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Income Tax Appellate Tribunal, ‘’ B’’ BENCH, AHMEDABAD
Before: SHRI RAJPAL YADAV & SHRI WASEEM AHMED
आदेश/O R D E R
PER WASEEM AHMED, ACCOUNTANT MEMBER:
The captioned appeal has been filed at the instance of the Assessee against the order of the Learned Commissioner of Income Tax-1, Baroda, dated 30/09/2014 arising in the matter of assessment order passed under s. 12AA(1)(b)(ii) r.w.s 12A(a) of the Income Tax Act, 1961 (here-in-after referred to as "the Act").
ITA no.309/AHD/2015 A.Y. N.A 2
The assessee has raised the following grounds of appeal:
1. The order of the Learned Commissioner of Income Tax-1, Baroda is against law and facts of the case. 2 The Learned Commissioner of Income Tax, Baroda erred in rejecting the application for registration u/s 12A of the I.T.Act,1961,The Learned CIT erred in holding that the appellant is engaged in pure commercial activities and is not a charitable entity. 3 The Learned Commissioner of Income Tax erred in summarily holding that the appellant is engaged in purely commercial activity of letting out of trust property and the same is not charitable in nature. 4 It is prayed that the trust be granted registration u/s 12A(a) of I.T,Act,1961. The Appellant craves leave to add to, or alter by deletion, substitution or otherwise the above grounds of appeal before or during the hearing of appeal.
3. The only issue raised by the assessee is that learned CIT exemption erred in rejecting the application filed for the registration under section 12A of the Act on the reasoning that the assessee is engaged in commercial activities.
Briefly stated facts are that the assessee in the present case is a trust registered with the Charity Commissioner dated 6 January 1987. The assessee applied for registration under section 12A of the Act in form No. 10A dated 18 March 2014. However, the learned CIT exemption found that the assessee has shown income from other sources of ₹ 10,85,704, ₹19,80,571 and ₹ 16,32,694 in the income and expenditure account for the year ending 31 March 2011, 31 March 2012 and 31st March 2013 respectively. As per the learned CIT exemption, the impugned income from other sources was representing inter alia the license fees for allowing the use of the immovable property of the trust, service fees for the use of the conference hall and hire charges of the Mandap.
4.1 The learned CIT exemption also found that the assessee for providing frash- khana and decoration facilities to the parties hiring the Masonic Hall maintained by the trust has entered into an agreement with M/s Shree Labh Decorators against the annual charges of ₹15 lakhs.
ITA no.309/AHD/2015 A.Y. N.A 3 4.2 There was the donation paid by the assessee to other trust for charitable purposes for the negligible amount of Rs. 2,26,249 and 6,17,227 in the previous year 2012-13 and 2013-14 respectively. In view of the above, the learned Commissioner of income tax exemption doubted on the genuineness of the activities and concluded that it is not eligible for registration under section 12A of the Act. As per the ld. CIT- Exemption, the activities of the trust were commercial in nature. Thus, the learned CIT exemption rejected the application filed by the assessee for the registration under section 12A of the Act.
Being aggrieved by the order of the learned CIT exemption, the assessee is in appeal before us.
The learned AR for us filed a paper book running from pages 1 to 320 and also filed the additional evidences in the form of additional paper book running from pages 1 to 60 which is available on record. The learned AR before us submitted that the assessee has amended the trust deed which has been filed 1st time before ITAT for the admission of the same as the additional evidence under rule 29 of ITAT rules. Accordingly, the learned AR requested before us to set aside the issue to the file of the learned CIT exemption for fresh adjudication after considering the additional evidences as per the provisions of law.
On the contrary the learned DR opposed to admit the addition evidences filed by the assessee. The learned DR vehemently supported the order of the authorities below.
We have heard the rival contentions of both the parties and perused the materials available on record. From the preceding discussion, we note that the learned CIT exemption has given a categorical finding that the activities of the assessee are not charitable in nature which is the precondition for obtaining the ITA no.309/AHD/2015 A.Y. N.A 4 registration under section 12A of the Act. It is also implied that objects of the assessee prior to the amendment were not in consonance with the charitable objects. Hence the assessee had to amend such objects. The amended objects are placed on record in the paper book containing additional evidences.
8.1 With regard to the additional evidences filed by the assessee, we note that amended trust deed was approved in the month of February 2021 whereas the order for rejecting the registration application under section 12A of the Act was passed dated 30 September 2014 by the learned Commissioner of income tax exemption. Thus, there was no occasion or possibility for the assessee to file the amended trust deed before the learned CIT exemption.
8.2 Be that as it may be, in the interest of justice and fair play we admit the additional evidences filed by the assessee and restore the issue to the file of the learned CIT (A) exemption for fresh adjudication of the application for registration under section 12A of the Act as per the provisions of law. Hence the ground of appeal of the assessee is allowed for the statistical purposes.
In the result, the appeal filed by the assessee is allowed for the statistical purposes.
Order pronounced in the Court on 04/01/2022 at Ahmedabad.