M/S SHREE SOMDUTT SHARMA MEMORIAL TRUST,MUZAFFARNAGAR vs. CIT(E), LUCKNOW

This appeal filed by the assessee is directed against the order of the CIT(Exemptions), Lucknow, dated 21/12/2015.

We have heard the arguments of both the sides and have carefully perused the relevant material placed on record on the Act, 1961 [hereinafter referred to as 'the Act'.

The ld. AR drew our attention towards assessee’s paper book pages 20 and 21 and contended that the assessee replied to the notice dated 23.11.2015 of the CIT(E) supplied all required details alongwith relevant documents but the CIT(E) in the impugned order incorrectly observed that the applicant society could not produce the books, bank statements and vouchers in respect of expenses claimed by the assessee for verification of genuineness of the activities of the applicant trust. The ld. AR also pointed out that the application of the assessee has been dismissed on vague and general allegations which are not sufficient for rejection of application u/s 12A of the Act. The ld. AR also submitted that the CIT(E) was duty bound to examine the objects and application of funds by the assessee which has been ignored and from the objects of the assessee, as mentioned in the copy of trust deed dated 13.10.2014, available at pages 3 to 19 of the assessee’s paper book, clause (iii), it is clear that the main objects of the assessee is to serve the nation of India in the field of education without any discrimination on the basis of caste or creed, religion and gender etc which has been ignored by ld. AR pointed out that the trust was created on 13.10.2014 and application for registration was filed on 29.6.2015 and there was a span of only 8 months and during this short period, there was notable activity undertaken by the assessee except accepting donations and procuring land for the purpose of construction of educational institution as per the objects of the assessee-trust.

Per contra, the ld. DR supported the order of the ld. CIT(E) and strongly opposed the grant of registration u/s 12A of the assessee to the assessee and submitted that no books of accounts and relevant documents and evidence were submitted before the CIT(E) despite of several requests. The ld. AR also pointed out that the assessee has shown work-in-progress but no vouchers or details regarding basis of work in progress as shown by the assessee could be furnished before the CIT(E). The ld. DR also drew our attention towards para 8 at page 2 of the impugned order and pointed out that the law requires conjunctive test whereby objects have to be charitable and genuineness of charitable activities should be established for registration of application u/s 12A. Mere recitals of objects or activities without cogent or corroborative evidences are not sufficient by themselves to enable a registering authority to arrive at the satisfaction mandated by law. The ld. DR also contended that no specific reply has been filed and the documents on record do not suffice to establish the genuineness of the activities of the charitable activities or rather the lack thereof arrived at on the basis of evidence filed and arguments addressed stand uncontroverted. Finally, the ld. DR did not raise any serious objection the ld. AR’s alternative plea that if required the assessee is ready to submit all the relevant documents, books of accounts etc, for examination for grant of registration u/s 12A of the Act.

On careful consideration of the above rival submissions, we observe that as per clause (iii) of the trust deed, prima facie, objects of the assessee seems to be carrying out activities in the field of education. At the same time, we may point out that from the observations recorded by the CIT(E), in para 3 to 8 of the impugned order, we are satisfied that the assessee-applicant trust could not produce books of account, bank statement and vouchers in respect of expenses claimed by the applicant for verification of genuineness of the activities of the trust. We also find that the duty of the applicant to satisfy the registration granting authority regarding charitable objects and its activities for the benefit of common man without any discrimination but the assessee could not get opportunity to explain the same regarding notice dated 23.11.2015 which was filed on 18.12.2015, the CIT(E) proceeded to adjudicate the application of the assessee and dismissed the same after only two days by passing order o, 21.12.2015 without any further opportunity to the assessee to explain and establish its claim for grant of registration. Therefore, in the interest of justice, we deem it fit to restore the grounds of appeal raised by the assessee to the file of the CIT(E) for fresh adjudication. Needless to mention that the CIT(E) shall provide due and proper opportunity of being heard to the assessee without being prejudiced with the earlier impugned order. Grounds of appeal raised by the assessee are allowed for statistical purposes.

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