have heard the rival submissions and carefully perused the materials on record. On examining the paper book filed by the assessee we find that the assessee Trust has not produced before us the statement of accounts of the assessee for the AY 2020-21 i.e, during the period when the Ld. CIT (E) has examined the affairs of the assessee. The assessee has filed its receipts and payments account for the period 1/4/2018 to 31/3/2019 relating to the AY 2019-20. On examining the receipts and payments for the AY 2019- 20, we do not find any expenditure incurred by the assessee which is not for the mixed objects of the assessee-Trust. Further, as held by the Hon’ble Jurisdictional Hon’ble Andhra Pradesh High Court in the case CIT vs. Social Service Centre reported in 250 ITR 39 (AP) the Assessee-Trust’s application in Form 10A cannot be rejected for the sole reason that the assessee Trust is having both religious and charitable objects. On perusing the objects of the assessee-Trust which are extracted in the order of the Ld. CIT (E), We find that the objects of the assessee Trust are both religious activity as well as charitable activity, in the nature of advancement of any other objects of general public utility. However, the scope of the objects in the clauses viz., “(c) to provide clean entertainment that inspires proclamation of good news to all Telugu Speaking people by using all forms of media based on values of justice and morals, and “(g) to produce audio and video productions like films, documentaries, docudramas, short films, Tele-serials, TV Shows and Public Service Announcements”, appears to be have elusive meaning and therefore it requires further explanation. Hence, in the interest of justice, We hereby remit the entire matter back to the file of the Ld. CIT(E) in order to re-examine the issues in detail and also to examine the financials of the assessee Trust for the assessment year 2020-21 & onwards and thereafter decide the matter afresh in accordance with merit and law.”

Pronounced in the open Court on the 11th January, 2022.