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Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT
Before: Shri Waseem Ahmed & Shri Siddhartha Nautiyal
आदेश/ORDER
PER BENCH:- These two appeals filed by assessee, arise from order of the Principal Commissioner of Income Tax (Exemptions), Ahmedabad dated 18-09-2017 & 28-11-2017, in proceedings under section 12AA & 80G (5) of the Income Tax Act, 1961; in short “the Act”.
I.T.A Nos. 402/Rjt/2017 & 35/Rjt/2018 Page No. 2 Seasons Square Charitable Trust vs. Pr. CIT (Exemptions)
The assessee has raised the following grounds of appeals:-
ITA No. 402/Rjt/2017
• “The Ld. Pr. Commissioner of Income Tax (Exemptions), Ahmedabad erred in law and on facts in not appreciating the submissions with application of the appellant and consequently in dismissing the application for registration.
• The Ld. Pr. Commissioner of Income Tax (Exemptions), Ahmedabad erred in not taking into consideration of papers submitted before him and not allowing the opportunity to produce documentary evidences about the genuineness of the activities. • The order of Ld. Pr. Commissioner of lncome Tax (Exemptions), Ahmedabad, being against well settled law in this behalf, deserves to be set aside, because he also failed to consider the merits of case and passed the order without giving reasonable opportunity of hearing. • The Ld. Pr. Commissioner of Income T'ax (Exemptions), Ahmedabad erred in law by issuing final order withuot giving sufficient opportunity and thereby not allowing the appellant to produce the records. • The Ld. Pr. Commissioner of Income Tax (Exemptions), Ahmedabad has erred in facts by assumption that the appellant has neither carried out any charitable activities nor established any corpus. • Your appellant craves leave to add, alter or amend the grounds of appeal.”
ITA No. 35/Rjt/2018
I.T.A Nos. 402/Rjt/2017 & 35/Rjt/2018 Page No. 3 Seasons Square Charitable Trust vs. Pr. CIT (Exemptions)
• “The Ld. Pr. Commissioner of Income Tax (Exemptions), Ahmedabad erred in law and on facts in not appreciating the submissions by the appellant and consequently in dismissing the application for grant of approval fund under section 80G(5)(vi) of the IT Act. • The Ld. Pr. Commissioner of Income Tax (Exemptions), Ahmedabad erred in not taking in to consideration that appeal has been filed before Hon. ITAT for registration under section 12AA, of the IT' Act. • The order of ld. Pr. Commissioner of Income Tax (Exemptions), Ahmedabad, being against well settled law in this behalf, deserves to be set aside, because he also failed to consider the merits of case and passed the order without giving reasonable opportunity of hearing. • The Ld. Pr. Commissioner of Income Tax (Exemptions), Ahmedabad erred in law by issuing final order without giving sufficient opportunity and thereby not allowing the appellant to produce the records.
• Your appellant craves leave to add, alter or amend the grounds of appeal.”
The facts in both the appeals are common and hence the same are being disposed of by a common order.
ITA 402/Rjt/2017
Briefly stated, the facts are that the assessee filed application for registration of the trust under section 12AA of the Act on 17-03-2017, in response to which Ld. Pr. CIT issued letter dated 12-05-2017 asking for certain details. However, on the date of hearing, none appeared on behalf of
I.T.A Nos. 402/Rjt/2017 & 35/Rjt/2018 Page No. 4 Seasons Square Charitable Trust vs. Pr. CIT (Exemptions)
the assessee. Thereafter, another notice was issued to the assessee dated 01- 08-2017 fixing the date of hearing for 28-08-2017. In response, the assessee filed a letter in which it expressed its inability to file details. Accordingly, the Ld. Pr. CIT dismissed the assessee’s application for registration with the following observations:
Perusal of records reveals that the applicant has neither carried out any charitable /religious activities nor established corpus to undertake the charitable activities. This clearly indicates that the applicant does not have intention even to start charitable religious activities. Section 12AA makes it very clear that for granting registration 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 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 judgment delivered by the Hon’ble Supreme Court in the case of Commissioner of Income Tax, Ujjain Vs. Dawood Bohara Jamat Civil Appeal No. 2492 of 2014. The facts considered in para 14 of the judgment by the Hon’ble Apex Court are reproduced for sake of convenience:
“Section 12AA lays down the procedure to be followed by the Commissioner for grant or refusal of application for registration made under section 12A. According to procedure so laid down, the Commissioner shall call for documents and information and conduct
I.T.A Nos. 402/Rjt/2017 & 35/Rjt/2018 Page No. 5 Seasons Square Charitable Trust vs. Pr. CIT (Exemptions)
an enquiry to satisfy himself of the genuineness of the trust and upon reaching satisfaction of the charitable or religious nature of the objects and the authenticity of the activities of the trust, he would grant registration. If he is not satisfied of the aforesaid, the request made in the application may be declined.
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 these activities are in consonance with its objects.
Looking to the above facts, I am unable to arrive at the satisfaction of the genuineness of the activities. Hence, the application filed in Form No. 10A for the approval u/s. 12AA of the Income-tax Act is rejected.
Before us, the counsel for the assessee submitted that the first notice dated 12-05-2017 was never received by the assessee. So far as the second notice is concerned, the assessee was tied up in a social function and also due to newly introduced GST laws, he was extremely tied up and was unable to attend the hearing, but he filed letter seeking more time to file the requisite details. However, the assessee’s request for grant of time was rejected without assigning any reasons and the assessee’s application for registration of Trust was rejected summarily. The counsel for the assessee submitted before us that the non-appearance before Ld. Pr. CIT was caused due to unavoidable circumstances and in the instant facts, insufficient opportunity was granted to the assessee to present his case. The Ld.
I.T.A Nos. 402/Rjt/2017 & 35/Rjt/2018 Page No. 6 Seasons Square Charitable Trust vs. Pr. CIT (Exemptions)
Departmental Representative, in response has relied upon the observations made in the order passed by the Ld. Pr. CIT rejecting the assessee’s application.
We have heard the rival contentions and perused the material on record. In our considered view, in the interests of justice, it is a fit case where the assessee should be granted an opportunity to present its case on merits. Therefore, the case is being restored to the file of Ld. Pr. CIT for fresh adjudication on merits after giving an opportunity for hearing to the assessee.
In the result, appeal of the assessee is allowed for statistical purposes.
ITA No. 35/ Rjt/2018
The facts of this case are similar to ITA number 402/Rjt/2017. In the instant case, the assessee had filed application for registration of the trust under section 80G(5) of the Act. The Ld. Pr. CIT gave opportunities to the assessee to present his case, but the same remained uncompiled with and the assessee’s application was dismissed ex-parte. The counsel for the assessee submitted that inadequate opportunity was given to the assessee to present his case, and prayed that in the interests of justice the file may be restored to the Ld. Pr. CIT for fresh adjudication on merits after giving due opportunity of hearing to the assessee.
I.T.A Nos. 402/Rjt/2017 & 35/Rjt/2018 Page No. 7 Seasons Square Charitable Trust vs. Pr. CIT (Exemptions)
We are of the considered view that in the interests of justice the assessee should be granted an opportunity to present its case on merits. Therefore, the case is being restored to the file of Ld. Pr. CIT for fresh adjudication on merits after giving an opportunity for hearing to the assessee.
In the result, appeal of the assessee is allowed for statistical purposes.
In the combined result, both the appeals of the assessee are allowed for statistical purposes.
Order pronounced in the open court on 01-07-2022
Sd/- Sd/- (WASEEM AHMED) (SIDHHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Rajkot : Dated 01/07/2022 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order,
Assistant Registrar, Income Tax Appellate Tribunal, Rajkot