APEKSHA TRUST,JAIPUR vs. COMMISSIONER OF INCOME TAX (EXEMPTION ), JAIPUR

 Genuineness of Activities

06. Further 12AB (1)(b)(ii) (B) of the Income Tax Act, 1961 also state that if CIT is not satisfiedhas to pass order rejecting such application and also cancelling its earlier registration. Thus, it is clarified that applicant's provisional registration under clause (vi) of clause (ac) of sub-section (1) of section 12A of the Income Tax Act, 1961 dated 02.10.2021 is also being cancelled. Further assessee has failed to give proper justification for regularization of provisional registration, thus with this order provisional registration is also cancelled.’’ 2.2 While hearing, the ld. AR of the assessee mainly submitted that the assessee was not provided proper opportunity of personal hearing by the ld. CIT(E) and thus the order should be quashed being ex-parte order and against the principles of natural justice. The ld.AR further submitted that the assessee trust had submitted supporting documentary evidence before the ld. CT(E) but he treated the said activity of the trust as non-genuine (as mentioned at page 14 of last para of his order). The ld.AR further submitted that the verification / enquiry of the Inspector dated 30-12-2024 was not confronted with the assessee trust and the ld. CIT(E) relied upon the report of the Inspector to treat the activity of the trust as non-genuine. Conclusively, the ld. AR of the assessee prayed to restore the matter back to the file of the ld. CIT(A) for afresh adjudication. The relevant submission as made before us through written submission is reproduced as under (Page 6 & 7):-

APEKSHA TRUST VS CIT (E), JAIPUR ‘’Submission of the Appellant: It may be noted/seen form the above observation of the id. CIT (E) is given in the last para of page no. 5) that he (CIT (E)] has accepted the donations received by the ssessee trust. But the id. CITIE) has treated the claim of the assessee regarding distribution of ration items amongst deprived persons as bogus and non-genuine and for which he has given reasons as mentioned above at- sr no, a-l, In this regard, it is submitted that the said reasons have been given by the Id. CIT(E) only to treat the said activity of the assessee trust as non-genuine. In support of this following facts are submitted for kind consideration- a) In view of facts mentioned above at page no. 2, reasons mentioned above at sr. no a), b), c). It is evident that the suppliers are not unverifiable and bogus. Also, the purchases, invoices are not bogus. b) For reasons mentioned at st. no. d), e), f), g), hl it is submitted that during the course of registration proceedings of trust, explanation with regard to these reasons were given vide written submission dated 25/11/2024, 11/12/2024, 16/12/2024 (Paper Book Page no. 15-23) Hence, it is stated that these reasons have been given by the Id. CIT (E) merely to reject the claim of the assessee trust. c) For reasons mentioned above at serial no. i), J), K), it is submitted that the assessee is not aware about the Meta data. This being so, the photos with meta date could not be submitted. As regards, photos given by assessee of small magnitude it is submitted that whatever the photos available with the assessee were submitted before the Id. CIT (E). So, the CIT(E) was not justified in observing that photos given by the assessee are of small magnitude, while expenses claimed are huge. d) For reasons mentioned above at-Sr.no. 1) it is submitted that the explanation regarding address of the trust situated at 117A, Raman Puri, Shyam Nagar, Jaipur as mentioned in Form 10AB, was already given in the written submission dated 16/12/2024 (Paper Book Page no.22-23). Wherein it was clearly mentioned that due to increase in the activities of trust, the said office shifted to the D-341, Murlipura Scheme Jaipur. To support this, copy of rent agreement was also furnished. So, the observation of the Id. CIT (E), given in respect of oid office, based on the report of the Inspector, is not at all acceptable and deserves to be rejected. As regards, observation of the Id. CIT (E) that wife of main trustee of the trust namely Rekha Sharma was not aware of working activities of her husband/ trust, it is submitted that Smt. Rekha Sharma is not the wife of the main trustee of the trust. So, this observation of the id CIT (E) is totally incorrect.

APEKSHA TRUST VS CIT (E), JAIPUR It is amply clear from the above facts that the Id. CIT (E) was not justified in treating/observing that the activities of the trust relating to distribution of food items amongst the deprived persons are bogus and non-genuine. Further, in support of assessee, s claim, it is submitted that the trust was created on 23/12/2020 and registered under the Rajasthan Public Act, 1959, vide registration certificate dated 08/11/2023, actively involved in the various social activities as mentioned above, copy of trust deed (Paper Book Page no. 30-40) and registration certificate issued by the Devsthan Department Jaipur (Paper Book page no. 41) are enclosed. Also, it is submitted that books of accounts of the trust are audited. To support this, the audit reports for the FY-2021-22, 2022- 23, 2023-24 relevant to the A.Y. 2022-23, 2023-24, and 2024-25 respectively are enclosed. Apart from this acknowledgment of return, computation of income, for these assessment years are also enclosed (Paper Book Page no 42-80) In view of entire facts and circumstances of the case as discussed above at length, it is submitted that the assessee trust deserves for grant of registration u/s 12AB of the Act, Hence, it is requested that matter of the assessee trust may not kindly be restored back to the file of the id. CIT(E) to be decided afresh. Accordingly, it is humbly prayed that the impugned order dated 31/12/2024 passed by the id CIT (Exemption) may kindly be set aside and also kindly be directed to grant registration to the assessee trust u/s12AB (1) ac(ii) of the Income Tax Act, 1961. To support his submission, the ld AR of the assessee has filed the following paper book. S.N. Description Pages 1. Written submission 1-7 2. Form 10AB Application- Registration 8-14 3. Written submissions filed before CIT(E) 15-25 4. Details – Raw food Distribution Activity 26-29 5. Trust Deed 30-40 6. Registration certificate issued by the Devsthan 41 Department, Jaipur 7. Audit Report, Copy of Ack. Return etc. 42-80 2.3 On the other hand, the ld. DR supported the order of the ld. CIT(E).

APEKSHA TRUST VS CIT (E), JAIPUR 2.4 After hearing both parties and perusing the materials available on record, we noticed that the ld. CIT(E) has rejected the assessee’s claim of registration u/s 12AB of the Act on following grounds:-  Genuineness of Activity Before us, the ld. AR of the assessee prayed that the ld. CIT(E) has relied upon the report of the Inspector just to treat the activity of the trust as non- genuine but the ld. CIT(E) did not provide the assessee to confront the Inspector as to the enquiry report dated 30-12-2024 in spite of making various request which is against the principles of natural justice. Thus the assessee trust may be provided one more opportunity to contest the case before the ld. CIT(E) and also to produce any other documents if required by the ld. CIT(E) and also to confront the Inspector Report dated 30-12- 2024. Based on this submission, we are of the considered view that lis between the parties has to be decided on merits so that nobody’s rights could be scuttled down without providing the proper opportunity of being heard and thereby the principles of natural justice to be followed. Looking to that aspect of the matter, we direct the assessee trust to provide details / justification for registration before the ld. CIT(E)and also in all these circumstances of the facts and circumstances of the case, the Bench restores the matter back to the file of the ld. CIT(E) to decide the issue APEKSHA TRUST VS CIT (E), JAIPUR (supra) afresh in accordance with law. Since, we have restored the matter to the file of ld. CIT(E), the provisional registration which is otherwise valid will survive till the ld. CIT(E) decides the issue of registration. 2.5. Before parting, we may make it clear that our decision to restore the matter back (supra) to the file of the ld. CIT(E) shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by the ld. CIT(E) independently in accordance with law.