BABA SAHED DR. B.R.AMBEDKAR MEMORIAL SOCIETY,VISAKHAPATNAM vs. THE CIT (EXEMTIONS), HYDERABAD

PDF · subscribers
ITA 99/VIZ/2016Status: DisposedITAT Visakhapatnam21 March 20186 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT erred in rejecting the application without proper reasoning and that the discrepancy in the incorporation date was not a valid ground for rejection. The Tribunal also noted that the assessee had responded to queries and argued that diffusion of knowledge for its members, who are from Scheduled Castes, also constitutes a charitable activity.

What were the facts?

The assessee society, registered in 1977, applied for registration under section 12AA. The CIT (Exemptions) rejected the application citing lack of income tax returns, a potentially mutual benefit object, absence of activity notes, and a discrepancy in the incorporation date on the PAN card versus the Memorandum of Association.

What were the issues?

Whether the CIT correctly rejected the 12AA registration application based on the provided reasons, including discrepancies in dates and the nature of the society's objects.

Which sections of the Income-tax Act were involved?

Section 12AA

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM

Before: SHRI B.R. BASKARAN, HON’BLE & SHRI DUVVURU R.L. REDDY, HON’BLE

For Appellant: Shri G.V.N. Hari – Advocate
For Respondent: Shri Deba Kumar Sonawal – CIT DR
Hearing: 19/03/2018

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI B.R. BASKARAN, HON’BLE ACCOUNTANT MEMBER & SHRI DUVVURU R.L. REDDY, HON’BLE JUDICIAL MEMBER ITA No. 99/VIZ/2016 M/s. Baba Saheb Dr. B.R. Ambedkar vs. CIT (Exemptions) Memorial Society, D.No. 52-14-80, Hyderabad. D.R. Ambedkar Bhavan, Srinagar, Visakhapatnam. PAN No. AACAB 0283 F (Appellant) (Respondent)

Assessee by : Shri G.V.N. Hari – Advocate. Department By : Shri Deba Kumar Sonawal – CIT DR

Date of hearing : 19/03/2018. Date of pronouncement : 21/03/2018.

O R D E R PER B.R. BASKARAN, ACCOUNTANT MEMBER

The assessee has filed this appeal challenging the order dated 28/09/2015 passed by the ld. CIT (Exemptions), Hyderabad rejecting the application filed by the assessee seeking registration under section 12A of the Act.

2.

The facts relating to the issue stated in brief are that the assessee herein was registered as a society on 13/04/1977. The assessee was formed with the following objects:- “1. To raise a Memorial Building in the name of Dr. B.R.Ambedkar at Visakhapatnam consisting of a meeting hall, library and guest house. 2. To propagate the social, cultural and educational philosophy of Dr. B.R. Ambedkar. 3. For diffusion of useful knowledge for the benefit of the members of the society.”

3.

The assessee moved an application in prescribed Form No. 10A before the ld.CIT(Exemptions), Hyderabad seeking registration under section 12AA of the Act. The ld.CIT(Exemptions), however, refused to grant registration on the following reasons:- “3. It is noticed that income & expenditure a/c, receipts & payments a/c. etc. for the year ended 31/03/2012, 31/03/2013, & 2013-14 have been filed. However, no evidence of having filed income tax returns were furnished. 4. The object clause 3 says “For diffusion of useful knowledge for the benefit of the members of the society” which shows that the intention of the society is to work for members i.e. for mutual benefit nature. 5. Though the society was started in the month of May, 1990, it has not filed notes on activities during the last 3 years as required under Rule 11AA(2) of I.T. Rules, 1962 and evidence thereof. 6. Further, on verification of information, it is noticed that as per PAN card, date of incorporation is 23/04/2013, whereas as per Memorandum of Association, the date of incorpo0ration is in 23/05/1990. Hence, it is not possible to proceed with the said application in Form No. 10A.”

4.

Aggrieved by the order passed by the ld. CIT(Exemptions), the assessee has filed this appeal before us. 5. We heard both the parties and perused the records. 6. Ld. Authorised Representative of the assessee submitted that the Ld. CIT(Exemptions) has rejected the application of the assessee without proper reasoning. He submitted that the assessee has responded to various queries raised by Ld CIT by filing its reply on 21-09-2015. He submitted that the assessee has replied that it did not file return of income for the years 31/03/2012 to 31/03/2014. He submitted that the assessee was not having taxable income. He further submitted that the members of the society are the persons of Scheduled Caste, residing in the area of the operation of the assessee- society and hence, diffusion of useful knowledge for the benefit of the members of the society would also amount to charitable activity. He further submitted that the date of incorporation of the assessee has wrongly been mentioned in the PAN card, and the same cannot be a ground for rejection of application of the assessee when the registration given by the Registrar of Societies is available on record. He further submitted that the assessee has been carrying on activities relating to its objects and has replied the same to Ld. CIT, vide letter dated 21/09/2015. Accordingly, the ld. Authorised Representative of

the assessee contended that the ld. CIT (Exemptions) was not justified in rejecting the application filed by the assessee. Accordingly he prayed that the Ld CIT may be directed to grant registration to the assessee. 7. On the contrary, ld. Departmental Representative strongly supported the order passed by the ld. CIT(Exemptions). 8. Having heard the rival contentions, we find merit in the contentions of the assessee that reasoning given by ld.CIT(Exemptions) for rejecting the application of the assessee are not adequate to warrant registration. From the submissions made by the ld. Authorised Representative of the assessee, we notice that the assessee has furnished its replies to various queries raised by the Ld.CIT. Since the members of the trust belong to Scheduled Caste, Explanation 2 to sec. 13 of the Act will come to the protection of the assessee. The date of formation of the trust mentioned in the PAN card was a mistake, since the date of formation of the association is the date on which the incorporation certificate is given by the Registrar of Socieites. The assessee has furnished reasons for non-filing of return of income for FY ended 31.3.2012 to 31.3.2014 and, in fact, during that period, no registration u/s 12AA was available. Since the assessee has filed Form No.10A on 31.3.2015, it appears that the

assessee is seeking registration for subsequent years only. Though the assessee has mentioned some of the activities undertaken by it in the reply filed to Ld. CIT, probably, the Ld. CIT may be expecting detailed report on the activities. 9. Under the set of facts, we are of the view that the application filed by the assessee should be processed afresh in accordance with law. Accordingly, we set aside the order passed by the ld.CIT(Exemptions) and restore all the issues to his file with a direction to process the application of the assessee afresh, in accordance with law after affording adequate opportunity of being heard to the assessee. We also direct the assessee to furnish all the details that may be called for by Ld. CIT in this regard. 10. In the result, appeal filed by the assessee is treated as allowed for statistical purposes. Order Pronounced in open Court on this 21st day of March, 2018.

Sd/- sd/- (DUVVURU R.L. REDDY) (B.R. BASKARAN) Judicial Member Accountant Member Dated : 21st March, 2018. vr/-

Copy to: • The Assessee-M/s. Baba Saheb Dr. B.R. Ambedkar Memorial Society, D.No. 52-14-80, D.R. Ambedkar Bhavan, Srinagar, Visakhapatnam. • The Revenue – CIT (Exemptions), Hyderabad. • The D.R., Visakhapatnam. • Guard file. By order

(VUKKEM RAMBABU) Sr. Private Secretary, ITAT, Visakhapatnam.

More judgments on Section 12AA

All 4,243 judgments and leading authorities on Section 12AA →

Recent GST High Court judgments

Search GST case law →