VIVAN SEVA SANSTHAN-EK KADAM MANAVTA KI AUR ,JAIPUR vs. THE CIT EXEMPTION, JAIPUR, JAIPUR

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”A” JAIPUR Mk0 ,l- lhrky{eh]U;kf;d lnL; ,oa Jh jkBkSM+ deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA No. 552 & 553/JPR/2023 cuke The CIT (Exemption) Vivan Seva Sansthan-Ek Kadam Manavta Ki Aur Vs. Jaipur. Akshat Retreat, Room No. 405, Opposite to Gate No. 1 of SMS Hospital, Jaipur. LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.:AADTV 6960 H vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksjls@Assesseeby :Shri Vishal Gupta (C.A.) jktLo dh vksjls@Revenue by: Shri Anil Kumar Bhardwaj (CIT) lquokbZ dh rkjh[k@Date of Hearing :10/10/2023 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 18/12/2023 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 “Ld.CIT(E)] both dated 27.06.2023 passed under section 12AB and 80G of the Income Tax Act, 1961 respectively.

2 ITA No. 552 & 553/JPR/2023 Vivan Seva Sansthan-Ek Kadam Manavata Ki Aur 2.1 In ITA No. 552/JPR/2023 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 on the ground of mere non registration of trust under Rajasthan Public Trust act without making any observation on materiality of such non compliance on achievement of the objects of the trust. Further, such rejection was made on the basis of erroneous interpretation of Honorable Supreme Court Judgement in the case of New Noble Education Society. Also, the fact that the application has already been made by the assessee for registration under the said act was completely ignored. It is thus hereby prayed for quashing the rejection order so passed and order for grant of registration.

3 ITA No. 552 & 553/JPR/2023 Vivan Seva Sansthan-Ek Kadam Manavata Ki Aur 2.2 In ITA No. 553/JPR/2023 the assessee has raised following grounds: - “1. On the facts and circumstances of the case the Ld. CIT(Exemption) has grossly erred in law and facts by rejecting the application of assessee seeking exemption under Section 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 Ld. 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 application of assessee has been rejected on account of delay in filing the application which have been already condoned by the board. It is thus hereby prayed that the rejection is unwarranted owing to same. The assessee hereby thus prays for consequential relief. 4. 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.”

4 ITA No. 552 & 553/JPR/2023 Vivan Seva Sansthan-Ek Kadam Manavata Ki Aur which were duly replied with by the assessee. However, being not satisfied with the replies of assessee, the Ld. CIT(E) rejected the application of the assessee vide order dated 27.06.2023 alleging that the assessee has only given part reply. The ld. CIT(E) noted that in the absence of this information the genuineness of the activity carried out was not verifiable. The ld. CIT(E) also noted that there is no dissolution or irrevocability clause in the memorandum of the assessee. The assessee is also not registered under the Rajasthan Public Trust Act. Since the registration of 12AB was rejected even the application for registration u/s. 80G of the act was also rejected observing as under:-  Approval u/s 80G cannot be granted without registration u/s 12AB.  Non registration with RPT Act, 1959.  Commencement of activities.  Business objects.  Genuineness of activities & non-compliance.

5 ITA No. 552 & 553/JPR/2023 Vivan Seva Sansthan-Ek Kadam Manavata Ki Aur “We have submitted a paper book separately. The paper book so submitted is prayed for being considered as part of this submission. With this prayer, we start our reply which is as under: Brief Facts of the case are as under: The assessee is registered charitable trust carrying on various charitable activities like hosting of camps and treatment of patients free of cost. Besides this, the assessee has taken two rented premises and running them as shelter home for the patients who come from outside Jaipur for medical treatment. Free stay, food and medical facilities are provided in these shelter homes. The copy of trust deed of the assessee is enclosed vide Page No. 1-24 of paper book submitted by the assessee. The assessee filed an application in Form No. 10AB on 13.12.2022 seeking registration under Section 12AB of the act. Certain documents/information were sought from the assessee various vide query letters which were duly replied with by the assessee. The reply dated 26.05.2023 of the assessee is enclosed as a part of paper book vide page No. 25-55. However, being not satisfied with the replies of assessee, the Ld. CIT exemption rejected the application of the assessee vide order dated 27.06.2023 alleging that the assessee has only given part reply. Aggrieved by the said order, the assessee is in appeal before the H'ble ITAT, Jaipur bench. Now we hereby submit ground wise reply as under: Ground No. 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 on the ground of mere non registration of trust under Rajasthan Public Trust act, 1959 without making any observation on materiality of such non compliance on achievement of the objects of the trust. Further, such rejection was made on the basis of erroneous interpretation of Honorable Supreme Court Judgement in the case of New Noble Education Society. Also, the fact that the 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. Same is covered in our submissions to Appeal No. ITA 552/JPR/2023 which is also heard alonwgith the appeal under question. Hence, we pray the H'ble bench to decide this ground accordingly. Ground No. 2 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 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.

6 ITA No. 552 & 553/JPR/2023 Vivan Seva Sansthan-Ek Kadam Manavata Ki Aur It is hereby prayed before the H'ble bench that the assessee was not provided sufficient time to reply on the voluminous queries raised by the Ld. Commissioner (Exemptions). This was a gross violation of principles of natural justice. It is however pertinent to note that the assessee duly replied to almost all queries raised inspite of such deficiency of time (Kindly refer to our submissions to Ground No. 7). Thus, without prejudice to other submissions made herein, the assessee hereby pray that if the H'ble bench deems fit, the matter may be set aside to Ld. CIT Exemption, Jaipur for submission of any other documents/information in the matter of assessee. Ground No. 3 On the facts and circumstances of the case, the application of assessee has been rejected on account of delay in filing the application which have been already condoned by the board. It is thus hereby prayed that the rejection is unwarranted owing to same. The assessee hereby thus prays for consequential relief. This ground off appeal is not pressed by the appellant and we hereby pray that if the H'ble bench decided to set aside the case to Ld. CIT Exemption, this issue may also be transferred there only. Ground No. 4 The assessee hereby craves the leave to add, delete, amend or abandon any or all grounds of appeals at the time of or before the hearing of the case. This ground of appeal does not require any submission. Ground No. 5 On the facts and circumstances of the case, the Ld. CIT (Exemption) grossly erred in law and facts by rejecting the application of assessee seeking approval under proviso to Section 80G(5) on the ground of non registration of trust under Rajasthan Public Trust act, 1959 which is also not requirement of law so far as this Section 80G(5) is concerned. It is thus hereby prayed for quashing the rejection order so passed and order for grant of registration. We draw attention of the H'ble members towards relevant portion (highlighted bold) of Section 80G(5) where it has been mentioned as under: Provided further that the Principal Commissioner or Commissioner, on receipt of an application made under the first provisa shall- (1) where the application is made under classe (1) of the said proviso, pass an order in writing granting it approval for a period of five years: (ii) where the application is made under classe (j) or clause (iii) of the said proviso-

7 ITA No. 552 & 553/JPR/2023 Vivan Seva Sansthan-Ek Kadam Manavata Ki Aur (a) call for such documents or information from it or make such inquiries as he thinks necessary in order to satisfy himself about- (A) the genuineness of activities of such institution or fund; and (B) the fulfilment of all the conditions laid down in clauses (1) to (v); (b) after satisfying himself about the genuineness of activities under item (A), and the fulfilment of all the conditions under item (B), of sub-clause (a)- (A) pass an order in writing granting it approval for a period of five years, or (B) if he is not so satisfied, pass an order in writing rejecting such application and also cancelling its approval after affording it a reasonable opportunity of being heard: (ii) where the application is made under clause (iv) of the said proviso, pass an order in writing granting it approval provisionally for a period of three years from the assessment year from which the registration is sought, and send a copy of such order to the institution or fund: Thus, it can be clearly seen that there is no as such requirement of compliance with other laws in Section 80G(5) as was there in Section 12AB. Hence, it is hereby prayed to quash the rejection order so passed. Ground No. 6 On the facts and circumstances of the case, the Ld. CIT (Exemption) grossly erred in law and facts by rejecting the application of assessee seeking approval under Section 80G(5) on the ground of it being engaged in business objects which is an allegation completely based on erroneous interpretation of object clause of the trust. It is hereby thus prayed for quashing the order so made. In support of this ground, we hereby reproduce the relevant object as under: Object No. e-"To construct and running of schools, college, education institution, free dispensaries, centers for poor feeding and homes for the benefit of public". We have enclosed as a part of paper book a copy of trust deed vide Page No 1-24 in which it can clearly be seen that the sole purpose of trust is charitable in nature. Also, the object mentioned above itself suggests of it being charitable in nature. It is hereby respectfully also submitted that the appellant fail to understand that how presence of a mere clause in trust deed can lead the Ld. Commissioner (Exemption) to conclude that activities are being done commercially (para 5.1 of order). The rejection of assessee's application is possible on ground of question upon genuineness of activities of trust but not on presence of any clause in trust deed (even if interpretation of said clause of department is treated correct). It is thus hereby prayed that the rejection of application

8 ITA No. 552 & 553/JPR/2023 Vivan Seva Sansthan-Ek Kadam Manavata Ki Aur of assessee on this ground is beyond the scope of act and hence the cancellation order may kindly be quashed. Ground No. 7 On the facts and circumstances of the case, the Ld. CIT (Exemption) grossly erred in law and facts by rejecting application of assessee seeking approval under Section 80G(5) on the ground of non satisfaction about the genuineness of activities of the trust by ignoring the submissions made by the assessee and on the basis of reasons that are not connected with genuineness of activities of trust. Further, no proper opportunity of being heard was provided to assessee for submitting additional documents and ignoring the fact that the almost all the documents so asked for were already submitted by the assessee at the time of provisional registration. It is thus hereby prayed for quashing the rejection order so passed and order for grant of registration. We hereby bring to the notice of the H'ble bench few facts: a. The assessee has submitted a reply dated 26.05.2023 in which almost all the queries raised by the Ld. CIT Exemption, Jaipur were duly addressed. However, ignoring same, the rejection order was passed on the same grounds like non giving of complete donation list, detail of rented properties etc. We hereby draw attention of the H'ble members to Page No. 25-86 of paper book submitted by us wherein Annexure 11 (Page no. 83-86) of the said reply contains details of donations received by the assessee trust. Similarly, details of charitable activities undertaken have been elaborated in reply to Point 14 (Page 33-61 of paper book). As regards details of rented properties is concerned, reply to Point 14, 18 to 20 clearly addresses same (Page 62-82. Hence, it can be clearly concluded that the rejection order was passed in a haste and without considering the reply filed by the assessee. It is hereby mentioned that only relevant annexures have been enclosed by assessee in Paper Book. b. We hereby also draw the attention of the H'ble members to the fact that some grounds which have been taken by Ld. CIT Exemption, Jaipur for rejecting application are not at all related to evaluation of genuineness of activities of trust such as General Expense, Printing & Stationery etc. hence, the rejection have been made on grounds which were outside the purview of powers laid down by law and hence rejection order is liable for being quashed. It is hereby prayed for allowing this ground of appeal by the assessee. With the above submissions, we hereby pray the Ld. Bench to allow the appeal of the assessee.”

9 ITA No. 552 & 553/JPR/2023 Vivan Seva Sansthan-Ek Kadam Manavata Ki Aur 5. Per contra, the ld. DR relied on the orders of the ld. CIT(E) and submitted that the assessee even though various opportunities were given has not submitted required details and therefore, the plea of the assessee is not maintainable.

10 ITA No. 552 & 553/JPR/2023 Vivan Seva Sansthan-Ek Kadam Manavata Ki Aur before the ld. CIT(E) and the assessee is directed to produce all the relevant papers concerning both the applications so filed before the ld. CIT(E) to settle the dispute raised hereinabove. 7. 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 the merits of the dispute, which shall be adjudicated by the ld. CIT(E) independently in accordance with law. In the result, the appeals of the assessee in ITA No. 552/JPR/2023 and ITA No. 553/JPR/2023 are allowed for statistical purposes. Order pronounced in the open court on 18/12/2023. Sd/- Sd/- ¼jkBkSM+ deys'k t;UrHkkbZ ½ ¼MkWa-,l-lhrky{eh½ (RATHOD KAMLESH JAYANTBHAI) (Dr. S. Seethalakshmi) ys[kk lnL; @Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 18/12/2023 *Santosh आदेश की प्रतिलिपिअग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू The Appellant- Vivan Seva Sansthan-Ek Kadam Manavta Ki Aur, Jaipur. 1. 2. izR;FkhZ@ The Respondent- CIT, Exemption ,Jaipur. 3. vk;djvk;qDr@ The ld CIT 4. vk;dj vk;qDr¼vihy½@The ld CIT(A) 5. विभागीय प्रतिनिधि] आयकरअपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 6. xkMZQkbZy@ Guard File ITA No. 552 & 553/JPR/2023) vkns'kkuqlkj@ By order,

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