USMANIA EDUCATIONAL & WELFARE TRUST,PATNA vs CIT (EXEMPTION), PATNA

Income Tax Appellate Tribunal, ‘PATNA BENCH’ AT KOLKATA,

Before: Shri Rajpal Yadav, Vice-(KZ) & Shri Girish Agrawal

Per Rajpal Yadav, Vice-President (KZ):- The present appeal is directed at the instance of assessee against the order of ld. Commissioner of Income Tax (Exemption), Patna dated 18.11.2019 passed under section 12AA(1)(b)(ii) of the Income Tax Act, 1961. This appeal is on the Board since 22.10.2021. It was listed on 09.11.2021 but no one appeared on behalf of the assessee and hearing was adjourned to 22.12.2021. Thereafter continuously it has been adjourned 3-4 times and every time fresh notice was issued to the assessee, but no one has come present on behalf of the assessee. On the last occasion on 17th February, 2022, the Bench has adjourned the hearing to 15.03.2022 and issued fresh notice to the assessee as well as to the counsel, whose letter-head is available on the record. Inspite of all these efforts, no one has come present. The impugned order passed by the ld. Commissioner reads as under:-

Name and address of the Applicant USMANIA EDUCATIONAL & WELFARE TRUST SABALPUR DIDARGANJ, PATNA-800009, Bihar, India

PAN: Applic1cation Order No. Date: AAATU8493M No.CIT ITBA/EXM/S/EXM1/2019- 18/11/ EXEMPTION, 20/1020642389(1) 2019 PATNA/2019- 20/12AA/10373

“Order under section 12AA(1)(b)(ii) of the Income Tax Act, 1961

The applicant Society/Trust “USMANIA EDUCATIONAL & WELFARE TRUST” filed application on 09.08.2019 in Form No. 10A of the Income Tax Rules, 1962 for grant of registration u/s 12AA of the Income Tax Act, 1961. The applicant was requested to attend the hearing on 03.09.2019 vide this office letter no. 3730 dated 20.08.2019 either in person or through an authorized representative with relevant documents. But the applicant did not appear. Last opportunity was given to appear on dated 21.10.2019 vide this office letter no. 4629 dated 10.10.2019. However, the applicant did not appear again but some documents have been received through Dak on 23.10.2019.

However, on perusal of documents available on record it is found that the applicant has claimed some activities as to have been performed in previous years but failed to corroborate them with documentary evidences.

In view of such, I am not satisfied about the genuineness of the activities of the Trust/Society as claimed and hence the application filed in Form 10A for grant of registration u/s 12AA of the Income Tax Act, 1961 is hereby rejected.

Sd/- HARISHANKAR KUMAR LAL CIT EXEMPTION, PATNA”

Section 12AA has direct bearing, therefore, it is imperative upon us to take note of it, which read as under:- “[Procedure for registration:

12AA. (1) The Principal Commissioner or Commissioner, on receipt of an application for registration of a trust or institution made under clause (a) [or clause (aa) of sub-section (1)] of section 12A, shall— (a) call for such documents or information from the trust or institution as he thinks necessary in order to satisfy himself about ,- (i) the genuineness of activities of the trust or institution; and (ii) the compliance of such requirements of any other law for the time being in force by the trust or institution as are material for the purpose of achieving its objects, and may also make such inquiries as he may deem necessary in this behalf; and (b) after satisfying himself about the objects of the trust or institution and the genuineness of its activities, [as required under sub-clause (i) of clause (a) and compliance of the requirements under sub-clause (ii) of the said clause], he— (i) shall pass an order in writing registering the trust or institution; (ii) shall, if he is not so satisfied, pass an order in writing refusing to register the trust or institution, and a copy of such order shall be sent to the applicant : Provided that no order under sub-clause (ii) shall be passed unless the applicant has been given a reasonable opportunity of being heard. [(1A) All applications, pending before the [Principal Chief Commissioner or] Chief Commissioner on which no order has been passed under clause (b) of sub-section (1) before the 1st day of June, 1999, shall stand transferred on that day to the Principal Commissioner or] Commissioner and the [Principal Commissioner or] Commissioner may proceed with such applications under that sub-section from the stage at which they were on that day.] (2) Every order granting or refusing registration under clause (b) of sub-section (1) shall be passed before the expiry of six months from the end of the month in which the application was received under clause (a) [or clause (aa) of sub-section (1)] of section 12A.] [(3) Where a trust or an institution has been granted registration under clause (b) of sub- section (1) [or has obtained registration at any time under section 12A [as it stood before its amendment by the Finance (No. 2) Act, 1996 (33 of 1996)]] and subsequently the [Principal Commissioner or] Commissioner is satisfied that the activities of such trust or institution are not genuine or are not being carried out in accordance with the objects of the trust or institution, as the case may be, he shall pass an order in writing cancelling the registration of such trust or institution: Provided that no order under this sub-section shall be passed unless such trust or institution has been given a reasonable opportunity of being heard.] [(4) Without prejudice to the provisions of sub-section (3), where a trust or an institution has been granted registration under clause (b) of sub-section (1) or has obtained registration at any time under section 12A [as it stood before its amendment by the Finance (No. 2) Act, 1996 (33 of 1996)] and subsequently it is noticed that (a) the activities of the trust or the institution are being carried out in a manner that the provisions of sections 11 and 12 do not apply to exclude either whole or any part of the income of such trust or institution due to operation of sub-section (1) of section 13; or (b) the trust or institution has not complied with the requirement of any other law, as referred to in sub-clause (ii) of clause (a) of sub-section (1), and the order, direction or decree, by whatever name called, holding that such non-compliance has occurred, has either not been disputed or has attained finality, then, the Principal Commissioner or the Commissioner may by an order in writing cancel the registration of such trust or institution: Provided that the registration shall not be cancelled under this sub-section, if the trust or institution proves that there was a reasonable cause for the activities to be carried out in the said manner.] (5) Nothing contained in this section shall apply on or after the 1st day of April, 2021”.

A perusal of the above Section would reveal that on receipt of an application for registration of a Trust or Institution made under different clauses of section 12AA, the ld. CIT Exemption/CCIT shall call for such documents and other details, which would satisfy him about the genuineness of activities of the Trust or Institution. After conducting inquiry and satisfying himself, (CIT Exemption) would pass an order in writing registering the Trust or Institution or if not satisfying then he can refuse to register the Trust or Institution. Before rejection of application, an opportunity of hearing was to be granted to the applicant i.e. the assessee.

A perusal of the order passed under section 12AA (extracted supra) would reveal that assessee has not submitted the requisite details in support of its claim. Neither any one appeared on behalf of the assessee nor submitted requisite details. Even in the appellate proceedings, where such activities could be re-appreciated, the assessee failed to submit the details as well as failed to appear before the Tribunal. In view of the above, we do not find any merit in this appeal and hence rejected.

In the result, the appeal of the assessee is dismissed. Order pronounced in the open Court on April 19, 2022.

USMANIA EDUCATIONAL & WELFARE TRUST,PATNA vs. CIT (EXEMPTION), PATNA