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Income Tax Appellate Tribunal, JAIPUR BENCHES,”B” JAIPUR
Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA. No. 320/JP/2020
vkns'k@ ORDER PER: DR. S. SEETHALAKSHMI, J.M. This is an appeal filed by the assessee directed against the order of the Ld. CIT(E), Jaipur dated 22.09.2020 for the Assessment year 2020-21.
The hearing of the appeal was concluded through video conference in view of the prevailing situation of Covid-19 Pandemic.
The assessee raised the following additional ground of appeal:-
“1. That the Ld. C.I.T Exemption, Jaipur has grossly erred in rejection of the application seeking registration u/s 12AA. The reasons thereto are unjustified Registration needs to granted to foundation.
2 /JP/2020 Miracle Life Foundation First Application • Foundation was created on 8th May, 2019. • Application in Form 10A was submitted on 09/07/2019. • Reply to all points in letter dt. 09/10/2019 was speed posted on 02/11/2019. (efiled on 18/11/2019) • Disregarding all submissions, application was rejected on 24/01/2020 for no reasons. Current Application • As advised by Departmental Official (Sh Arvind Gautaum), application (Form 10A submitted on 22/02/2020. • Reply to all points regarding letter dt. 19/07/2020 was submitted e-mailed on 20/07/2020. (copy enclosed along with enclosures) • Reply not considered and application rejected on incorrect facts.”
On perusal of the order passed by the ld. CIT(E), it is observed that the ld CIT(E) has stated in his order that sufficient opportunities has been provided to the assessee to produce relevant information/documentation in support of its claim seeking registration U/s 12AA of the Act. However the assessee has failed to avail of such opportunity, accordingly, the application seeking registration was rejected by ld. CIT(E).
Aggrieved by the CIT(E) order, the assessee is in appeal before us . The Ld AR for assessee submitted a detailed Written submissions which was received by the office Registry on 19.03.2021 along with Form 10AC which are as under :
“It is respectfully submitted that the registration u/s 12AA rejected twice by Ld. C.I.T.(Exemption) is unjustified and registration be allowed to appellant.
A.1. First Application:
3 /JP/2020 Miracle Life Foundation • Foundation was created on 8th May, 2019. • Application in Form 10A was submitted on 9/07/2019. • Reply to all points in letter dt.09/10/2019 was speed posted on 02/11/2019. (e- filled on 18/11/2019) • Disregarding all submissions, application was rejected on 24/01/2020 for no reasons.
A.2. Copies of undernoted are enclosed: - Copy of Deed dt.08/05/2019 of Miracle Life Foundation. - Copy of Form 10A submitted on 09/07/2019. - Copy of Query letter dt. 09/10/2019 of Miracle Life Foundation. - Copy of e-filed reply dt. 18/11/2019 speed posted on 28/11/2019 - Rejection order dt. 24/01/2020.
A.3. Despite due explanations & submissions, our valid request for Registration u/s 12AA was rejected on incorrect facts reproduced below:
In letter dt. 13/01/2020-" No compliance was made by applicant."
(Appellant had submitted/complied all details in a reply dt.02/11/2019, as precaution also speed posted on 18/11/2019)
A.4. For remedial action, CA & AR of appellant met Departmental incharge Shri Arvind Gautam who concurred the inadvertent content (of non compliance by appellant) and suggested re-submission of Form-10A.
Current Application B.1. During the same F.Y. 2019-20 (in which the foundation was created, on the advice of department fresh application was submitted in Form 10A (e- submitted on 22/02/2020))[ Copy enclosed]. Kindly note there was no change in activity/status. B.2. As advised by official reply submitted earlier regarding First Application was re-filed on 20/07/2020 (Copy enclosed – along with enclosures).
B.3. Ld A.O. has overlooked the circumstances of COVID prevailing during the period and rejected the application on flimsy grounds in a stereotyped manner.
Summary of happenings in F.Y. 2019-20
C.1. Foundation was created on 08/05/2019
C.2. PAN applied & bank A/C opened on 22/6/2019 C.3. Receipts position upto October, 2019
Receipts Amount Payment Amount To Donation 33,000.00 By Donation Made 5,000.00 received By Bank Charges 251.39 By Balance C/d 27,748.61
Total 33,000.00 Total 33,000.00 C.5. Copy of Final A/Cs enclosed summarized as under:-
C.6 Copy of acknowledgement of ITR (R. No. 274548140250221) enclosed.
Future Plans & Recent Happenings
D.1. Due to Non-Registration, charitable activities were effected in F.Y.19-20 and post covid period.
D.2. Due to death of PATRON (GOVIND PRASHAD AGARWAL) due to COVID and other complications on 13.11.2020, the Activities are hampered in current year (Copy of death certificate enclosed)
D.3. The Foundation is likely to receive a sum of Rs.8,15,000/- from Mohini Devi Charitable Trust, as Donation for Charitable Activities which is delayed due to non-registration under Section 12AA.
Further, promised donations approxly Rs. 50,000/- from 4 parties are also pending due to Non Registration.
D.4. To promote charitable activities in a big way, registration is an urgency.
D.5. It shall be pertinent to consider that he Ld. C.I.T exemption, Jaipur has rejected the application in a casual manner. The causes stated in para 4 of the order are not worth cognizance as:
- Ld. C.I.T exemption, Jaipur has stated that applicant is required to Produce original document regarding establishing of foundation. This is an inappropriate manner of exercising discretion as the appellant Had in reply to Que 5(a) and Que 5(b) clearly stated as under:-
QUESTION:- "Please attach a certified copy of the Trust Deed/ memorandum of Association and produce original copy for verification."
REPLY:- 5(a) "Certified copy of Trust deed is enclosed."
5(b) "Your goodself desired that 'produce original copy for Verification'.
In this connection it is submitted that as the trust is located at Ajmer, it is requested that the verification work be entrusted to ITO (Exemption) Ajmer or other officials so that the time, Money, efforts may be saved and utilized for the charitable Purpose."
It shall be noteworthy that calling the appellant from another city to Jaipur in covid days for flimsy reasons is unreasonable on the part of the authorities, Further, the authority could have availed the services of its subordinate authority situated in the appellant city `Income Tax Officer (Exemption), Ajmer' and ought to exercise his judicial powers not detrimental to interest of charitable activities.
- Ld. C.I.T., exemption Jaipur has wrongly noted that "the applicant also not furnished any evidence/document of society/trust carrying out its activities from the premises mentioned by it in form 10A. Further, no details in respect of Bank A/c statement for the last three years (as applicable) have been furnished as well as the I/E A/c & Balance Sheet of last three years (as applicable).”
The facts on record are:- � Copy of Rent Agreement was submitted (Copy re-enclosed). � Copy of Bank Statement upto 3rd Oct, 2019 was submitted (re-enclosed upto 31.03.2020).
9 /JP/2020 Miracle Life Foundation � Details of donation made by cheque was submitted (Copy re- enclosed). � Details of donations received were submitted ((Copy re-enclosed). Copy of letter dt. 01.11.2019 enclosed.
- In such circumstances, the assumption that 'Charitable nature and genuineness of the activities of appellant could not be established' is an unacceptable preposition. - The discretionary powers have been wrongly exercised twice by Ld. C.I.T exemption, Jaipur, a mischievous act of some employee/ official for ulterior notices which needs to be remedied by the esteemed authority. PRAYER: The denial of Registration twice under Section 12AA regarding a genuine foundation is apparently for some ulterior motives which need to be deplored.
The order passed by Ld. C.I.T (Exemption) needs to be remedied and appropriate orders be passed.”
We have heard both the parties, perused materials available on record and gone through orders of the authorities below. From perusal of record ,we observed that Ld.CIT(E) has rejected the application of the assessee twice for seeking registration u/s 12AAof the Act on the ground that the assesse has failed to provide required documents which are necessary for granting registration. We observed that an application in Form No. 10A seeking registration u/s 12AA of the Act was filed by the assessee on 09.07.2019. On perusal of the documents we have considered opinion that it is a fit case for granting registration u/s 12AA. The Ld AR for the assesee submitted a complied documents in a reply dated 02.11.2019 and also through speed post on 18.11.2019. On perusal of the documents that the objects of the Trust deed are genuine in nature, the Receipts and payments, Income and Expenditure, Financial Statements, Bills of Expenses, Donation Receipts and Bank Statement which contained of 56 pages in Paper Book are sufficient evidences for granting exemption u/s 12AA. We don’t have any hesitation to grant exemption u/s 12AA. But since the documents are not been submitted and verified by the CIT (E), where the documents are submitted before us for the first time and we doesn’t want to interfere in the jurisdiction of the concerned lower Authority. Having considered the facts and circumstances of the case, we belief that the assessee deserves one more opportunity to submit necessary details and documents in support of its claim for seeking registration U/s 12AA of the Act. Therefore, in the interest of justice and fair play, the matter is hereby set aside to the file of the ld. CIT(E) to decide the same afresh after providing reasonable opportunity to the assessee.
We are of the considered view, the lethargic and casual approach of the assessee in submitting the documents & explanation to the Department is not at all entertained & appreciated. Inspite of many requests and reminders, the assessee has not furnished any evidence relating to the registration. So we have decided to impose cost of Rs. 1000/- towards PM Relief Fund for the delay and taking time of the Department and this Bench as well.
The assessee is also hereby directed to attend to the proceedings before the ld. CIT(E) and ensure in timely completion thereof as so directed by the ld. CIT(E). In the result, the appeal of the assessee is allowed for statistical purposes.