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Income Tax Appellate Tribunal, LUCKNOW BENCH “B”, LUCKNOW
Before: SHRI. A. D. JAIN & SHRI T. S. KAPOOR
PER A.D. JAIN, V.P.: This is assessee’s appeal against the order of the ld. CIT (Exemptions), Lucknow, dated 26.12.2017, refusing grant of registration under section 12A of the Income Tax Act, 1961. The assessee has raised the following Grounds of Appeal: 1. The Ld. C.I.T. (Exemption) erred on facts and in law in rejecting the Registration u/s 12AA of I. T. Act vide order dated 26.12.2017 u/s 12AA(1)(b)(ii) of I. T. Act solely on technical ground without appreciating that the Trust was incorporated on 31.08.2016 and there is no activities except the construction activities of Building. 2. That reasons for rejection are very technical and the same has not been confronted, thus without allowing an opportunity to submit the explanation on the reasons, there is a violation of natural justice.
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The Ld. CIT (Exemption) without allowing an opportunity held that the land belongs to Mr. Gulam Rasool, father of the Trustee without confronting the same and appreciating the fact that Mr. Gulam Rasool had submitted 'no objection' in this regard and made a lease agreement' of land with Trust for the purpose of the objects of Trust which are as per section 2(15) of I. T. Act. 4. The Ld. C.I.T.(Exemption) did not appreciate that provisions of section 13(1)(c) are not applicable in the present sets of facts and circumstances as the land has been leased to trust for charitable activities of the trust. In this regard detailed submission with supporting evidence regarding objects, activities, bank accounts, bills and vouchers were submitted on 20.12.2017. 5. The rejection by Ld. C.I.T.(Exemption) on the basis of technical reasons without confronting the same is contrary to the facts, law and principle of natural justice without allowing an opportunity to have its say on the reasons relied upon by him.
There is a delay of 827 days in filing of the appeal. The assessee has filed an application dated 27.7.2022, seeking condonation of delay in filing of the appeal, stating therein that the impugned order of Ld. C.I.T. (Exemption) was received on 30.12.2017 by the main Trustee of the assessee Trust, Shri Mohd. Saleem, who was looking after the affairs of the Trust and taxation matters; that however, due to Search and Seizure Operation in the business concerns in January, 2018, he was under pressure and suffering from severe illness being a diabetic and heart patient; that the Doctors attending to him advised him rest; that due to his serious illness, he forget to send the order to their C.A. Shri Ishtiyak Ali, who was looking after the taxation matters of the assessee Trust; that due to this reason, the C.A., Shri Ishiyak Ali could not contact the Counsel, Shri K. R.
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Rastogi, C.A. for preparation of appeal; that in addition to this due to Nationwide lockdown on account of Covid-19, the appeal could not be prepared, as Office of the Counsel, Shri K. R, Rastogi, C.A. was closed; that therefore, the delay in filing the appeal was solely unintentional; and that therefore, the delay in filing of the appeal be condoned. The application is supported by an affidavit of the Trustee, Shri Mohd. Saleem and also the copies of various Medical Treatment Prescriptions by Dr Almas Qureshi of Healing Hands Clinic, Laxmi Nagar, Delhi have been filed. The aforesaid facts as detailed in the application for condonation of delay are duly buttress by the affidavit of the Trustee and the Medical documents. The assessee was, in these facts, combined with the onslaught of the Covid – 19 Pandemic, prevented by sufficient cause from filing the appeal in time. Otherwise too, it cannot be gainsaid that the assessee will not stand to gain anything by intentionally delaying the filing of the appeal in time. Therefore, the delay is hereby condoned. 3. The facts of the case are that the assessee filed an application for registration under section 12A(1) of the Income- tax Act, 1961 on 12.6.2017 before the CIT (Exemptions), Lucknow. The ld. CIT (Exemptions) rejected the application of the assessee, vide his order dated 26.12.2017, observing that the applicant-Assessee has failed to provide sufficient material to corroborate the charitable nature of the objects and genuineness of the activities. 4. The ld. Counsel for the assessee has submitted that the ld. CIT (E) erred on facts and in law in rejecting the Registration under section 12AA of the Income Tax Act, solely on technical ground without appreciating that the Trust was incorporated on 31.08.2016 and there is no activity except the construction
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activities of the building; that the reasons for rejection are very technical and the same have not been confronted to the applicant and, therefore, the order passed by the ld. CIT (E), without affording an opportunity to the applicant to furnish its explanation, is a clear violation of the principles of natural justice; that without affording an opportunity of hearing, the ld. CIT (E) held that the land belongs to Mr. Gulam Rasool, father of the Trustee, whereas the fact is that Mr. Gulam Rasool had submitted no objection in this regard and had made a lease agreement of the land with the Trust for the purpose of the objects of the Trust, which are as per section 2(15) of the Income Tax Act; that the ld. CIT (E) did not appreciate that the provisions of section 13(1)(c) of the Income Tax Act are not applicable in the present sets of facts and circumstances, as the land has been leased to the Trust for charitable activities of the Trust and in support of the same, a detailed submission, with supporting evidence regarding the objects, activities, bank accounts, bills and vouchers was furnished on 20.12.2017; and that therefore, the rejection of the application for grant of registration by the ld. CIT (E), on technical reasons, and without confronting the same to the assessee, is in gross violation of the principles of natural justice. 5. The ld. D.R., on the other hand, placing reliance on the impugned order of the ld. CIT (E), submitted that the applicant had failed to provide sufficient material to corroborate the charitable nature of the objects and genuineness of the activities, despite providing ample opportunity to the applicant to substantiate its claim that therefore, the ld. CIT (E) was justified in not granting registration to the applicant-Trust; and that hence, the order of the ld. CIT (E) is entitled to be upheld.
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Heard. The assessee filed an application for registration under section 12A(1) of the Income-tax Act, 1961 on 12.6.2017 with the CIT (Exemptions), Lucknow, who rejected the application of the assessee, observing that the applicant-Assessee has failed to provide sufficient material to corroborate the charitable nature of the objects and genuineness of the activities. The submission of the ld. Counsel for the assessee before us was that the assessee had filed before the ld. CIT(E) all the requisite documents, including the brief details of main area of the trust activities and the objectives of the Trust. The submission of the ld. Counsel for the assessee was that the Trust was incorporated on 31.08.2016 and there is no activity except the construction activities of the Building; and that the ld. CIT(E) did not appreciate that the provisions of section 13(1)(c) of the I.T. Act are not applicable in the present sets of facts and circumstances, as the land has been leased to the Trust for charitable activities of the Trust. In this regard, a detailed submission, with supporting evidence regarding the objects, activities, bank accounts, bills and vouchers, was submitted before the ld. CIT (E) on 20.12.2017. But, the ld. CIT (E) has not examined the objects of the assessee-trust, whether the trust was formed to undertake charitable activities or not. Moreover, the ld. CIT (Exemption), Lucknow has not pointed out any specific activity, which can be said to be a non-charitable activity. It is a settled position of law that while granting registration under section 12A of the Act, the ld. CIT (Exemptions) is required to examine the objects of the assessee. If the objects of the assessee are charitable in nature, registration should be granted to the assessee. It can only be denied, if the ld. CIT (Exemptions) has brought something on record to establish that the assessee was
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engaged in activities other than charitable ones. This aspect was examined by this Bench of the Tribunal in various cases, wherein, the Tribunal held that while granting registration under section 12A of the Act, the ld. CIT (Exemptions) is required to examine, as to whether the objects of the applicant are of charitable nature or not. In the instant case, the ld. CIT (Exemptions) has not examined the nature of the objects of the trust, but he has denied the registration. Therefore, we set aside the order of the ld. CIT (Exemptions) and restore the matter to his file with a direction to re-adjudicate the issue of grant of registration under section 12A of the Act in the light of the objects of the assessee-trust, preferably within two months from the date of receipt of this order, on affording due opportunity of hearing to the assessee. 7. In the result, the appeal of the assessee is treated as allowed for statistical purposes. Order pronounced in the open Court on 10/08/2022.
Sd/- Sd/- [T. S. KAPOOR] [A. D. JAIN] ACCOUNTANT MEMBER VICE PRESIDENT
DATED:10/08/2022 JJ: