SANT BABA JIWAN SINGH KAR SEWA,TARN TARAN vs. COMMISSIONER OF INCOME TAX -EXEMPTION, CHANDIGARH

The brief fact of the case is that the assessee is a trust and filed application for registration u/s 12AA of the Act before the ld. CIT(E). During the hearing proceeding the revenue authority had raised a question about the genuineness of the trust in relation to selling of crops amount of Rs.6,56,42,912/- which was donated by the devotees to trust. The ld. CIT(E) did not accept the transaction due to lack of transparency and also found the discrepancy in the transaction related to sale of excess crops which was sold to local market by the trust. The assessee submitted the submission in respect of its claim about the genuineness of the transaction. The application of the assessee was rejected, and order was passed accordingly.

Being aggrieved, assessee filed an appeal before us.

The ld. Counsel for the assessee submitted a written submission which is containing from page no. 1 to 32 and another page no. 1 to 19 which are kept in the record. The ld. Counsel for the assessee argued that the assessee is a trust and main object of the trust are construction and renovation of “Langar Halls” i.e. community kitchens where free food will be served to all poor, helpless, sick and old aged without distinction of caste, creed or religion, to construct roads, bridges, culverts to connect people of remote villages, to desist, people from drinking intoxication and drugs and other unhealthy practices, to plant trees, maintain parks for environmental protection.

The ld. CIT DR vehemently argued and placed that the whole transaction is bogus and the genuineness of the transaction in question. The ld. CIT DR relied on para 10 of the order of ld. CIT(E) which is reproduced as below:

We heard the rival submissions and relied on the documents available in the record. The provision of section 12A is clearly indicating to verifying the genuineness of the trust and the activity related to main object of the trust. The revenue authority had verified only the genuineness of the trust which is not acceptable as per his order. But the other part, the activity related to main object was lack of verification, the order is incomplete one as per the section 12AA and the proper verification was not done by the revenue authority before passing the order.

The counsel of the assessee submitted the documents before the revenue authority during the proceeding. But no cross verification was made for ascertaining the genuineness of the transaction by the ld. CIT(E). We find that the order of the ld. CIT(E) is incomplete one. Accordingly, the matter is setting aside to ld. CIT(E) for making complete verification in respect of genuineness of the transaction and the activities of the trust, in relation to the main object. Needless to say, that the ld. CIT(E) shall provide proper and adequate opportunity of being heard to the assessee in set aside proceedings. The evidences/explanations submitted by assessee in its defence shall be admitted by theld. CIT(E), and adjudicated by ld. CIT(E) on merits in accordance with law.

We pass the order accordingly, in respect to the terms indicated as above. In the result, the appeal bearing 9. statistical purposes.