SDPS TRUST,NOIDA vs. CIT(E), LUCKNOW

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ITA 5567/DEL/2015Status: DisposedITAT Delhi19 September 20175 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the assessee was not given an adequate opportunity of being heard before the order was passed. Therefore, the matter was set aside to the Commissioner for a fresh decision.

What were the facts?

The assessee society applied for registration under Section 12A of the Income Tax Act. The Commissioner of Income Tax (Exemptions) rejected the application as the assessee failed to provide books of accounts and vouchers to prove the genuineness of its charitable activities.

What were the issues?

Whether the Commissioner erred in rejecting the registration application without providing adequate opportunity of being heard to the assessee.

Which sections of the Income-tax Act were involved?

Section 12A,Section 12AA

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI ‘C’ BENCH,

For Appellant: Shri Gautam Kumar Basu, Chairman
Hearing: 30.08.2017Pronounced: 19.09.2017

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘C’ BENCH, NEW DELHI BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER. SDPS Trust Vs. The CIT[E] Flat C – 96, Pocket - 1 Lucknow Kendriya Vihar 2, Sector 82 Noida PAN : AANTS 4310 A [Appellant] [Respondent] Date of Hearing : 30.08.2017 Date of Pronouncement : 19.09.2017 Assessee by : Shri Gautam Kumar Basu, Chairman Revenue by : Shri Arun Kumar Yadav, Sr. DR ORDER PER B.P. JAIN, ACCOUNTANT MEMBER:

This appeal of the assessee arises from the order of the ld. CIT(E), Lucknow vide order dated 13d.09.2015 passed u/s 12AA(1)(b)(ii) of the Income-tax Act, 1961 [hereinafter referred to as 'the Act' for short] .

2.

Facts in brief are that appellant society has filed an application for registration u/s 12A(a) of the Income Tax Act, 1961 on 16.01.2015 with the Commissioner of Income Tax(Exemptions),

-2- Lucknow. Subsequently, the applicant society was accorded an opportunity of being heard vide letter F.No. CIT (Exemp.) /Lko/Registration u/s 12AA & 80G/2015-16/3198 dated 18.05.2015 sent to the applicant on address provided by him by Speed Post, calling for specific queries regarding its application for registration u/s 12A for 13.07.2015, However, on that date i.e. 13.07.2015 no one appeared, nor any application for adjournment was received. The applicant was well aware that this application will get barred by limitation shortly, still no compliance has been made by applicant.

3.

After considering the material available on record, the ld. CIT(E) observed that the applicant society could not produce the books and vouchers in respect of expenses claimed by the applicant for verification of activities of the trust. On perusal of material available on record, it was seen that the applicant society was not carrying out any charitable activities. Due to the fact of not producing the books of accounts and vouchers by the applicant, the genuineness of activities could not be verified. As per provision of section 12AA(1)(b) of the Act, two factors namely, the object of charitable purpose and the genuineness of activities have to be proved before granting the registration. However, the applicant failed to prove the same. The ld.

-3- CIT(E) observed that the assessee appears to be running the activities purely on commercial lines for profit motive. Hence, the applicant society has not made out a case for granting the registration u/s 12AA(1)(b). It was clear that sufficient material required for satisfaction regarding charitable purpose of the trust in this case has not been made available by the applicant. In view of the facts and above decisions, the ld. CIT(E) did not accept the applicant's claim in absence of sufficient material required for formation of satisfaction. Therefore, he did not find the case fit for grant of registration u/s 12A(1) of the Income-tax Act, 1961 and rejected the same.

4.

From the perusal of the said order of the ld. CIT(E), it is evident that the date of the order in the present case is 13.07.2015. The case was adjourned for 18.05.2015, 25.06.2015 and 13.07.2015 on which date it was alleged that no one appeared on behalf of the assessee and the ld. CIT(E) reached to a conclusion that there is no sufficient material on record that the assessee is an institution being carried on for charitable purposes. The ld. CIT(E) further observed that it is not a fit case for grant of registration u/s 12AA(1) of the Act.

5.

After hearing the parties, we find that no show cause notice was given to the assessee by the ld. CIT(E) with regard to the passing of the order and on the date of hearing i.e. 13.07.2015 when none appeared on behalf of the assessee, he passed the order without providing any adequate opportunity of being heard to the assessee. Since u/s 12AA(ii) the case gets time barred on 31.07.2015 and in the absence of any show cause notice to the assessee the case was decided by the ld. CIT(E) without affording adequate opportunity of being heard to the assessee. We find it appropriate to reproduce the relevant provisions u/s 12AA(ii) of the Act as hereinbelow:

“Every order granting or refusing registration under clause (b) of sub section(1) shall be passed before the expiry of six months from the end of the month in which the application was received under clause (a) of section 12A”.

6.

In view of the above facts and circumstances of the case and in the interest of justice, the matter is set aside to the file of the ld. CIT(E) with the direction to decide the case de novo. Needless to mention that adequate opportunity of being heard will be afforded to the assessee. Accordingly, the sole ground raised by the assessee is allowed for statistical purposes.

7.

In the result, the appeal of the assessee is allowed for statistical purposes. The order is pronounced in the open court on 19.09.2017.

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