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Income Tax Appellate Tribunal, DELHI BENCH “G”, NEW DELHI
Before: SHRI H.S. SIDHU & SHRI PRASHANT MAHARISHI
ORDER PER H.S. SIDHU, JM
The Assessee has filed this appeal against the impugned order dated 07/5/2015 passed by the Ld. Commissioner of Income Tax(Exemptions), Chandigarh.
2. The grounds raised in read as under:-
“1. That on the facts and in the circumstances of the case and under law action of Ld. CIT(E) in refusing registration under S. 12A(1)(aa) of Income Tax Act, 1961 is arbitrary, erroneous, unwarranted and illegal and must be quashed with direction for relief.
That on the facts and in the circumstances of the case and under law Ld. CIT(E) fell in error in refusing registration under section 12A(1)(aa) of the Act on invalid footings and erroneous considerations as reasons pointed out for rejection are not valid and as such legally the impugned order deserves to be set aside.
3. That Ld. CIT(A) is not justified in refusing registration under section 12A(1)(aa) of the Act as the impugned order dated 7.5.2015 is based on surmises and conjectures and on whimsical grounds and irrelevant considerations.
4. That Ld. CIT(E) has not specified in impugned order dated 7.5.2015, condition of S. 12AA(1)(b)(ii) of the Act being not satisfied leading to refusing registration under section 12A(1)(aa) of the Act and as such order is liable to be set aside.
5. That Ld. CIT(E) erred in refusing registration under section 12A(1)(aa) of the Act because appellant trust applied income for giving donation to another established charitable organization, the finding is against law recognized by various Hon’ble High Courts and as such order is liable to be set aside.
That Appellant Assessee craves leave to add into and / or alter, amend, substitute, modify or withdraw any of the grounds of appeal before or at the time of hearing.
The facts in brief are that an Application for grant of approval u/s. 12AA in Form No. 10A was filed by the Applicant on 14.11.2014 before the Ld. CIT(E), Hisar, which was later transferred due to change of jurisdiction to the Ld. CIT(E), Chandigarh. The Applicant Trust was created on 27.8.2014 and the same was registered with Sub Registrar, Hisar on 27.8.2014. A perusal of the Trust Deed of the Applicant shows that in clause 17 of the trust deed, it has been stated that all funds, surplus and income of this trust shall be kept in banks and the bank accounts of this trust. Whereas there is no such clause in the trust deed that the applicant trust shall invest in the modes specified in sub-section 5 of Section 11 of the Income Tax Act. As per provisions of section 11(2) of the Income Tax Act, the applicant was required to invest or deposit any money or sum accumulated or set apart in the specified modes as provided under sub-section (5) of Section 11 of the Income Ta Act.
Before the Ld. CIT(E) the Applicant Trust has submitted that in clause 24 of the Trust Deed the trustees unanimously shall have the power to dissolve the Trust in case if it is so deemed expedient and necessary and in such eventuality, the assets remaining on the date of dissolution of this Trust shall under no circumstances be distributed among the Trustees, but the same shall be transferred to another Public Charitable organization whether registered or unregistered. There is no such clause in the trust deed that the assets and properties of the trust shall be considered for transfer to any other society / trust with identical aims and objects. The Ld. CIT(E) observed that on perusal of the Income & Expenditure account of the applicant trust shows that the main expenditure was incurred by the applicant by way of donation to another trust namely Shri Krishan Parnami Manav Sewa Trust, Hisar, However, the applicant trust himself has not made any such expenditure for a charitable purpose, which is covered u/s. 2(15) of the Income Tax Act, therefore, the Applicant was not qualified for exemption u/s. 12AA of the Income Tax Act, hence, the Application for registration u/s. 12AA was rejected by the Ld. CIT(E) vide his order dated 7.5.2015.
Aggrieved with the impugned order dated 7.5.2015 passed by the Ld. CIT(E), Assessee is in appeal before the Tribunal.
At the time of hearing, Ld. A.R. of the assessee has filed a Paper Book containing pages 1 to 67 having the copy of Form No. 10A dated 14.11.2014 submitted in O/o CIT, Hisar, Regd. Trust Deed No. 6349 dated 29.8.2014, Notes on activities, Income and Expenditure Account from 27.8.2014 to 14.11.2014 and balance sheet as on 14.11.2014; provisional income and expenditure account from 27.8.2014 to 31.3.2015 and balance sheet as on 31.3.2015; registration certificate under section 34(3) of Juvenile Justice (Care & Protection of Children) Act, 2000 in the name of Shri Krishan Pranami Bal Sewa Ashram, Hisar; Thanks letter dated 11.11.2014; partywise details of expenditure during 27.8.2014 to 31.3.2015; Bank account no. of assessee with OBC, Hisar from 22.10.2014 to 6.4.2015; letter of ITO(E), Rohtak dated 16.4.2015; letter to ITO(E), Rohtak dated 22.4.2015; Letter of CIT(E), Chandigarh dated 12.3.2015; letter to CIT(E), Chandigarh dated 2.4.2015; details of voluntary contributions received by assesse Rs. 37 lacs; conformation of Gawar Construction Ltd., Gurgaon regarding donation of Rs. 37 lacs during 22.10.2014 to 31.3.2015; details of inter trust donations made in kind to Sh. Krishan Pranami Bal Sewa Ashram, Hisar at Rs. 32,79,951/- as per income and expenditure account; ITR-7 of assessment year 2015- 16; Ack. Dated 31.8.2015 of AY 2015-16; ITR-7 of AY 2016-17 and Ack.
No dated 2.8.2016 of AY 2016-17. Ld. Counsel of the assessee also certified that the above documents are on record of the Respondent and Income Tax Officer (Exemptions) and no new evidence is adduced. He further stated that Ld.CIT(E) has not considered the vital and legally tenable documentary evidences tendered, as aforesaid and passed a non- speaking order and contention raised during the proceedings before the Ld. CIT(E), which goes to the root of the matter and are very essential to adjudicate the issue in dispute. In view of the above, he requested that the issue involved in the present appeal may be set aside to the file of the Ld.CIT(A) to decide the same afresh under the law, after considering all the documents and give adequate opportunity of being heard to the assessee to substantiate his case.
On the contrary, Ld. DR opposed the request of the Ld. Counsel of the assessee and relied upon the orders of the authorities below.
We have heard both the parties and perused the records. We have gone through the order passed by the revenue authorities especially the impugned order as well as the Paper Book containing pages 1 to 67 having the copy of Form No. 10A dated 14.11.2014 submitted in O/o CIT, Hisar, Regd. Trust Deed No. 6349 dated 29.8.2014, Notes on activities, Income and Expenditure Account from 27.8.2014 to 14.11.2014 and balance sheet as on 14.11.2014; provisional income and expenditure account from 27.8.2014 to 31.3.2015 and balance sheet as on 31.3.2015; registration certificate under section 34(3) of Juvenile Justice (Care & Protection of Children) Act, 2000 in the name of Shri Krishan Pranami Bal Sewa Ashram, Hisar; Thanks letter dated 11.11.2014; partywise details of expenditure during 27.8.2014 to 31.3.2015; Bank account no. of assessee with OBC, Hisar from 22.10.2014 to 6.4.2015; letter of ITO(E), Rohtak dated 16.4.2015; letter to ITO(E), Rohtak dated 22.4.2015; Letter of CIT(E), Chandigarh dated 12.3.2015; letter to CIT(E), Chandigarh dated 2.4.2015; details of voluntary contributions received by assesse Rs. 37 lacs; conformation of Gawar Construction Ltd., Gurgaon regarding donation of Rs. 37 lacs during 22.10.2014 to 31.3.2015; details of inter trust donations made in kind to Sh. Krishan Pranami Bal Sewa Ashram, Hisar at Rs. 32,79,951/- as per income and expenditure account; ITR-7 of assessment year 2015-16; Ack. Dated 31.8.2015 of AY 2015-16; ITR-7 of AY 2016-17 and Ack. No dated 2.8.2016 of AY 2016-17. Ld. Counsel of the assessee also certified that the above documents are on record of the Respondent and Income Tax Officer (Exemptions) and no new evidence is adduced. In view of the above, we are of the view that Ld.CIT(E) has not considered the vital and legally tenable documentary evidences tendered, as aforesaid and passed a non-speaking order and contention raised during the proceedings before the Ld. CIT(E), which goes to the root of the matter and are very essential to adjudicate the issue in dispute. Therefore, in the interest of justice, the issue involved in the present appeal requires fresh adjudication by the Ld.CIT(E), as per law, after considering all the documents and give adequate opportunity of being heard to the assessee to substantiate his case. Keeping in view of the facts and circumstances of the case, the issue in dispute is set aside and restored back to the file of the Ld.CIT(E) to consider the issue in dispute afresh after giving adequate opportunity of being heard to the assessee and also consider all the documents available with the assessee.
The Assessee is also directed to submit all the necessary documents before the Ld.CIT(E) to substantiate his case and fully cooperate with the Ld.CIT(E) during the proceedings. In the result, the appeal of the assessee stands allowed for statistical purposes.
In the result, the Assessee’s Appeal stands allowed for statistical purposes.
Order pronounced in the Open Court on 09/05/2017.