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Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
Before: SHRI MAHAVIR SINGH, JM & SHRI RAJESH KUMAR, AM
O R D E R
PER RAJESH KUMAR, AM
The present appeal has been filed before us against the order of Director of Income Tax (Exemption) dated 17.9.2013 (hereinafter referred to as DIT(E) passed under section 12AA(1)(b)(ii) r.w.s.12A of the Income Tax Act, 1961 denying the registration u/s 12A to the applicant.
Facts in brief are that the applicant applied for the registration u/s 12A of the Act on 18.3.2013. The said trust was registered with Charity Commissioner, Mumbai on 6.3.2013. A notice dated 13.6.2013 was issued to the appellant trust calling upon the Trust to furnish certain details/documents like PAN cards of trustees and settler, copy of bank accounts and other relevant documents including the certificate of registration issued by the Charity Commissioner, audited accounts, note on activities undertaken by it duly substantiated with documentary evidences. On perusal of the documents furnished by the Trust it was observed by the Director of Income Tax (Exemption) that the objects as per clause No.5, Sr.No.1 and 4 of the Trust Deed concerned only the members of the Trust and hence issued show cause notice as to why the application for registration should not be rejected on this ground. Again vide order sheet noting dated 25.8.2013, the trust was asked to furnish further details/documents on 10.9.2013 and also show caused as to why the application should not be rejected for want of these documents. The Director of Income Tax (Exemption) observed that the trust was to be granted registration if he was satisfied about the objects of the trust and the genuineness of its activities carried on or to be carried on by the applicant trust. The Director of Income Tax (Exemption) also observed that the objects of the applicant were meant for the benefit of the teachers and staff of a particular school only and the applicant trust has not offered any convincing or plausible explanation on this issue. Therefore, the Director of Income Tax (Exemption) was of the opinion that the applicant was akin to a mutual association existing for the common benefit of a particular school only. The DIT(E) observed that the applicant trust being a mutual association of providing for physical, mental and emotional well being to the teachers and staff of Rose Manor Garden School could not be treated as a public charitable organization and accordingly the application filed by the trust for registration u/s 12A of the Act was rejected on the ground that the assessee did not file requisite documents as called for by the DIT(E) and also the objects of the trust were not charitable. Aggrieved by the order of the Commissioner, the assessee preferred an appeal before us.
The ld. AR submitted before us that the assessee could not get proper opportunity to furnish documents to prove its case. The ld. AR also submitted that the DIT(E) has rejected the application for registration ex-parte on the ground that the assessee did not file requisite documents as called for and the objects of the trust were not for the general public. Therefore, the ld. AR submitted that if the assessee was given one more opportunity to prove its case no prejudice would be caused to the other party. Therefore, the ld.AR submitted that the order of DIT(E) be set aside and the appeal be restored to his file of the CIT for allowing the assessee to submit necessary documents and made submissions and deciding the issue of registration afresh.
We have carefully considered the rival contentions and perused material 4. placed before us. Having perused the order of DIT(E) we find from the DIT(E) came to the conclusion that the activity of the assessee trust were for the mutual benefit of the members who belonged to particular school/community and not for the charitable purposes for the public at large. We find that the findings of the DIT(E) are based on the objects of the applicant trust particularly clause No.5, Sr.No.1 and 4 of the Trust Deed which provide for the financial and medical assistance to retired faculty and staff members of Rose Manor Garden School and providing physical , mental and emotional support to teachers and staff of the said school. We further find that the applicant trust could not file the necessary documents before the DIT(E) to prove its case as called for by DIT(E). In our opinion the ends of justice would be met if the applicant trust is given one more opportunity to present its case and file the documents which could not be filed before the DIT(E). We, therefore, set aside the order of DIT(E) and restore the matter of registration to his file with a direction to decide the issue of registration afresh after giving a reasonable opportunity to the applicant trust in accordance with principle of natural justice.