KALYANKARI PRATISHTHAN,NASHIK vs. COMMISSIONER OF INCOME-TAX 1,

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ITA 1582/PUN/2014Status: DisposedITAT Pune01 June 20184 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that principles of natural justice were not complied with as the assessee could not appear due to a family death and subsequent issues. Therefore, the matter was remanded to the CIT for fresh adjudication.

What were the facts?

The assessee, a trust, applied for registration under Section 12AA and exemption under Section 80G of the Income Tax Act. The CIT rejected the applications because the assessee failed to appear for hearings and prove the genuineness of expenses and charitable work.

What were the issues?

Whether the rejection of registration and exemption by the CIT was justified without providing a proper opportunity of being heard to the assessee.

Which sections of the Income-tax Act were involved?

Section 12AA,Section 80G

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE

Before: SHRI D.KARUNAKARA RAO, AM & SHRI VIKAS AWASTHY, JM

For Appellant: Shri Dhiraj Subhash Dandgaval
For Respondent: Shri Navaljit Kapoor, CIT
Hearing: 31.05.2018Pronounced: 01.06.2018

आदेश आदेश / ORDER आदेश आदेश

PER D. KARUNAKARA RAO, AM :

There are two appeals filed by the assessee under consideration against the two separate orders of the CIT commonly dated 27-06-2014 under section12AA and section 80G of the Act respectively. Rejection of registration of the trust and also of the exemption u/s.80G of the Act are the issues raised in these two appeals.

We shall take up the appeal ITA No.1582/PUN/2014 first relating to rejection of request for registration u/s.12AA of the Act.

2.

Grounds raised by the assessee are extracted as under :

“1. The Hon’ble CIT-1, Nashik erred in appreciating the submissions, rather taking them on record while passing his order rejecting application made u/s.80G and 12A of the Income Tax Act, 1961. 2. The Hon’ble CIT-1, Nashik erred in rejecting the registration of trust u/s.12AA by holding that the objects carried on by the trust are community specific.

3.

The order dated 27-06-2014 pronounced by the Hon’ble CIT-1, Nashik rejecting the exemption u/s.80G as well as order dated 27-06- 2014 of the Income Tax Act rejecting the exemption u/s.12A, be set aside and the Hon’ble CIT-1, Nashik be directed to grant the exemption of the same of the Income Tax Act, 1961 to the appellant trust. 4. The appellant craves leave to add, alter or withdraw any of the grounds of appeal.”

3.

Briefly stated relevant facts of the case are that the assessee is a

Trust and filed Form No.10A for registration of Charitable or Religious

Trust u/s.12AA of the Act. Trust was created on 27-07-2012 under the

Bombay Public Trust Act, 1950. The objects of the trust revolve around

the charity benefits to a particular communicated called “Ladshakiya

Wani Samaj”. As per the proceedings u/s.12AA of the Act, CIT-1,

Nashik issued letters dated 20-05-2014, 19-06-2014 posting the case to

29-05-2014 and 26-06-2014 respectively to hear the assessee. On both

the occasions, for one reason or the other, assessee did not appear.

Consequently, the CIT vide Para No.5 of his order observed as under :

“5. None attended on behalf of the appellant trust on the said dates and thus the assessee trust has failed to prove that expenses were genuine and incurred towards the objects of the trust. The assessee has also failed to prove that the trust was engaged in genuine work of charitable in nature.”

Resultantly, the CIT rejected the application made by the assessee for

registration u/s.12AA of the Act as well as the claim of exemption

u/s.80G of the Act. Aggrieved with the same, the assessee is in appeal

before us.

4.

Deviating from the grounds raised before us, Ld. Counsel for the

assessee submitted that the assessee could not appear before the CIT

as there was death in the family of a main trustee, who is aware of the

facts of the trust. On the second occasion also, the assessee could not

appear on the specified date. Further, he mentioned that the trustee

appeared on the subsequent date and however, there is no evidence to

support the same. In the written submissions, assessee’s

representative submitted that, on similar facts in various cases, the

registration/exemption was granted u/s.12AA/80G of the Act. Further,

Ld. Counsel submitted that considering the fact that the assessee need

to represent before the CIT, this matter may be restored to the file of AO

for fresh adjudication.

5.

On hearing both the parties and the Ld. DR for the Revenue who

dutifully relied on the order of CIT, we are of the opinion that, on the

facts of the present case, the principles of natural justice are not

complied with for one reason or the other by either party of the

litigation. Considering the same, we are of the opinion that there is

requirement of scrutinizing the activities of the trust and if they are in

tune with the objects of the trust. There are number of decisions as

cited by the Ld. Counsel for the assessee before us which require to be

considered in the remand proceedings. Therefore, we remand the all

the grounds in the appeal to the file of CIT for fresh adjudication after

granting reasonable opportunity of being heard to the assessee.

Assessee is also directed to appear before the CIT with all the requisite

documents. Accordingly, the grounds raised by the assessee are

allowed for statistical purposes.

6.

In the result, the appeal of the assessee is allowed for statistical

purposes.

ITA No.1583/PUN/2014 – Section 80G of the Act

7.

We find the result of the CIT’s finding in appeal ITA

No.1582/PUN/2014 shall have effect on this appeal since this appeal

pertains to claim u/s.80G of the Act. Therefore, the issues raised in

this appeal are also stand remanded to the file of CIT for fresh

adjudication after granting reasonable opportunity of being heard to the

assessee. Accordingly, the grounds raised by the assessee are allowed

for statistical purposes.

8.

In the appeal, the appeal of the assessee is allowed for statistical

purposes.

9.

To sum up, both the appeals of the assessee are allowed for

statistical purposes.

Order pronounced in the open court on this 01st day of June, 2018.

Sd/- Sd/- (VIKAS AWASTHY) (D. KARUNAKARA RAO) �याियक �याियक सद�य �याियक �याियक सद�य सद�य /JUDICIAL MEMBER लेखा सद�य लेखा लेखा सद�य लेखा सद�य सद�य / ACCOUNTANT MEMBER सद�य

पुणे Pune; �दनांक Dated : 01st June, 2018 सतीश

आदेश क� आदेश क� �ितिलिप �ितिलिप अ�ेिषत अ�ेिषत/Copy of the Order forwarded to : आदेश आदेश क� क� �ितिलिप �ितिलिप अ�ेिषत अ�ेिषत

अपीलाथ� / The Appellant 1. ��यथ� / The Respondent 2. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, “A Bench” Pune; 3. गाड� फाईल / Guard file. 4.

आदेशानुसार आदेशानुसार/ BY ORDER,स आदेशानुसार आदेशानुसार

स�यािपत �ित //True Copy// Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune

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