RAJKALI MOHALLAL TRUST,LUCKNOW vs. COMMISSIONER OF INCOME TAX (EXEMPTION), LUCKNOW

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ITA 737/LKW/2017Status: DisposedITAT Lucknow04 July 2022AY 2016-174 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found a discrepancy regarding the production of books of account and vouchers. Therefore, the Tribunal decided to remit the issue back to the CIT (Exemptions) for fresh adjudication.

What were the facts?

The assessee trust applied for registration under Section 12A of the Income Tax Act. The CIT (Exemptions) rejected the application, citing the lack of charitable activities and non-production of books of account and vouchers for verification.

What were the issues?

Whether the CIT (Exemptions) was justified in rejecting the application for registration under Section 12A without proper verification of the assessee's activities and accounts.

Which sections of the Income-tax Act were involved?

Section 12A

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Income Tax Appellate Tribunal, LUCKNOW BENCH ‘B’, LUCKNOW

Before: SHRI A. D. JAIN & SHRI T. S. KAPOOR

For Appellant: Shri Rakesh Garg, Advocate
For Respondent: Smt. Sheela Chopra, CIT, D.R
Hearing: 09/06/2022Pronounced: 04/07/2022

This is an appeal filed by the assessee against the order of learned CIT (Exemptions) Lucknow dated 21/09/2017 rejecting the application of the assessee filed for registration u/s 12A of the Act.

2.

Learned counsel for the assessee, at the outset, submitted that there is no dispute about the charitable nature of the objects of the society and in this respect our attention was invited to paper book pages 8 to 24 where the copy of trust deed was placed. It was submitted that the only reason for rejection of the application u/s 12A is that the assessee has not carried out any charitable activities. In this respect our attention was invited to paper book pages 25 to 32 where certain copies of newspaper cuttings, highlighting the activities being carried out by the assessee, were placed. It was submitted that these evidences regarding activities of the trust were submitted to learned CIT (Exemptions) and therefore, the findings of learned CIT that no activity has been carried out by the assessee is not correct. Without prejudice it was submitted that at the time of considering registration u/s 12A, the learned CIT (Exemptions) is required to examine only the objects of the assessee which undoubtedly are charitable in nature. As regards the observation of learned CIT (Exemptions) that books of account and vouchers were not produced for verification, Learned counsel for the assessee invited our attention to pages 1 - 4 and 5 - 7 of the paper book where the assessee, in a reply to CIT (Exemptions), has mentioned that books of account in the form of cash book, journal, ledger and vouchers were available for verification and therefore, it was argued that the findings of learned CIT (Exemptions) are wrong and it was prayed that learned CIT (Exemptions) be directed to grant registration u/s 12A of the Act. Reliance in this respect was placed on the following case laws:

(1) Order of Lucknow Bench of the Tribunal in the case of Dr. Vishwambhar Singh Swatantrata Senani Pratap Singh Samajik Evam Shaikshit Vikas Samiti vs. CIT (Exemptions), order dated 28/02/2018 (2) Order of Lucknow Bench of the Tribunal in the case of Chokhraj Tulsyan Saraswati Vidya Mandir Inter College vs. CIT (Exemptions), I.T.A. No.691/Lkw/2017, order dated 22/02/2018 (3) Order of Lucknow Bench of the Tribunal in the case of Raj Karan Matadan Charitable Trust vs. CIT (Exemptions), I.T.A. No.190/Lkw/2016, order dated 07/12/2017 (4) Order of Lucknow Bench of the Tribunal in the case of B.C. Sharma Memorial Society vs. CIT (Exemptions), I.T.A. No.588/Lkw/2016, order dated 08/01/2018

(5) Order of Hon'ble Allahabad High Court in the case of CIT (Exemptions) vs. Shreedhar Sewa Trust, of 2017, order dated 07/09/2017 (6) Order of Hon'ble Allahabad High Court in the case of CIT vs. Shri Advait Ashram Society, I.T.A. No.439 of 2009, order dated 08/11/2012 (7) CIT vs. Red Rose School [2007] 163 Taxman 19 (All)

3.

Learned CIT, D.R., on the other hand, submitted that ld CIT (Exemptions) has categorically mentioned in his order that on 07/09/2017 the assessee did not produce books of account and rather filed part reply and sought adjournment for verification of books of account and vouchers and for filing remaining reply to 21/09/2017. Learned CIT, D.R. further submitted that on 21/09/2017, again the books of account were not presented for verification and therefore, in the absence of verification regarding activities of the assessee, the learned CIT (Exemptions) was not able to record his satisfaction that the activities of the assessee were genuine and, therefore, he dismissed the application of the assessee and therefore, it was prayed that the appeal filed by the assessee may be dismissed.

4.

We have heard the rival parties and have gone through the material placed on record. We find that on 07/09/2017, learned CIT (Exemptions) has categorically held that the assessee had sought adjournment for producing books of account and vouchers whereas in the written submissions dated 07/09/2017, placed at pages 5-7 of the paper book, the assessee in his reply, vide point number 17, has mentioned that books of account etc. were available for verification. Similarly, on 21/09/2017 the assessee had claimed to have presented books of account and vouchers for verification by learned CIT (Exemptions), but we find that on 21/09/2017 itself, the learned CIT (Exemptions) has passed the order rejecting the application of the assessee. While dismissing the application of the assessee, the learned CIT (Exemptions) has commented that books of account and vouchers were not produced for verification. In view of the above facts and circumstances, we deem it appropriate to remit the issue back to learned CIT (Exemptions) for his readjudication on the application filed by the assessee for registration u/s 12A of the Act. Learned CIT (Exemptions) is directed to pass the fresh order within a period of two months and the assessee is also directed to co-operate in the proceedings before CIT (Exemptions) so that CIT (Exemptions) could form his satisfaction as to whether the activities of the assessee are genuine with respect to objects of the assessee or not. In view of the above the appeal of the assessee stands allowed for statistical purposes.

5.

In the result, the appeal of the assessee stands allowed for statistical purposes.

(Order pronounced in the open court on 04/07/2022)

Sd/. Sd/. ( A. D. JAIN ) ( T. S. KAPOOR ) Vice President Accountant Member Dated:04/07/2022 *Singh Copy of the order forwarded to : 1. The Appellant 2. The Respondent. 3. Concerned CIT 4. The CIT(A) 5. D.R., I.T.A.T., Lucknow

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