SHRITEJA MANDIR TRUST,KOTA vs. CIT EXEMPTION, JAIPUR

Yourhonour's the delay was because of long illness of Shri Babulal Chaudhary. Chairman of appellant trust. He was suffering Coronary Artery disease and was advised complete bed rest from September 2022 to December 2023, copy of medical certificate & affidavit are attached herewith for kind perusal and verification. Prayer It is therefore most respectfully pray that the delay of 416 days in filing the appeal may kindly be condoned in the interest of justice and the appeal may kindly be admitted.”

In support of these contention an affidavit duly sworn was also filed by chairmen of the trust. .

2.1 The ld. AR of the assessee in support of the condonation petition

humbly submitted that there were 3 occasions on which notices were issued and on the 3rd occasions. The assessee could not submit the

required details as the trustee who was handling the affairs was under

medical treatment and was advised bed rest. In support of the contention, he relied upon the affidavit filed. After 3rd notices, the assessee could not

3 ITA No. 37/JP/2024 Shriteja Mandir Trust vs. CIT(E) submit the details and therefore, he in support of the delay relied upon the

fact that since managing trustee who is our about the fact of the case was

undertaking medical treatment and was advised bed rest. On resuming the

duty, he immediately filed the appeal against the order of registration of the

assessee trust. Therefore, in the interest of justice, he prayed to

condonation the delay.

2.2 On the other hand, the ld. DR objected to the prayer of the assessee

and submitted that the activities of the trust were also running in the

absence of Chairman of the trust. Therefore, why the other office bearers

could not file the appeal. However, the ld. DR left the decision of

condonation of delay in filing the appeal in the light of the facts narrated in

the petition of the assessee trust and prayed that the bench may decide

the issue as deem fit in the interest of justice.

2.3 Heard the parties, perused the materials available on record.

The bench noted that the assessee has complied the earlier two notices and submitted the details on the 3rd occasions the Chairman

of the trust became ill and could not furnish the details in the desire

way / format or the extent required. Therefore, the order has been

passed. So far as the filling of the appeal in time also the reason is

4 ITA No. 37/JP/2024 Shriteja Mandir Trust vs. CIT(E) that the chairmen of the trust who is authorized person become sick

and was advised bed rest and therefore, the appeal could not be

filed. In support of these contention the ld. AR of the assessee filed

the affidavit and relevant medical records. Considering all these

aspects of the matter we find that there is a reasonable cause to the

assessee in filling this appeal belatedly of 416 days. Thus, based on

that evidence and records we condoned the delay and respectfully

following the decision of Hon’ble Supreme Court in the case of

Collector, land Acquisition vs. Mst. Katiji and Others, 167 ITR 471

(SC) as the assessee is prevented by sufficient cause.

“1. On the facts and circumstances of the case and in law also Ld. CIT (Exemption), Jaipur grossly erred in rejecting the application for registration u/s 12AB of the Income Tax Act, 1961. 2. On the facts and circumstances of the case and in law also Ld. CIT (Exemption), Jaipur grossly erred in holding that the activities letting out of properties on rent, which is the primary source of income, are not charitable in nature and therefore also erred in rejecting the application for registration.

5 ITA No. 37/JP/2024 Shriteja Mandir Trust vs. CIT(E) 4. Succinctly, the fact as culled out from the records is that the

assessee filed application online dated 27.03.2022 in Form No. 10AB for

seeking registration u/s 12AB of the Income Tax Act. 1961. The assessee

was issued a letter/notice No. ITBA/EXM/F/EXM43/2022-23/1044662712

(1) dated 16.08.2022 requesting therein to submit certain documents/

explanations by 05.09.2022. The assessee submitted its reply on 04-09-

2022 along with relevant documents / clarification. The reply was perused

and few discrepancies were found. Accordingly, the applicant was asked to

submit clarification / information / details on the said discrepancies vide

letter dated 13.09.2022 requesting to submit the relevant documents. In

response to the above notice the assessee furnished reply on 14.09.2022.

The reply furnished by the assessee was perused and few discrepancies

were found. Thereafter, another notice was sent to the assessee

requesting to furnish details / information / clarification by 21.09.2022 vide

letter dated 19.09.2022. On given date the assessee didn’t furnish any

reply nor anyone attended in response to the show cause. Even after giving

sufficient opportunity, the assessee failed to furnish complete details as

sought for in the letters sent to the assessee. Therefore, the ld. CIT(E)

noted that the assessee failed to furnish satisfactory response of the letters

seeking details of the students staying in the Hostels run by the assessee

6 ITA No. 37/JP/2024 Shriteja Mandir Trust vs. CIT(E) due to which corroboration between activities of the assessee and

expenditure so made could not be established. Thus, the genuineness of

the activities of the assessee could not be determined. Thus, it is clear that

the activities of the assessee are not charitable in nature as it is

predominantly carrying out activities of letting out property on rent which is

the primary source of income for the assessee. Hence, the assessee

cannot be held as charitable within the meaning of Sec. 2(15) of the

Income-tax Act, 1961. Based on these observation the assessee trust is

not considered fit for registration and, therefore, registration u/s 12AB was

rejected the relevant finding of the ld. CIT(E), is reiterated here in below:

“On examination of Income and Expenditure accounts& Form No. 26AS & details furnished by the applicant, it is quite clear that 1. The applicant has let out many properties on rent for which rental income has been received. 2. Against such activity, TDS has also been deducted on such impugned receipts under section 1941(b) of the Act. 3. As such, the applicant is receiving rental receipts. Hence, impugned receipts/ considerations shown in the I&E Account for FY 2019-20 are nothing, but Income received from letting out of property which is of the nature of Business/commercial Receipts. 4. The same scenario is visible in the final accounts and 26AS statements for the F.Y. 2020-21 and F.Y. 2018-19 as well. 04. It is pertinent to state that the income from such commercial activities is forming more than 20% of the total receipts for F.Y. 2019-20i.e. in contravention to the provisions laid down in 1st proviso to Sec. 2(15). Hence, the applicant fails condition (b) of the proviso. Further, such commercial activities are not the incidental but are pre-dominant activity of the applicant. Hence, the applicant also fails condition (a) of the proviso. Therefore, as per the proviso, such activity in the nature of advancement of an object of General Public Utility shall not qualify as charitable activity.

7 ITA No. 37/JP/2024 Shriteja Mandir Trust vs. CIT(E) 05. It is further noticed that the SFT details of the applicant depict that there has been cash deposit of Rs. 31,30,000/- over the F.Y. 2019-20. In account of the above, the applicant was asked to furnish explanation regarding the same. The reply of the applicant has not been found satisfactory. Hence, in the absence of such consistency, it seems that the trust/institution is in receipt of anonymous donation. Moreover, the applicant failed to furnish satisfactory response of the letters of this office seeking details of the students staying in the Hostels run by the applicant due to which corroboration between activities of the applicant and expenditure so made could not be established. Thus, the genuineness of the activities of the applicant could not be determined. 06. Based on above discussion, it is clear that the activities of the applicant are not charitable in nature as it is predominantly carrying out activities of letting out property on rent which is the primary source of income for the applicant. Hence, the applicant cannot be held as charitable within the meaning of Sec. 2(15) of the Income-tax Act, 1961. Based on above, I am satisfied that the applicant trust is not fit for registration and, therefore, registration u/s 12AB is rejected and filed.”

preferred the present appeal. In support of the grounds so raised, the ld. AR

of the assessee submitted that the assessee has submitted all the details in response to the notice earlier but on the 3rd notices, the assessee could not

submit the required details on account of ill health of the Chairman and

trust. At the same the ld. AR of the assessee submitted that if given a

chance / opportunity to represent the case before the ld. CIT(E) the

assessee has submit all the details that is required by the ld. CIT(E) and the

assessee was deprive of the justice based on the facts presented in the

affidavit filed by the chairmen of the assessee trust.

8 ITA No. 37/JP/2024 Shriteja Mandir Trust vs. CIT(E) 6. Per contra, the ld. DR representing, the revenue submitted that there

were three notices issued to the trust establishing that the trustees engaged

in the nature of business activity and that aspect has not been established

and therefore, the registration has rightly been denied. However, the ld. DR

has not objected to the prayer of the assessee to give one more chance to

represent the fact on account of due to ill health of Chairman of the Trust.

on record. The bench noted that in this case there were three notices were

issued the assessee has complied and filed the details in response to the

two notice but when the third notice issued the chairmen of the trust

become sick and was advised bed rest. In support of this the affidavit and

medical report was filed. Thus, the bench feels that the assessee has

justified as to the reason as to why the complete details were not provided

by the assessee. Considering that aspect of the matter and in the interest of

the principles of nature justice we deem it fit to restore the matter to the file

of ld. CIT(E) to decide on the merit of the case afresh after giving the

opportunity of being heard to the assessee. Based on these observations

we set aside the challenged order to the file of ld. CIT(E) to decide the issue

of registration of the assessee trust on merits. The assessee is also

directed to co-operate with the ld. CIT(E) in deciding the issue of

9 ITA No. 37/JP/2024 Shriteja Mandir Trust vs. CIT(E) registration and the assessee is directed to comply with the notices asking

for the details and should not seek time without sufficient reason. Before

parting, we may make it clear that our decision to restore the matter back to

the file of the ld. CIT(E) shall in no way be construed as having any

reflection or expression on merits of the dispute, which shall be adjudicated

by the learned Commissioner of Income Tax, (Exemption) independently in

accordance with the law.

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

purposes.

Order pronounced in the open court on 01/05/2024. Sd/- Sd/- ¼ Mk0 ,l- lhrky{eh ½ ¼ jkBksM deys'k t;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member

Tk;iqj@Jaipur fnukad@Dated:- 01/05/2024 *Ganesh Kumar, PS आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. The Appellant- Shriteja Mandir Trust, Kota 2. izR;FkhZ@ The Respondent- CIT Exemption, Jaipur 3. vk;dj vk;qDr@ The ld CIT vk;dj vk;qDr¼vihy½@The ld CIT(A) 4. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. 6. xkMZ QkbZy@ Guard File (ITA No. 37/JP/2024) vkns'kkuqlkj@ By order,

सहायक पंजीकार@Aेेज. त्महपेजतंत

10 ITA No. 37/JP/2024 Shriteja Mandir Trust vs. CIT(E)