VEERALAYAM,,PUNE vs. COMMISSIONER OF INCOME TAX (EXEMPTION),PUNE, PUNE

॥ आयकर अपीलीय न्यायाधिकरण, पुणे “बी” न्यायपीठ, पुणे में ॥ IN THE INCOME TAX APPELLATE TRIBUNAL, PUNE “B” BENCH, PUNE BEFORE SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI G. D. PADMAHSHALI, ACCOUNTANT MEMBER आयकर अपीऱ सं. / ITA No. 949/PUN/2019 Veeralayam 1183, C/o Vijayraj Ranka, G.C. Jewellers, Raviwar Peth Pune – 411002 . . . . . . . अपीऱार्थी / Appellant PAN:AAATV4988N बनाम / V/s. Commissioner of Income Tax-Exemption, . . . . . . . . प्रत्यर्थी / Respondent Pune द्वारा / Appearances Assessee by : None Revenue by : Shri Sardar Singh Meena सुनवाई की तारीख / Date of conclusive Hearing : 03/10/2022 घोषणा की तारीख / Date of Pronouncement : 03/10/2022 आदेश / ORDER PER G. D. PADMAHSHALI, AM; By the present appeal the assessee litigated the rejection of 12A registration and the order of the Commissioner of Income Tax-Exemption, Pune [for short “CIT(E)”] dt. 30/04/2016 passed u/s 12AA(1)(b)(ii) of the Income-tax Act, 1961 [for short “the Act”]

Veeralayam ITA No.949/PUN/2019 PAN: AAATV4988N 1] The order passed u/s. 12AA of the Act is bad in law, since it is passed without following the principle of natural justice.

2] The Ld. CIT erred in not granting registration u/s. 12AA to the appellant trust even through appellant has satisfied al the terms & conditions prescribed under the Act.

3] The Ld. CIT erred in holding that he was not satisfied with regards to the genuineness of activities of the trust towards achieving the object of the trust and therefore registration u/s. 12AA could not be granted.

4] The Ld. CIT erred in holding that appellant trust has misled the department by submitting false evidence and also had failed to produce books of accounts & donation receipts and accordingly, the genuineness of the activities of trust could not be proved and therefore, registration u/s. 12AA was not be granted to the appellant trust.

5] The Ld. CIT failed to appreciate that appellant trust was created for religious activities and was genuinely carrying out various activities in order to achieve its objects and therefore, the registration u/s. 12AA ought to have been granted to the appellant trust.

6] The Ld. CIT erred in not appreciating the correct facts of the case while rejecting the application for registration u/s. 12AA and the registration ought to have been granted in view of the charitable / religious activities carried out by the appellant trust.

7] The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal.”

Veeralayam ITA No.949/PUN/2019 PAN: AAATV4988N short “ITAT Rules”], on the other hand we find that, the appeal alleges substantively three issues such as; 1. Violation of principle of natural justice 2. Satisfaction of necessary terms & condition prescribed for grant of registration and 3. Genuineness of charitable / religious activities engaged into.

4.2 After perusal of case records, the assessee was put to notice dt. 24/10/2018 calling upon to furnish clarification about its existence and genuineness of activities engaged into, which the appellant replied by ITAT-Pune Page 3 of 8

Veeralayam ITA No.949/PUN/2019 PAN: AAATV4988N online submission dt. 11/04/2019. Considering the application in the light of submission and assessment records, the Ld. CIT(E) called for factual report from the jurisdictional Income Tax Officer(Exemption) [for short “AO”] and based thereon, for the reason of non- satisfaction about the genuineness of activities of the trust, rejected the application for registration.

4.3 Aggrieved by the action of the Ld. CIT(E), the appellant, on the grounds rearticulated at para 3 herein before.

4.4 The assessee company challenged the action of Ld. AO contesting all the addition before the first appellate authority [for short “FAA”], wherein the Ld. CIT(A) Consequently, against sustained additions / disallowances the appellant company is in appeal before this Tribunal on effectively two grounds set in para 2 hereinbefore.

ITAT-Pune Page 4 of 8

Veeralayam ITA No.949/PUN/2019 PAN: AAATV4988N appellant showing no appearance on four occasions and availed as many as thirteen (13) adjournment on unfounded cause, we in the interest of justice proceeded to adjudicate the matters following rule 24 of the ITAT- Rules, which empowers this Tribunal to decide the appeal filed by the appellant ex–parte on merits where the appellant does not appear in person or through an authorised representative and the same is done placing on record a no-objection from the respondent revenue. It is needless to mention further that, the proviso to the said rule carves out an exception by empowering the Tribunal to recall the ex–parte order, if the appellant appears afterwards and satisfies placing evidential material before the Tribunal that, there was sufficient cause for his non– appearance when the appeal was called for hearing and in the event of failure to substantiate the non-appearance, the recall exercise dies out.

Veeralayam ITA No.949/PUN/2019 PAN: AAATV4988N grounds of appeal are contrary to the facts of the case and the submission of “fabricated 12A Certificate” during the course of survey proceeding carried on u/s 133A on the appellant, ispo-facto sufficient to hold that, the trust is indulged into non-genuine activities, hence the action of the Ld. CIT(E) rejecting the grant of 12A deserves to be confirmed.

ITAT-Pune Page 6 of 8

Veeralayam ITA No.949/PUN/2019 PAN: AAATV4988N 9. In this context, we find that, upon perusal of application for 12A registration and accompanying documents, the Ld. CIT(E) in order to vouch the existence of the trust and genuineness of its activities, by issue of notice dt. 24/10/2018 called upon the appellant to substantiate the existence and genuineness of activities engaged into and to furnish information / clarification on utilization funds towards avowed objects of the trust, pursuant to which the appellant made online submission on 11/04/2019. During the pendency of 12AA proceedings, an information about survey operation carried out on the appellant came to the notice of the Ld. CIT(E), who pursuant thereto called for the factual report from the jurisdiction AO and based thereon, the Ld. CIT(E) drawn the conclusion about the non-genuineness of activities of the applicant trust and rejected the application without putting the appellant to notice or affording an opportunity of being heard in terms of proviso to section 12AA(1)(b), which clearly is violative of principle of “audi alteram partem”, and for the reason we in the light of decision of Hon’ble Rajasthan High Court in

ITAT-Pune Page 7 of 8

Veeralayam ITA No.949/PUN/2019 PAN: AAATV4988N “Sanatan Dharm Mahaveer Dal Vs CIT” reported in 252 ITR 46, are of the unhesitant view that, the impugned order of rejection is clearly unsustainable in law being violative of principles of natural justice as well as the statutory provisions as alluded to hereinabove, consequently without commenting on merits of the case, we remand the matter back to the file of Ld. CIT(E) with a direction to accord reasonable opportunity in terms of proviso to section 12AA(1)(b) of the Act before concluding the proceedings.

-S/d- -S/d- S. S. GODARA G. D. PADMAHSHALI JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / PUNE ; दिन ांक / Dated : 31st day of October, 2022. आदेश की प्रधिधलधप अग्रेधिि / Copy of the Order forwarded to : 1.अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT, Pune (MH-India) 4. The CIT(E),Pune (MH-India) 5. DR, ITAT, Pune Bench ‘B’, Pune 6. ग र्डफ़ इल / Guard File. आिेश नुस र / BY RDER, वररष्ठ दनजी सदिव / Sr. Private Secretary आयकर अपीलीय न्य य दिकरण, पुणे / ITAT, Pune. ITAT-Pune Page 8 of 8