SHRI BABA BALAKNATH SEVA SANSTHAN,JAIPUR vs. THE CIT EXEMPTION, JAIPUR
Facts
The assessee filed appeals against the orders of the CIT(E) rejecting their applications for registration under Section 12AB and approval under Section 80G. The CIT(E) rejected the applications citing business objects and non-compliance with the trust's objectives, and also due to delay and lack of proper justification for regularization of provisional approval. The assessee did not appear for the hearing, but the tribunal decided to proceed on merit.
Held
The tribunal noted that the assessee had filed multiple appeals concerning the same orders and the same assessment year. The tribunal observed that since the provisional registration and approval had already lapsed and been cancelled by the CIT(E), the appeals filed by the assessee were rendered infructuous.
Key Issues
Whether the CIT(E) erred in rejecting the assessee's application for registration under Section 12AB and approval under Section 80G. Whether the appeals are infructuous due to the lapse and cancellation of the provisional registration and approval.
Sections Cited
12AB, 80G
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Income Tax Appellate Tribunal, JAIPUR BENCHES,”B” JAIPUR
Before: DR. S. SEETHALAKSHMI, JM & DR. DIPAK P. RIPOTE, AM vk;dj vihy la-@ITA No. 553 & 554/JPR/2024 Shri Baba Balaknath Seva Sansthan cuke
आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”B” JAIPUR - ,l- lhrky{eh] U;kf;d lnL; ,oa MkWa- nhid ih-fjiksVs] ys[kk lnL; ds le{k BEFORE DR. S. SEETHALAKSHMI, JM & DR. DIPAK P. RIPOTE, AM vk;dj vihy la-@ITA No. 553 & 554/JPR/2024 Shri Baba Balaknath Seva Sansthan cuke The CIT Exemption Shivank 69/12 New Sanganer Road, Vs. Jaipur. Near Dhanwantri Hospital, Mansarovar, Jaipur. LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.: ABGAS 9583 G vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksjls@Assesseeby : None jktLo dh vksjls@Revenue by: Shri Ajay Malik (CIT) lquokbZ dh rkjh[k@Date of Hearing : 23/07/2024 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 24/07/2024 vkns'k@ORDER
PER: DR. S. SEETHALAKSHMI, J.M. These are two appeals filed by the assessee against orders of the Learned Commissioner of Income Tax (Exemption), Jaipur [herein after referred to as “CIT(E)”] both dated 29.03.2024 passed under section 12AB and 80G of the Income Tax Act, 1961 respectively.
2 ITA No. 553 & 554/JPR/2024 Shri Baba Balaknath Seva Sansthan 2.1 In ITA No. 553/JPR/2024 the assessee has raised following grounds: -
“1. On the facts and circumstances of the case, the Ld. CIT(Exemption) grossly erred in law and facts by rejecting the application of assessee for registration under Section 12AB without affording it a reasonable opportunity of being heard. Thus, the order so passed is against the principles of natural justice and thus hereby prayed for being quashed. 2. On the facts and circumstances of the case, the Ld. CIT(Exemption) grossly erred in law and facts by rejecting the application of assessee for registration under Section 12AB on the ground of having business objects whereas same was not the case at all. It is hereby thus prayed for quashing the order so made. 3. On the facts and circumstances of the case, the Ld. CIT(Exemption) grossly erred in law and facts by rejecting the application of assessee for registration under Section 12AB on a ground which has been contradicted by himself at various places in the order. At few places, it has been alleged that assessee has applied income of trust on purchase other than objects of trust and at other places it has been mentioned contradictorily that no expenses has been claimed by the trust on said purposes. Further, no question has in fact been raised upon genuineness of the activities. of trust and question has been only been raised on the basis of photographs of activities in the name of Laddu Gopal ji and Har ghar tulsi. The Ld. CIT(Appeals) failed to acknowledge the science and local beliefs behind the two set of activities. Whereas on one hand Laddu Gopal ji presence motivates the associated masses for promoting offering of food before consumption, on the other hand. Tulsi Plant is a medicine in ayurvedic and even allopathic terms. Both are thus in directly or indirectly related to objects of trust. However, without prejudice to same, we also urge that since the trust was only one of the various participants in the activities and no expenses in relation to same have been made from trust and expenses have only been made by one trustee in her personal capacity, same may not be treated as a basis for cancellation of application of trust. 4. On the facts and circumstances of the case the Ld. CIT(Exemption) grossly erred in law and facts by cancelling the provisional registration. This it is hereby prayed to quashed the said order. 5. The assessee hereby craves the leave to add, delete, amend or abandon any grounds of this appeal at the time of or before the hearing of the case.” 2.2 In ITA No. 554/JPR/2024 the assessee has raised following grounds: - “1. On the facts and circumstances of the case. the Id. CIT(Exemption) has grossly erred in law and facts by rejecting the application of assessee seeking exemption under Section
3 ITA No. 553 & 554/JPR/2024 Shri Baba Balaknath Seva Sansthan 80G on the ground of rejection of assesse's application for registration under Section 12AB when such rejection was itself not as per provisions of law. It is hereby thus prayed for quashing the said rejection order and direct for accepting the application so made by the assessee. 2. On the facts and circumstances of the case. The L.d. CIT(Exemption) grossly erred in rejecting the application made by the assessee for seeking exemption under Section 80G without affording reasonable opportunity of being heard to the assessee. It is thus hereby prayed for quashing the said rejection order so made as it was against the principles of natural justice. 3. On the facts and circumstances of the case, The Ld. CIT(Exemption) grossly erred in rejecting the application made by the assessee for seeking exemption under Section 800 on account of delay in filing the said application ignoring the correct interpretation of law and Ignoring the legal precedents in the matter. It is thus hereby prayed for quashing the said rejection order so made. 4. On the facts and circumstances of the case the Ld. CIT(Exemption) grossly erred in law and facts by cancelling the provisional registration. Thus it is hereby prayed to quash the said order. 5. The assessee hereby craves the leave to add, delete, amend or abandon any grounds of this appeal at the time of or before the hearing of the case.”
Apropos to the grounds so raised by the assessee in ITA No. 553/JPR/2024, the ld. CIT(E) rejected the assessee’s claim of registration 12AB of the Act by observing as under:- “In the context of a trust/society, the "objects" refer to the specific purposes or beneficiaries for which the trust was established. Trustees have a legal obligation to manage and distribute trust assets in accordance with the terms of the trust. If an activity is made that goes beyond or deviates from these specified objects, it is considered a breach of trust. The trust instrument, which is the legal document establishing the trust, outlines the specific objects and purposes for which the trust was created. Any actions taken by the trustees should align with the provisions of this document. Trustees have a fiduciary duty to act in the best interests of the trust and its beneficiaries. If any activity
4 ITA No. 553 & 554/JPR/2024 Shri Baba Balaknath Seva Sansthan is made that is not in line with the trust's objects, it may be considered a breach of this duty. This comes under the specified violation as per the Explanation (a) of the Section 12AB(4) of the I.T. Act, 1961 which reads as under: "Explanation- For the purposes of this sub-section, the following shall mean "specified violation"- 1. Where any income derived from property held under trust, wholly or in part for charitable or religious purposes, has been applied, other than for the objects of the trust or institution; or" Therefore, on the basis of above discussion it is clear that the applicant is doing activities which are not in accordance with its objects. Therefore the activity of the trust is not in accordance with the objects and application of income not towards objects of trust and specified violation as per Explanation (a) of section 12AB (4) of the I.T. Act, 1961. Thus, the application for registration u/s 12AB is liable to be rejected. 3.5. Assessee has shown photographs of activities like Laddo Gopal, Ghar Ghar Tulsi. however no expenses for same are shown in I/E accounts, no bills/voucher were furnished. Thus either assessee's accounts are false or assessee has not done any such activity. In both ways same result that assessee is not working genuinly. 04. In view of above discussion assessee's claim of registration section 12AB is liable to be rejected and thus being rejected on following grounds: - Business Objects: Activities are not in accordance with the objects of trust 05. However, provisional registration dated 24.05.2022 is already lapsed with earlier rejection order dated 29.06.2023. Again it is clarified that in view of section 12AB (1)(b)(ii)(B) of the Income Tax Act, 1961 also state that if CIT is not satisfied has to pass order rejecting such application and also cancelling its earlier registration. Thus, it is clarified that applicant's provisional registration under clause (vi) of clause (ac) of sub-section (1) of section 12A of the Income Tax Act, 1961 dated 08.11.2021 is also being cancelled. Further assessee has failed to give proper justification for regularization of provisional registration, thus with this order provisional registration is also lapsed and cancelled.”
Apropos to the ground so raised by the assessee in ITA No. 554/JPR/2024, the ld. CIT(E) rejected the assesee’s claim of exemption u/s 80G of the Act by observing as under:-
5 ITA No. 553 & 554/JPR/2024 Shri Baba Balaknath Seva Sansthan “04. In view of above discussion assessee's claim of approval u/s80G is liable to be rejected and thus being rejected on following grounds:- Approval u/s 80G cannot be granted without registration u/s 12AB Commencement of activities. 05. Further 2nd proviso to 80G(5) also state that if CIT is not satisfied has to pass order rejecting such application and also cancelling its earlier approval. Thus, it is clarified that applicant provisional approval under clause (iv) of first proviso to sub- section (5) of section 80G of the Income Tax Act, 1961 dated 08.11.2021 is also being cancelled. Further assessee has failed to give proper justification for regularization of provisional approval, thus with this order provisional approval is also lapsed and cancelled.”
At the outset of hearing, none appeared on behalf of the assessee however, the Bench decided to proceed the matter on merit based on the materials available on record, concerning the issue in question. 6. Per contra, the ld. DR relied on the orders of the ld. CIT(E) and submitted that in spite of various opportunities the assessee has not submitted required details and therefore, the plea of the assessee is not maintainable. 7. We have heard the ld. DR and perused material available on record. The Bench noted that the assessee has filed two appeals u/s 12AB(I)(b)(ii) of the Act in ITA No. 551/JPR/2024 & ITA No. 553/JPR-2024 and the two appeals U/s 80G in ITA No. 552/JPR/2024 and ITA No. 554/JPR/2024 by the same assessee in case of Shri Bana Balaknath Seva Sansthan of same year against the same order of the Ld. CIT(E). Therefore, the Bench feels
6 ITA No. 553 & 554/JPR/2024 Shri Baba Balaknath Seva Sansthan that above set of appeals u/s 12AB(I)(b)(ii) & u/s 80G of the Act should be dismissed as infructuous. In the result, the appeals of the assessee in ITA No. 553/JPR/2024 and ITA No. 554/JPR/2024 are dismissed as infructuous. Order pronounced in the open court on 24/07/2024. SD/- Sd/- ¼ZMkWa- nhid ih-fjiksVs½ ¼MkWa-,l-lhrky{eh½ (Dr. Dipak P. Ripote ) (Dr. S. Seethalakshmi) ys[kk lnL; @Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 24/07/2024 *Santosh आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू The Appellant- Shri Baba Balaknath Seva Sansthan, Jaipur. 1. 2. izR;FkhZ@ The Respondent- CIT(E), Jaipur. 3. vk;dj vk;qDr@ The ld CIT 4. vk;dj vk;qDr ¼vihy½@The ld CIT(A) 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 6. xkMZQkbZy@ Guard File ITA No. 553& 554/JPR/2024) vkns'kkuqlkj@ By order,
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