CHANDERNAGORE BARASAT GATE CULTURAL ASSOCIATION,HOOGHLY vs. CIT-XX, KOLKATA, KOLKATA

There is a delay of 3 days in filing these appeals. It has been explained by the assesse in an application filed for condonation of delay that the delay was because of the mistaken belief of the assessee’s tax consultant that the impugned orders were received by the assessee on 28.04.2014 wherein the orders were received by the assessee on 25.04.2014. The delay in filing the appeal due to the above reason is accepted as reasonable and sufficient cause and the delay in filing the appeal is condoned.

As far as the merits of the appeals are concerned, we shall first take up for consideration appeal against the order u/s 12AA(3) of the Act. The factual background ITA No.1468 & 1469/Kol/2014 Chandernagore Barasat Gate Cultural Association of this appeal is that the assessee is a Society registered w.e.f. 08.03.1995 under the West Bengal Societies Registration Act, 1961. The objects of the society were found to be charitable in nature and the assessee was granted registration u/s 12A of the Act by CIT-IX, Kolkata certificate dated 20.11.1998, a copy of which is placed at page 8 of the assessee’s paper book. The assessee also got approval u/s 80G of the Act vide approval dated 27.07.2005 valid upto 31.03.2007.

The institution did not renew the approval u/s 80G(5)(vi) within the expiry the validity period. Belatedly, it applied on 8/9/2010 for renewal of the approval, On examining the case, the then CIT-XX, Kolkata was not satisfied Jut the degree of pursuit of charitable purposes. He turned down the application in his order dated 30/3/2011. As a result, the assessee-trust did not get the extension of approval u/s 80G(5)(vi) since 1/4/2007. On the basis of the findings emanating from the renewal proceedings u/s 80G(5)(vi) that the extent of charitable activities is not satisfactory, this office registered the institution u/s 12AA(3) in our order dated 31/3/2011. Being aggrieved, the institution preferred appeal before the Ld. ITAT against both the orders. In its order dated 22/8/2011 against 860 & 861/KoI/2011, Ld. ITAT-'B'- Bench, Kolkata made the following observations:- 1. The order of the Ld. CIT-XX is set aside with the direction to consider the registration u/s 12A afresh 2. In view of the amendment vide Finance Act, 2009 read with the CBDT circular no. 7/2010 dated 27/~0/20 0, no permission is required for renewal of approval u/s 80G(5)(vi) 5. Pursuant to the order of the Tribunal the CIT took for consideration the question of cancellation of Registration of the assessee u/s 12AA(3) of the Act. There was a hearing before the CIT on 24.03.2014. The CIT had pointed out that the Treasurer and Joint Secretary of the assessee about non filing of Tax Audit Report in Form-10B for F.Y.2008-09, 2009-10 and 2010-11. The CIT after referring the above aspect further observed as follows in the impugned order :

Based on the cancellation of registration u/s 12AA(3) of the Act and other reasons the CIT withdrew the approval granted u/s 80G(5) (vi) of the Act also. The following were the observations of the CIT in this regard : “ The' institution has been de-registered u/s 12AA(3) of IT Act'61 vide order no.5954 dated 31/3/2014. In view of this, the institution does not satisfy the condition laid down in section 80G(S)(i) of IT Act. Thus in terms of rule 11AA(5) of Income-tax Rules, 1962, the institution cannot be granted approval u/s 80G(5)(vi) of IT Act'61. This apart, the accounts also reveal that institution was primarily engaged in religious and cultural activities. Amount spent after charitable activities and general public utility stands at minimal. In the course of hearing, the attention of the Ld. AR was drawn to the section 80G(5B) that makes' an institution ineligible for grant of approval u/s 80G, if the share of religious expenditure exceeds 5%. Accounts of the institution show that this provision is attracted. It is relevant to quote the relevant portion of the Board's circular 7/2010 dated 27/10/2010:- 'To remove any doubts in this regard. it is reiterated that any approval under section 80G(5) on or after 1-10-2009 would be a one time approval which would be valid till it is withdrawn. Thus there is a provision for withdrawal of the approval in the hands of the authority. Besides, the approval given last time was valid till 31/3/2007. In the light of the above discussion, the institution cannot enjoy the approval u/s 80G(5) vi) beyond this date, unless of course, it is specifically granted in future.”

Aggrieved by the aforesaid orders of the CIT, the assessee has filed the present appeals before the Tribunal.

We have heard the rival submissions. The ld. Counsel for the assessee brought to our notice that the date of hearing before the CIT was 24.03.2014 and the assessee’s representatives were given only three days time to respond to queries raised by the CIT. The assessee sent a very detailed reply to all the queries of the CIT vide its letter dated 16.04.2014. The CIT has however passed the order on 31.03.2014 even before the assessee’s reply could reach the CIT. The reply of the assessee dated 16.04.2014 reached the CIT after the impugned orders were passed.

We have seen the reply dated 16.04.2014 and the annexures to the said letter. These are available at pages 111 to 381 of the assessee’s paper book. In this reply the assessee has explained the nature of its activities and as to how they are not religious in nature. The ld. Counsel for assessee has also brought to our notice that the main object of the assessee is to evolve sense of social and religious tolerance. 10. We have considered his submissions and are of the view that the impugned orders have to be set aside and remanded to the CIT for fresh consideration as there was lack of proper opportunity of being heard afforded to the assessee or availed by the assessee. The reply of the assessee dated 16.04.2014 together with its annexures should be considered afresh by the CIT. The CIT should afford opportunity of being heard to the assessee before deciding the case and also permit the assessee to file such other documents and evidence as may be necessary as called upon by the CIT. The assessee shall duly and diligently attend the proceedings and extend cooperation to enable expeditious disposal by the CIT. 11. In the result the appeals are treated as allowed for statistical purposes. Order pronounced in the open Court on 01.03.2018.