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Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR.
Before: DR. M. L. MEENA & SH. ANIKESH BANERJEE
ORDER Per: Anikesh Banerjee, JM: The instant appeal of the assessee was filed against the order of the ld. Commissioner of Income-tax (Appeals)-NFAC, Delhi, (in brevity ‘the CIT (A)’) order passed u/s 250 of the Income-tax Act, 1961 (in brevity the Act) for assessment year 2019-20. The impugned order was emanated from the order of the ld. DCIT/ACIT, NFAC, Delhi, (in brevity the ld. AO) order passed u/s 144B of the Act.
The appeal was filed with a delay of 101 days. The assessee filed petition for condonation of delay and explained that the insurgency was going on in the Kashmir Valley and also the death of brother of main trustee (Chairman) of the Trust, were the reason for the delay of 101 days for filing appeal. The ld. DR had not made any objection related to condonation petition. Accordingly, the delay of 101 days is condoned.
3. The assessee has taken the following grounds:
“1. That the assessee is a Trust carrying on Charitable activities without any caste, color and creed.
2. That the assessment order was passed by the faceless department without providing an opportunity of being heard to the assessee.
That all the collections made by the assessee during the year were distributed to the needful people without any cast and creed.
That instead of encouraging the assessee in respect of carrying of Charitable activity, assessee was imposed with the baseless heavy tax burden of Rs.20,05,576.00
That all the donation received by the assessee from the General Public which was distributed to the needy people was added back without any basis and reasonable ground by the Assessing officer.
6. That the assessee craves leave to modify or to delete or to add any other ground of appeal at the time of hearing.”
4. When the appeal was called for hearing, none was present on behalf of the assessee. On perusal of the record, we find that the assessee filed petition for adjournment of hearing. The reason for adjournment was that the counsel for assessee is busy in filing return. The assessee also filed the written submission in favour of its argument. The reason for adjournment of hearing is not accepted and duly rejected by the bench. We proceed to dispose of the appeal ex parte qua for assessee after hearing the ld. DR. 5 Brief fact of the case is that the assessee is a charitable trust and filed the application for registration u/s 12AA of the Act. But the application was rejected by the revenue. Further, the assessee now stands registered in both u/s 12AA and 80G of the Act as claimed by the assessee. During impugned assessment year the assessee received donation amount of Rs.51,09,641/- and also received bank interest amount to Rs.55,696/- which works out total amount of Rs.51,65,337/-. The assessee filed the return with total income ‘Nil’. But the ld. AO had rejected the deduction u/s 11 and 12 and added back the amount of Rs.51,09,641/- and added back interest from bank amount to Rs. 55,696/-. The ld. AO allowed deduction U/s 57 on the expenses i.e. the miscellaneous expenses Rs.15,056/-, Printing Stationery Rs.2,028/- and Professional Fee Rs. 5,000/-which works out total amount of Rs. 22,084/-. The ld. AO allowed deduction amount to Rs. 22,084/- from the total amount of Rs. 51,65,337/- which works out to Rs.51,43,253/-. The amount of Rs.51,43,253/- was added back with the total income of the assessee. Being aggrieved assessee filed an appeal before the ld. CIT(A). The ld. CIT(A) adjudicated the issue and upheld the order of the ld. AO. The ld. CIT(A) rejected the deduction u/s 11 & 12 in this impugned assessment year as the assessee was not registered u/s 12AA of the act. Being aggrieved assessee filed an appeal before us.
The assessee filed a written submission which is kept in the record. First we look on the ground no. 2, that the assessee was denied the reasonable opportunity during the appeal proceeding. The registration u/s 12AA and 80G are restored and assessee is a registered firm. So, the entire receipt is allowable for deduction u/s 11 of the Act. The ld. AR further argued that the assessee was unable to attend the hearing properly due to disturbance and insurgency in the Kashmir Valley. The details submission of the assessee is extracted as below:
“That the assessee is charitable trust created on 27-07-2003, under the name & title of Aamina Charitable Trust duly established by a Trust Deed having its registered office at Awantipora Pulwama. That the aim and objects of the Trust shall be to provide financial assistance to such distressed families who have lost their wage earner or who do not have sufficient source of subsistence for living a simple life of a human being with human dignity and honour. The motive behind this service to humanity shall be to seek mercy and bless of Almighty Allah in this life and the life to come.
That the assessee applied for registration u/s 12AA of the Income Tax Act, 1961 which has been rejected on flimsy technical grounds vide order dated 22-07-2019 without affording adequate opportunity to rectify defects despite knowing there being Covid restrictions & abrogation of Article 370 during these days. That rejection order as such has been passed at the back of assessee against the principles of natural justice.
That the trust now stands registered both U/S 12AA & 80G, which is itself testimony to the facts that earlier application was rejected on flimsy grounds and not on any serious issue. That registration now granted shall be sufficient to cure the technical defects retrospectively for which humble submission is made.
That during the said financial year out of the total Gross Receipts of Rs. 5165337.00 the total expenditure was Rs. 5188354.00 that is excess expenditure of Rs. 23017.00. Therefore, what could to brought to tax is the net income in the hands of the assessee trust and not the gross receipts. That the failure of Ld. Assessing Officer to verify submissions properly has led this assessment being completed arbitrarily and without application of proper mind.”
The ld. DR vehemently argued and relied on the order of the revenue authorities.
We heard the submission of the ld. DR, considered the documents available in the record of the orders of revenue authorities. In our considered view, the assessee has reasonable ground for nonappearance and non- submission of the documents before the revenue authorities in both the proceedings. The assessee had suffered the insurgency and blocked in the Kashmir Valley during the time of hearing before both the authorities. The assessee claimed that the registration u/s 12AA and 80G are now restored and assessee is treated as a registered trust. The assessee submitted the audit report, financial statement, ledger and cash book and voucher before the bench. On perusal of the documents the assessee is maintaining the proper books for its claim. The ld. DR had not made any strong objection against the assessee’s claim. We remit back the matter to the ld. CIT(A) for further adjudication de novo for the sake of justice we are not make any comment on the assessee’s issues. Ordered, accordingly.
In the result, appeal of the assessee is allowed for statistical purposes.