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

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR. BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. ANIKESH BANERJEE, JUDICIAL MEMBER

I.T.A. No. 117/Asr/2019 Assessment Year: 2018-19

Sant Baba Jiwan Singh Kar Vs. CIT (Exemption) Sewa Charitable Trust, tarn Chandigarh. Taran. [PAN:- AAVTS4799K] (Respendent) (Appellant)

Appellant by Sh. Ashwani Kalia, CA Respondent by Sh.Rohit Mehra, CIT.DR.

Date of Hearing 23.08.2022 Date of Pronouncement 12.09.2022

ORDER Per:Anikesh Banerjee, JM:

The instant appeal of the assessee is directed against the order of the ld. Commissioner of Income Tax(Exemptions), [in brevity the CIT(E)] bearing Order

No. ITBA/EXM/S/EXM1/2018-19/1014654090(1), order passed u/s 12AA (1)(b)(ii) of the Income Tax Act, 1961 (in brevity the Act), date of order 29.12.2018, for A.Y. 2018-19.

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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.

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

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intoxication and drugs and other unhealthy practices, to plant trees, maintain parks

for environmental protection.

4.1 In proceeding of application for registration, the ld. CIT(E) had raised the

queries related to the sale of crops amount to Rs.6,56,42,912/-. The ld. Counsel

explained that the Sewadars (devotee) informed the villagers around Tarn Taran

and Patti about the activities of the trust and for that purpose the villagers donated

their crops. It is a normal practice to serve the people and it contains a religious

value. The excess stock of the crop was sold by the assessee and utilized the

amount for construction of religious place.

He further argued that the observation of the ld. CIT(E) is contravening of the

section 12AA of the Act. The revenue authority only to verify the genuineness of

the trust and main object.

4.2 The ld. Counsel also pointed out that the books of the parties and brokers

related purchase of the crops were produced before the revenue authority and also it is annexed in page no. 42 to 52 of the APB. There is no question about the

genuineness of the transaction. Accordingly, the rejection of the application is

arbitrary and bad in law.

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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:

“10. In light of all of the above discussion it is clear that the make-believe story of the applicant that the trust sold crops of Rs. 6,56,42,912/- and the sales proceeds thereof came as donations to the said trust is totally concocted story based on false documents. The genuineness of the objects and the activities of such a trust definitely is not established. Hence, the application for registration u/s 12AA of the Act, with the present state of affairs, is accordingly rejected.” 6. 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.

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

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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.

statistical purposes.

Order pronounced in the open court on 12.09.2022

Sd/- Sd/-

(Dr. M. L. Meena) (ANIKESH BANERJEE) Accountant Member Judicial Member

AKV Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T.