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Income Tax Appellate Tribunal, DELHI BENCH “Friday E”: NEW DELHI
Before: SHRI H.S.SIDHU & SHRI PRASHANT MAHARISHI
O R D E R PER PRASHANT MAHARISHI, A. M. 1. The assessee has filed an application for earlier hearing in an appeal filed by the assessee against the order of the ld CIT(Exemption), Lucknow dated 11.09.2018 for the Assessment Year 2017-18. 2. The assessee has raised the following grounds of appeal:- “1. That as per information gathered from postal authorities the alleged notice of hearing dated 25.08.2018 fixing the date of hearing for 11.09.2018 was not served on the appellant and the order passed l2AA (1) (b) (ii) is unjust arbitrary, perverse and against the principle of natural justice.
2. That CIT (E) has erred on facts and in law to hold that no evidence of any charitable activity could be show caused by appellant.
3. That CIT (E) has erred on facts in law to presume that imparting of education through the government recognized body is not a genuine activity.
4. That Audit Report submitted on the basis of Audited Books of Accounts have been found no fault with and denial of exemption U/s 12 AA is Illegal.
5. That the case law relied upon by the CIT (E) are distinguishable and not applicable to appellant case.
Gauri Raj Trust Vs CIT(Exemption), (Assessment Year: 2017-18) 6. That CIT (E) has erred on facts and in law to appreciate that imparting of education per-se is a charitable activity being the Appellant Trust engaged in running of an Educational Institution duly Recognized by the C.B.S.E.
That order passed by CIT (E) be Set-aside and (E) u/s 12AA be directed to be granted.”
The assessee submitted that during the financial year 2019-20 gross receipt of the trust is expected to exceed Rs. 1 crore and therefore the coordinate bench is requested to kindly fix the date of hearing as early as possible.
The facts of the case of the assessee shows that assessee is a trust which is filed an application for registration under section 12AA of the Income Tax Act on 30/03/2018 with the Commissioner of Income Tax (Exemption), Lucknow. The application filed by the assessee was rejected and accordingly the registration requested by the assessee under section 12AA of the Income Tax Act was rejected wide order dated 11/9/2018.
The assessee has contested before us that the alleged notice of hearing issued by the learned CIT(Exemption) order dated for 25/08/2018 fixing the date of hearing on 11/9/2018 was not at all served on the appellant and the order passed by the learned CIT(Exemption) is unjust and arbitrary. The learned authorised representative submitted that the assessee has submitted a letter dated 30/03/2018 before the learned CIT(Exemption) wherein the complete details of the activities carried on by the assessee including the lease deed of purchase of land was submitted. If further referred to page number 55 to 68 being the photographs of the educational Institute and educational activities undertaken by the assessee submitted. He further stated that the trust is granted an affiliation by the Central Board of Secondary Education and therefore it cannot be said that assessee is not carrying on the educational activities. It was submitted that all these details were submitted before the learned Commissioner however for the flimsy reasons the application of the assessee was rejected.
The learned Departmental Representative referred to para No. 4 of the order of the learned CIT(E) and stated that assessee has failed to produce the books of accounts, bank statement and the vouchers in respect of the Page | 2 Gauri Raj Trust Vs CIT(Exemption), (Assessment Year: 2017-18) expenses claimed by the appellant for verification of the objects and activities of the trust. Therefore, the application of the assessee was rejected.
7. The learned authorised representative submitted that assessee has produced complete details of the activities carried on by the assessee however it is ready to produce such details as mentioned in para no. 4 of the order of the learned CIT(Exemption). It was further stated that as the date of hearing fixed on 11/09/2018 was never intimated to the assessee as notice did not reach the assessee, same might not have been produced before him.
We have carefully considered the rival contention and perused the orders of the lower authorities. Admittedly the assessee is carrying on the educational activities as per the information produced before us. Assessee has also produced the copy of the trust deed, annual account for three years, photographs of the educational Institute and the educational activities undertaken by the Institute. On perusal of these photographs it is apparent that assessee is running school which are affiliated with the Central Board of Secondary Education. However, when the details were asked by the learned CIT(Exemption) fixing the date of hearing on 11/09/2018 the notice was not received by the assessee and therefore the relevant details could not be produced. After considering the request of the learned authorised representative and his assurance that assessee would be producing the necessary details before the learned CIT (Exemption), we direct the assessee to produce the books of accounts, bank statements and vouchers in respect of the expenses claimed by eight showing the activities of the trust within three months from the date of this order, the learned CIT(Exemption) may examine the same and decide the issue of granting registration to the assessee under section 12A of the Income Tax Act a fresh. Accordingly, ground No. 1 of the appeal of the assessee is allowed with above direction.
In view of our direction with respect to ground No. 1, other grounds are not required to be adjudicated.