Income Tax Appellate Tribunal - Jaipur
Soni Shikshan Samitee, Bharatpur vs Assessee on 10 November, 2014
IN THE INCOMETAX APPELLATE TRIBUNAL
JAIPUR BENCH: JAIPUR
(BEFORE SHRI R.P. TOLANI AND SHRI T.R. MEENA)
I.T.A. No. 641/JP/2013
Asstt. Year- ........................
PAN No. AACAS 9139 H
Soni Shikshan Samitee, The C.I.T.
E-33, Jawahar Nagar, Vrs. Alwar (Raj).
Bharatpur (Raj.).
(Appellant) (Respondent)
Assessee by :- Shri Rajendra Agarwal.
Department by :- Shri Subhash Chandra.
Date of hearing : 10/09/2014
Date of pronouncement : 10/11/2014
ORDER
PER: T.R. MEENA, A.M. This is an appeal filed by the assessee against the order dated 30/05/2013 of the learned C.I.T., Alwar. The sole ground of appeal is against rejecting the application for registration U/s 12AA of the Income Tax Act, 1961 (hereinafter referred as the Act) by the learned C.I.T. Alwar.
2. The learned C.I.T. observed that the assessee has filed an application in form No. 10A on 05/11/2012 for granting registration U/s 12AA of the Act. The learned CIT has sought report from the Assessing Officer to examine the activity of the trust. On perusal of report of the Assessing Officer, it was found that the Assessing Officer has simply 2 ITA 641/JP/2013 Soni Shikshan Samitee Vs. CIT recommended the case for registration U/s 12AA and he has not reported whether the assessee samitee fulfilled all the conditions as provided U/s 12AA of the Act read with Rule 17A of the Income Tax Rules, 1962 (in short the Rule). The Assessing Officer has not reported whether the activity and object of the assessee's trust was genuine and charitable in nature. The Assessing Officer has not given a detailed report about the genuineness of the activities and application of funds for its aims and objects and further does not mention whether the assessee's samitee has maintained proper audited account as per law. It is also not verifiable whether the assessee's samitee has produced all the above details and documents before the Assessing Officer. Although, the Assessing Officer has filed the above report alongwith copy of acknowledgement of ITR for A.Ys. 2010-11 to 2012-13 alongwith copy of audit report in form No. 10B. the learned CIT, Alwar, gave reasonable opportunity of being heard to the assessee to explain the followings supporting documents while fixing the case for hearing on 14/5/2013, which are as under:-
1. Explanation with supporting evidence that the activities and aim and objects of the trust/institution are genuine and charitable/religious in nature. Also furnish a note on the activities held for the last three years or from the date of creation of the institution/trust, whichever is less.
2. Explanation with supporting evidence that trust/institution fulfills all the conditions satisfactorily as laid down for 3 ITA 641/JP/2013 Soni Shikshan Samitee Vs. CIT registration U/s 12AA of the I.T. Act with explanation that the application for registration has been made in the prescribed manner with accompanying documents as referred in Rule 17A of the I.T. Rules, 1962.
3. Produce audited books of accounts consisting of cash book, ledger, details with PAN of donors, receipt and expenditure accounts with audit report and its annexures etc. with supporting bill/vouchers for verification of the genuineness of activities and application of fund/income for aims and objects of the trust.
The assessee responded vide letter dated 06/5/2013 and on 14/5/2013 through written reply filed before him, it is submitted by the assessee that the required details has been furnished before the Assessing Officer vide letter dated 28/12/2012 and produced complete books of account, details of income, expenditure and being satisfied from the submission of the statement, the learned DCIT, Circle- Bharatpur has already sent his detailed report through JCIT, Bharatpur to CIT. It is argued before the CIT that through his letter that all details were provided before the Assessing Officer, therefore, registration U/s 12AA of the Act may please be granted. The learned Assessing Officer in his report has submitted to the learned CIT that samitee's activities are charitable considering the provisions of Section 2(15) of the Act and it is a fit case for granting registration U/s 12AA of the Act. The assessee's case was fixed by the learned CIT, Alwar for hearing on 20/5/2013 with request to produce the details as referred to 4 ITA 641/JP/2013 Soni Shikshan Samitee Vs. CIT letter dated 06/5/2013. The assessee filed reply on 15/5/2013 from the President of the Samitee wherein it was claimed that the applicant has already filed the reply before your goodself and also sent the copy of receipt of courier alongwith copy of written reply. The appellant requested to consider its registration on the basis of written reply filed. On the basis of reply of the applicant, it has been concluded by the learned CIT that the assessee did not want to explain the genuineness of the activity and aims and objects of the Samitee and no details/documents etc. have been filed by the assessee before him as per letter dated 06/5/2013. He further observed that the assessee samitee has filed the application in form No. 10A alongwith copy of registration certificate issued by the Registrar of the Society, Bharatpur. The copy of aims and objects has not been certified by the Registrar of society and no other details filed. He further found receipt and payment statement that the assessee has shown lacs of rupees as donations and subscriptions, aids to other institutions, unsecured loans, advance to private persons etc. The genuineness of the activities of the Samitee is not verifiable whether transactions are made as per the aims and objects and charitable purpose as per the provisions of Income Tax Act, 1961. The assessee has failed to explain the genuineness of the activities and objects and also failed to produce note on the activities, details, books of account, vouchers of expenses etc. even after providing 5 ITA 641/JP/2013 Soni Shikshan Samitee Vs. CIT reasonable opportunity of being heard by him. He further relied on the decision of Hon'ble Kerala High Court in the case of Self Employers Service Society Vs. CIT 247 ITR 18, U.P. Forest Corporation & Ors. Vs. DCIT (2008) 297 ITR 001 (SC) and Madhav Prasad Jatia Vs. CIT 118 ITR 200 (SC) (1979). Finally, he rejected the assessee's application for granting registration No. 12AA of the Act.
3. Being aggrieved by the order of the learned C.I.T., Alwar, the assessee carried the matter before us. It is submitted by the learned AR for the assessee that application for registration U/s 12AA of the Act was made on 05/11/2012 U/s 12A(a) of the Act in prescribed form before the learned CIT, Alwar in duplicate enclosing certified copy of instrument under which the trust/institution was crated, evidence for creation of trust, copy of accounts of trust for the year ended on March, 10 to March, 12. The learned ACIT, Alwar has raised certain queries before submitting the report to theld CIT, Alwar pointwise on 28/12/2012. He drawn our attention on page No. 2 of paper book for this purpose. He was satisfied with the explanation and made recommendation for granting of registration U/s 12AA of the Act, which is reproduced as under:-
"The Trust is registered by Registrar of Society, Bharatpur vide registration No. 1/Bharat/1999-2000 dt. 06/04/1999. The registered office of the trust is in existence on the given postal address of the trust and working at present address 6 ITA 641/JP/2013 Soni Shikshan Samitee Vs. CIT as per constitution and bylaws of the trust. The works of the trust covered in the definition of charitable purposes as per amended provisions of section 2(15) of the I.T. Act, 1961 applicable from 01.04.2009 inserted by Finance Act, 2008 and charitable activities are also carried out by the trust. It is a fit case for registration U/s 12AA of the I.T. Act, 1961. Therefore, the same is recommended for registration U/s 12AA of the I.T. Act."
The learned JCIT, Range-1, Alwar after considering all the facts and circumstances and the above report of the learned ACIT vide his report Ref. No. 1176 dt. 21.01.2013 has recommended to the Hon'ble CIT, Alwar for granting the registration U/s 12AA of the I.T. Act, 1961."
The learned CIT rejected the application for registration U/s 12AA by arbitrarily, stating that the trust does not fulfill all the conditions for granting of registration U/s 12AA of the Act and failed to prove the genuineness of activity for granting of registration. He further argued that whatever the case laws cited by the learned CIT are entirely on different issue i.e. society's activities were generating income for its members, which is not the case of the applicant. He further relied on the following case laws:
(1) Tagore Children Academy Society, Surajgarh Vs. CIT, Jaipur (ITA No. 103/JP/2009) XLII Tax World 6 (2009). (2) Fifth Generation Education Society Vs. CIT (1990) 185 ITR 634 (All).
7 ITA 641/JP/2013 Soni Shikshan Samitee Vs. CIT (3) Saint Kabir Education Trust Vs. CIT 128 DTR 267 (Asr.) (4) Aggarwal Mitra Mandal Trust Vs. DIT (Exemption) (2007) 12 SOT 32, 109 TTJ 128.
(5) Reliable Educational Alliance Society Vs. CIT 31 DTR 239 (ITAT) Del..
Therefore, the prayed to direct the learned CIT, Alwar to grant registration U/s 12AA of the Act.
4. At the outset, the learned CIT DR vehemently supported the order of the learned CIT, Alwar.
5. We have heard the rival contentions of both the parties and perused the material available on the record. The Assessing Officer himself satisfied on behalf of the learned CIT and recommended registration U/s 12AA of the Act. However, the learned CIT was not found satisfied with the explanation submitted by the applicant. When all the three years copies of return was with the CIT and copy of aims and objects of the trust created was also submitted before him, he should have considered these aspects to judge the genuineness of the activities before rejecting the registration U/s 12AA of the Act. He should have given a show cause notice for not finding out by him genuineness of the activities of the trust, therefore, we direct the learned CIT to reconsider the assessee's application afresh and the assessee is also directed to cooperate with the CIT and furnish all the 8 ITA 641/JP/2013 Soni Shikshan Samitee Vs. CIT records for his satisfaction. Accordingly we set aside the order of the learned CIT, Alwar.
6. In the result, the assessee's appeal is allowed for statistical purposes only.
Order pronounced in the open court on 10/11/2014.
Sd/- Sd/-
(R.P. TOLANI) (T.R. MEENA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Jaipur, Dated : 10th November, 2014
* Ranjan
Copy forwarded to :-
1. Soni Shikshan Samitee, Bharatpur.
2. The C.I.T., Alwar.
3. The CIT (A)
4. The CIT
5. The D/R
Guard file (I.T.A. No. 641/JP/2013)
By Order,
AR ITAT Jaipur.