A.C. EDUCATIONAL WELFARE SOCIETY,MOHALI vs. CIT-II, CHANDIGARH

Per Sanjay Garg, Judicial Member:

The present appeal has been preferred by the applicant-society A.C. Educational Welfare Society, Mohali agitating the rejection of the application of the applicant- society for registration u/s 12AA of the Income-tax Act, 1961 (in short 'the Act') by the Commissioner of

Income Tax-II, Chandigarh (herein referred to as ‘CIT’) vide order dated 23/24-7-2013.

society, wherein, it has been deposed that being President of the

ITA No. 800/Chd/2014- A.C. Educational Welfare Society, Mohali 2

society, he only use to take care of the matters relating to the

taxation of the society but due to his illness he could not file the

appeal in time. The delay was on account of his illness as he was

suffered from end stage renal disease during the period and he had to

go for dialysis twice a week due to the said reason, he could not

attend the matter relating to the tax affairs of the assessee society.

The Ld. counsel has further invited our attention to the another

affidavit moved by the present Director of the society dated

24.4.2018 namely Shri Saurabh Aganhotri, wherein, it has been

deposed that earlier the tax matter was used to be handled by the

then president of the society Shri A.C. Aganihotri, however, due to

his illness he could not arrange to file the appeal in time. Further,

that Shri A.C. Aganihotri, the then president of the society

subsequently died due to Chronic Kidney Disease. A copy of the

death certificate of Shri A.C Aganihotri is also placed on the file.

Reliance has also been placed on the medical record of Shri A.C.

Aganihotri, the then president of the society.

Commissioner of Income Tax.

we find that the assessee society has demonstrated a reasonable cause

for not filing the appeal in time. In view of this, the delay, if any, in

filing the appeal is hereby condoned and we proceed to hear the

matter on merits.

ITA No. 800/Chd/2014- A.C. Educational Welfare Society, Mohali 3

the impugned order of the Ld. CIT, wherein, the reasons of

rejection of application of the applicant society has been mentioned

that the assessee society had used the funds for the personal needs of

the family members of the president of the society also for the staff

of the society. Further, it was also noted that the assessee society

had been paid hefty salary to one of its employee. Further it has

been noted that though the assessee was asked to explain in this

respect, however, the assessee society failed to give any satisfactory

reply. The Ld. counsel for the assessee in this respect has submitted

that, in fact, the members of the society had taken loan in their

individual capacity from the bank which was given to the society as

such and the said loan amount was further paid by the assessee

society to the members to be further paid back to the bank from

where the loans were obtained. The loan amount was squared off on

the date of application. Further, the queries in this respect were

raised by the Ld. CIT only on 19.7.2013 whereas the order was

passed on 23.7.2013 and no opportunity was granted to the assessee

society to present its case and furnish the necessary explanation.

assessee, in our view, the assessee society is required to be given

proper opportunity to give the necessary explanation about the

queries raised by the Ld. CIT . The impugned order of the Ld. CIT(E)

is, therefore, set aside and the matter is restored to the file of the

ITA No. 800/Chd/2014- A.C. Educational Welfare Society, Mohali 4

CIT for decision afresh on merits, after giving proper opportunity to the applicant society to present its case / explanation. The Ld. CIT is directed to decide the application of the applicant society within 6 months from the date of receipt of copy of this order.

Sd/- Sd/- (ANNAPURNA GUPTA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated 14.08.2018 Rkk Copy to: • The Appellant • The Respondent • The CIT • The CIT(A) • The DR