SMT.BHAWARI BAI GHEWARCHANDJI SURANA CHARITABLE TRUST ,BANGALORE vs. THE COMMISSIONER OF INCOME TAX (EXEMPTIONS) , BANGALORE

O R D E R

PER SHRI PAVAN KUMAR GADALE, JM :

3. The Brief facts of the case that the assessee-Trust was registered with Sub-Registrar, Basavanagudi, Chamrajpet on 3.12.2016 with the objects to construct, renovate and administer temples, Dharmashalas, Seminar Halls Prayer Halls as referred at 2 of the Trust Deed and their objects thereto. Further the Trust and Trustees of Micro Labs Limited has dedicated a portion of land as referred in Schedule B, Balegaranahalli Village, Attibelle, Bangalore referred to at para 4 of the Trust Deed. Subsequently, the assessee filed an application for Registration under Section 12A of the Act on 17.10.2017 and at the time of registration, the assessee submitted the Income Tax Returns and Trust Deed and subsequently on receipt of the letter dt.10.12.2018 received on 27.1.2018 from the CIT (Exemptions) requiring the assessee to file the details referred at Page 34 of Paper Book. The CIT (Exemptions) on examination of the information submitted by the assessee called for additional information in respect of maintenance of Bank accounts and authorization and dealt on the provisions of the Schedule Bank as referred under Section 11(5) of the Act for collecting the donations and such amounts received were credited to the Bank account and payments were also reflected. Subsequently, the assessee Trust filed a letter dt.14.4.2018 explaining the points in respect of the cash deposits and relied on the judicial decisions. Whereas the CIT (Exemptions) considering these submissions and facts observed Trust is registered, the benefit of Section 11 cannot be considered and assessee Trust payments made to Mr. Hiten V Shah could not be explained properly and finally the CIT (Exemptions) observed that the assessee is not interested in prosecuting the application for Registration of Sec. 12A of the Act as no information was received in lieu of questionnaire issued by the CIT (Appeals) (Exemptions) and dismissed the application for Registration under Section 12A of the Act. Aggrieved by the order, the assessee has filed an appeal before the Tribunal.

4. At the time of hearing, the learned Authorised Representative submitted that the assessee has opened the Bank Account with Canara Bank which is a Scheduled Bank and qualified for utilization of funds and similarly, the Trust and the Trustees of Micro Lab Limited has allotted a portion of land for conducting the trust activities. The learned Authorised Representative referred to page 73 of the Paper Book where the assessee has explained that the donations are received from Micro Lab Ltd. and also on the reimbursement of expenses to Shri Dilip Surana. The contention of the ld. AR that the assessee Trust was registered with the SRO, State Government and objects are charitable in nature. The details of expenses incurred by the Trust were filed in the course of hearing referred at page 74 of the Paper Book. The ld. AR vehemently argued that the learned CIT (Exemptions) has not provided adequate opportunity inspite of submitting all the required information and supported his stand with the judicial decisions in respect of granting of Registration under Section 12A of the Act. Contra, the learned Departmental Representative supported the order of learned CIT (Exemptions) and submitted that activities of the Trust are not in charitable nature and prayed for dismissal of appeal.

5. We heard the rival submissions and perused the material on record. Prima Facie, the main disputed issue is with respect to rejection of Registration under Section 12AA by the CIT (Exemptions). The ld. AR’s contention that the learned CIT (Exemptions) has not considered the vital material and restricted his observations only to a particular claim and non-compliance. The ld. AR further emphasized at the time of Registration the learned CIT (Exemptions) has to verify the genuineness of the Trust which prima facie, the assessee was able to prove with evidence. We find that the assessee has submitted the information CIT (Exemptions) at page 4 of the order. Further information could not be submitted and hence the CIT (Exemptions) has rejected Application for Registration under Section 12AA of the Act. The learned Authorised Representative relied on plethora of judicial decisions to support the stand that the activities of the Trust are charitable. Under these facts, we feel it proper to restore the matter back to CIT (Exemptions) for fresh decision after considering all evidences brought on record and which may be brought on record in set aside proceedings and pass necessary order as per law after providing adequate opportunity and should pass a speaking and reasoned order.