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Income Tax Appellate Tribunal, AHMEDABAD “C” BENCH, AHMEDABAD
PER SUCHITRA KAMBLE, JUDICIAL MEMBER:
This appeal is filed by the assessee against order dated 27.07.2019 passed by the CIT (Exemption), Ahmedabad.
The assessee has raised the following grounds of appeal :-
1.1 The order passed u/s.12AA(1)(b)(iii) passed on 27.07.2019 by DIT(Exem), Ahmedabad declining to grant registration to the appellant Trust is wholly illegal, unlawful and against the principles of natural justice. 1.2 The Ld. DIT(Ex) has grievously erred in law and or on facts in passing the impugned order without giving sufficient opportunity to the appellant to produce necessary evidence in support of the application for registration u/s.12AA Page 2 of 4 2.1 The Ld. DIT(E) has grievously erred in law and on facts in rejecting the application for registration u/s.12AA filed by the appellant for want of compliance to the notice issued on 12.06.2019 though there was sufficient cause for failure to comply the same. 2.2 That in the facts and circumstances of the case as well as in law, the Ld. DIT(E) ought not have rejected the application for registration u/s.12AA filed by the appellant by invoking section 13(1)(b). 3.1 The Ld. DIT(E) has failed to appreciate that the activities of the appellant trust are genuine in nature and conducted in accordance with its objects of the trust.”
The assessee is a Charitable Trust and engaged in providing benefit called Vatsalya Nidhi Fund to the heirs of the deceased member. It is duly registered with Bombay Public Trust Act, 1950 dated 02.11.2010. The Trust maintains the books of accounts and other records regularly and in accordance with the applicable laws. As stated by the Ld. AR, the assessee Trust is subjected to audit under the Trust Act and Income Tax Act. The assessee Trust filed application for registration of the Trust under Section 12AA of the Income Tax Act, 1961 on 17.01.2019. While processing the said application for registration, the DIT(E) issued first notice dated 12.04.2019 by e-mail. The assessee Trust could not file the reply to this notice on the fixed date in view of the e-mail notice not known to the assessee Trust but subsequently submitted the reply dated 24.04.2019 as part of compliance. Later on, the DIT(E) issued a fresh notice on 12.06.2019 calling for details listed at Sl. No.1 to 10 therein. The DIT(E) observed that the assessee failed to comply with the notice dated 12.06.2019 and in absence of any compliance or documentary evidence produced to prove the genuineness of the activities, the DIT(E) rejected the application for registration under Section 12AA of the Income Tax Act.
Being aggrieved by the Order under section 12AA(1)(b)(iii) of the Act passed by the CIT(E), the assessee preferred appeal before us.
The Ld. AR submitted that the assessee has submitted all the relevant documents including that of constitution of the assessee Trust and objects of the Trust as well as the list of Trustees with KYC documents, audit report with the audited annual account for the financial year 2015-16 to 2017-18. The Ld. AR submitted that the list of members of Gnati, Income Tax return with computation of income for assessment year 2016-17 and 2017-18 and also that of assessment Page 3 of 4 year 2019-20. The Ld. AR submitted that the CIT(E) without taking cognisance of the objects of the assessee Trust has simply rejected the application of the assessee Trust. The Ld. AR relied upon the decision of CIT vs. Leuva Patel Seva Sanaj Trust (2014) 42 taxmann.com 181 (Gujarat).
The Ld. DR submitted that since the assessee Trust has not given any details and the assessee Trust does not have intention even to start charitable/religious activities, therefore, the application was rightly rejected for registration under Section 12AA of the Act and also rejected the same by invoking provisions of Section 13(1)(b) of the Act. The Ld. DR relied upon the decision of the Tribunal in case of Amreli Modh Vanik Community Property vs. CIT (Exemption) (2023) 150 taxmann.com 179 (Rajkot Tribunal), Shri Gurudwara Sahib Parbhandhan Committee vs. CIT (Exemptions) (023) 150 taxmann.com 181 (Amritsar Tribunal), Ghulam Mohidin Trust vs. CIT (2001) 248 ITR 587 (J&K High Court) 7. We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the CIT(E) has not taken cognisance of the objects of the assessee Trust and has observed that the assessee has made only part compliance and, therefore, all the relevant documents has not been taken into consideration while rejecting the registration application under Section 12AA of the Act. Therefore, it will be appropriate to remand back this matter to the file of the CIT(E) for proper adjudication of the issues after verifying all the details/documents submitted by the assessee Trust and decide the case as per Income Tax Statute. Needless to say, the assessee be given opportunity of hearing by following the principles of natural justice. 8. In the result, appeal filed by the assessee is partly allowed for statistical purpose.
Order pronounced in the open Court on this 6th March, 2024.