KUTCH MANDAP & ELECTRICAL HIRES ASSOCIATION ,BHUJ-KUTCH vs. THE CIT(EXEMPTIONS), , AHMEDABAD

A perusal of the order of the Ld. CIT reveals that the application of the assessee for registration of the trust under Section 80G(5) of the Act was rejected for the reason that Form No. 10G filed alongwith the application was incomplete since it did not provide any details of the activities carried out by the assessee-trust and also for the reason that the details of the activities carried out by the assessee-trust during the impugned year were not substantiated with evidences. Paragraph No.5 of the Ld. CIT’s order reveals the above as under:-

2 Kutch Mandap & Electrical Hires Assn Vs. CIT (Exemptions) AY : 2017-18 “5. Perusal of submission field reveals that the trust is formed on 16.03.2017. As no activities were carried out during the FY 2016-17, accounts were not furnished. Further, during FY 2017-18, the activities mainly include conducting seminars for which details of charitable activities carried out within the meaning of Section 2(15) of IT Act remain to be furnished for verification. Section 80G(5) rwR 11AA of Income Tax Rule 1962 makes it very clear that before granting approval under this section, the Commissioner has to satisfy himself about the genuineness of the activities of the trust or institution and also he has to verify that these activities are in consonance with the objects of the trust or institution. Reliance in this regard is placed on the case of Hardayal Charitable and Educational Trust Vs. CIT-II, Agra, 150 TTJ 384 (Agra) (2012) or 25 Taxmann.com 28 (Agra). As discussed in para 2 above, the assessee had submitted incomplete from No.10G and approval u/s 80G(5) cannot be granted in response to incomplete form No.10G. As discussed above, the applicant has failed to file documentary evidences to enable me to satisfy about the genuineness of its activities and to, verify that these activities are in consonance with its objects.”

We have noted from the order of the Ld. CIT that only two notices were issued to the assessee, first dated 28.09.2017 and the other dated 10.01.2018. First one though remained uncomplied with, in response to the second notice submissions were filed by the assessee vide letter dated 06.02.2018. Copy of the said letter was filed before us in paper-book at page Nos.43 to 55 and a perusal of the same reveals that, on the query raised by the Ld. CIT asking for details of activities carried out by the assessee-trust, detailed reply had been furnished by the assessee contending that the trust had distributed cold drinking water to public at free of charge during summer season, had arranged educational and informative seminar for public at large for awareness of tax law & recently introduced GST law and had also arranged blood donation camp. The letter also reveals that the copies of photographs, voucher of expenses and details of activities carried out were also enclosed. Copies of the same were also filed before us, which included the photographs of blood donation camps and seminars carried out by the assessee-trust as also a bill for supply of cool water. It is evident that, as far as the activities carried out by the assessee-trust were 3 Kutch Mandap & Electrical Hires Assn Vs. CIT (Exemptions) AY : 2017-18 concerned, the onus cast was clearly discharged by the assessee-trust giving all details of activities carried out along with all possible evidences in its possession for the same. We fail to understand how the Ld. CIT found that the details of the seminars conducted by the assessee-trust remained to be furnished for verification. If the details as above submitted by the assessee- trust were found to be insufficient by the Ld. CIT for verification of the activities carried out by it for the purpose of being satisfied about the genuineness of the assessee-trust for granting approval under Section 80G(5) of the Act, he could very well have sought further information from the assessee- trust. As it is only two notices were issued to the assessee-trust and after taking the response of the assessee-trust as noted above, the Ld. CIT concluded the proceedings without conducting any further inquiries, refusing to grant approval to the assessee-trust. Since we have noted that the assessee-trust did furnish information of activities carried out by it along with evidences in its possession and adequate opportunity of hearing was not granted by the learned CIT(A), in the interest of justice, we consider it fit to restore the issue back to the Ld. CIT to make all necessary verification that he requires for the purpose of granting approval under Section 80G(5) of the Act. Needless to add due opportunity of hearing be provided to the assessee.

In view of the above, the appeal of the assessee is allowed for statistical purposes.