AADARSH EDUCATION TRUST,AHMEDABAD vs. THE PR. CIT (OSD) (EXEMPTION), AHMEDABAD

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ITA 2058/AHD/2015Status: DisposedITAT Ahmedabad23 October 20173 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the CIT's order was passed ex-parte without a proper speaking order discussing the furnished details. The matter was restored to the CIT for a fresh decision after providing another opportunity to the assessee.

What were the facts?

The assessee's application for registration under Section 80G(5) was rejected by the CIT. The CIT passed an ex-parte order, stating that the assessee failed to furnish requested details and documents even after being given multiple opportunities.

What were the issues?

Whether the CIT erred in rejecting the application for 80G registration without providing adequate opportunity of hearing and without passing a speaking order.

Which sections of the Income-tax Act were involved?

Section 80G(5)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD “B” BENCH, AHMEDABAD

ITA No. 2058/Ahd/2015 Aadarsh Education Trust vs. The Pr. CIT Assessment year: Block Period Page 1 of 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “B” BENCH, AHMEDABAD [Coram: Pramod Kumar AM and S S Godara JM]

ITA No. 2058/Ahd/2015 Aadarsh Education Trust, .......…………......Appellant Haridarshan Cross Road, Naroda Road, Nikol Gam, Ahmedabad – 382 350 [PAN : AADTA 2867 N] Vs. Principal Commissioner of Income-tax .......................Respondent (OSD) (Exemption), Ahmedabad Appearances by: None for the appellant Dr Banwarilal for the respondent Date of concluding the hearing : 23.10.2017 Date of pronouncing the order : 23.10.2017

O R D E R Per Pramod Kumar, AM: 1. By way of this appeal, the assessee appellant has challenged correctness of learned CIT’s order dated 18.05.2015 rejecting assessee’s application for registration under Section 80G(5) of the Income-tax Act, 1961, on the following grounds:- “1. That the learned Principal Commissioner of Income-tax (OSD) (Exemption), Ahmedabad has erred in law and on the fact in rejecting our application for registration of Trust u/s 80G(5) of the I.T. Act, 1961. 2. That the learned Commissioner has not appreciated the facts and circumstances of the case of the applicant and passed an ex-parte order without giving proper opportunity is bad in law and required to be reconsidered. 3. That the applicant has provided all the documents requires for registration of trust u/s 80G(5) of the I.T. Act, 1961 at the same time of application itself, but without considering the same, learned principal commissioner of income- tax (OSD) (Exemption) has rejected our application which is bad in law, illegal and required to reconsider. 4. Your applicant craves leave to add, alter, amend or delete any of the grounds till the appeal is finally heard and decided.”

ITA No. 2058/Ahd/2015 Aadarsh Education Trust vs. The Pr. CIT Assessment year: Block Period Page 2 of 3

2.

On a perusal of the impugned order, it is clear that the CIT has passed the impugned order ex-parte by summarily dismissing the application on the ground that certain details requisitioned by the Commissioner were not furnished. This is evident from the following extracts from the impugned order:-

“2. A letter dated 17.12.2014 was issued to the applicant to furnish detailed note on the activities actually carried out by the Trust as well as the following documents / details:

1.

Copy of Bank Account since inception of Trust or last three years. 2. Copy of order u/s. 12AA or copy of notification u/s. 10(23C) or u/s. 35 of the l.T. Act. 3. Copy of audited accounts of last three years of Trust who completed one or more years. 4. Notes and evidence on genuineness of the activities of the trust since inception of the trust. 5. Whether the income of the trust is exempt u/s. 11 & 12 or 10(23C) or 35 of the Act. 6. Whether the trust is expressed for the benefit of any particular religion, community or others? 7. Whether any business is carried on by trust for which separate books of accounts are maintained? 8. Whether any object of the clause of deed is such that it is against social cause. 9. Whether the expenditure on religious purpose is with a 5% or not? Give figures and calculation. 10. Declaration u/s. 11(5) of the l.T. Act? : 11. Details of donations received or paid and confirmation/ PAN of the donors. 12. Further, it is seen that as per Trust deed the dissolution clause is not proper.

The above mentioned inquiry about the actual activities of the Trust is necessary in view of the requirement for approval of an institution or fund u/s 80G stipulated in Rule 11AA(3) -

(3)The Commissioner may call for such document or information from the institution or fund or cause such inquiries to be made as he may deem necessary in order to satisfy himself about the genuineness activities of such institution or fund.

3.

However, on given date, neither applicant attended the office nor furnished any details/ documents nor sought any adjournment.

4.

Therefore, with a view to give one more opportunity of being heard to the applicant another letter marked 'Final Opportunity’ was issued to the applicant on 13.04.2015 requiring the details/ documents as mentioned therein on or before 05.05.2015. It was stated without any ambiguity in the said letter that failure to comply with the said letter will entail rejection of its application under

ITA No. 2058/Ahd/2015 Aadarsh Education Trust vs. The Pr. CIT Assessment year: Block Period Page 3 of 3 reference. This letter also failed to evoke any response from the applicant. Therefore, in the absence of complete details/documents, it is not possible to satisfy about the genuineness of the activities of the above trust or the same being carried out in accordance with the objects of the trust.”

3.

There is no discussion, however, about the details actually furnished by the assessee and as to how such details were inadequate or unacceptable. In any case, the order was passed ex-parte and summarily dismissing the appeal, and the assessee’s case is that sufficient opportunity of hearing was not given.

4.

In view of the above discussions and bearing in mind entirety of the case, we are of the considered view that the matter should be restored to the file of the CIT for passing a speaking order, in accordance with the law, after giving yet another opportunity of hearing to the assessee. Ordered, accordingly.

5.

In the result, appeal is allowed for statistical purposes. Pronounced in the open court today on the 23rd October, 2017.

Sd/- Sd/-

S S Godara Pramod Kumar (Judicial Member) (Accountant Member) Ahmedabad, the 23rd day of October, 2017 **bt Copies to: (1) The appellant (2) The respondent (3) Commissioner (4) CIT(A) (5) Departmental Representative (6) Guard File By order TRUE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad

1.

Date of dictation: ...... order prepared as per manuscripts of Hon’ble AM, in the case of ITA No.2055/Ahd/2017... typed on.23.10.2017 2. Date on which the typed draft is placed before the Dictating Member: ... 23.10.2017........ 3. Date on which the approved draft comes to the Sr. P.S./P.S.: .. 23.10.2017..... . 4. Date on which the fair order is placed before the Dictating Member for Pronouncement:…. 23.10.2017.. 5. Date on which the file goes to the Bench Clerk : .. 24.10.2017.... 6. Date on which the file goes to the Head Clerk : ……………………………. 7. The date on which the file goes to the Assistant Registrar for signature on the order: ……

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