Income Tax Appellate Tribunal - Amritsar
Hanuman Sewa Samiti, Bathinda vs Commissioner Of Income Tax ... on 21 December, 2016
IN THE INCOME TAX APPELLATE TRIBUNAL
AMRITSAR BENCH; AMRITSAR
BEFORE SH.T.S. KAPOOR, ACCOUNTANT MEMBER AND
SH.N.K.CHOUDHRY, JUDICIAL MEMBER
I.T.A. No. 322(Asr)/2015
Assessment Year: ..........
Sri Hanuman Sewa Samity, Vs. CIT(Exemption)
#30151/1 Gurukul Road, Chandigarh.
Paras Ram Nagar, Bathinda.
PAN:AALAS2656L
(Appellant) (Respondent)
Appellant by: Sh. P.N. Arora (Adv.)
Respondent by: Sh. Rahul Dhawan (DR)
Date of hearing: 25.10.2016
Date of pronouncement: 21.12.2016
ORDER
PER N. K. CHOUDHRY (JM):
The instant appeal has been filed by the assessee feeling aggrieved against the order dated 27th April, 2015 passed by the ld. CIT(Exemption) while refusing Registration u/s. 12AA of the Act of the Income Tax Act.
2. The assessee has raised the following grounds of appeal.
"(i) That the learned Commissioner of Income Tax (Exemptions), Chandigarh erred on facts and law in passing order u/s 12AA rejecting the application for registration without giving proper opportunity of hearing to the assessee because the application for registration was filed onand the first notice for hearing fixed for 24.03.2015 was issued by Deputy Director (Systems) and by the ITO (Exemptions) on 24/30.03.2015. The order refusing the grant of registration has been passed on 27.04.2015 despite the fact that the information as required alongwith application was duly filed.
(ii) That the Ld. Commissioner of Income Tax (Exemptions), Chandigarh erred on facts and law in rejecting the application of registration u/s 12A by recording the finding that the hearing of the case was fixed for 24.03/30.03.2015 but nobody attended on the date of hearing. But this notice did not mention that any information was required from the assessee. The fact is that the case was fixed for hearing by the Deputy Director (Systems) Chandigarh and the ITO (Exemptions) also issued letter dated 24.03/30.03.2015 to file the information and the same was filed on 27.04.2015. No date of compliance was mentioned in the letter issued by the ITO 2 ITA No.322(Asr)/2015 (Exemptions). Thus the assessee was being asked by two different authorities at Amritsar and Chandigarh to appear before them which resulted in confusion and the reason for non attendance before the Deputy Director (Systems).
(iii.) That the Ld. Commissioner of Income Tax (Exemptions), Chandigarh erred on facts and law in rejecting the application of registration u/s 12A by recording the finding that the application for registration u/s 12AA has been rejected because according to the CIT (Exemptions) the ITO (Exemptions) has not recommended the grant of registration which proves that the CIT (Exemptions) has not satisfied himself before refusing registration about the objects of the institutions and genuineness of its activities and the satisfaction has been borrowed from ITO (Exemptions). Section 12AA(1)(b) provides that the CIT shall pass the order in writing refusing to register the institution if he is not satisfied about the objects of the institution and genuineness of its activities but in the present case the satisfaction has been borrowed by the CIT from the ITO which is against the provisions of law.
(iv) That the Ld. Commissioner of Income Tax (Exemptions), Chandigarh erred on facts and law in rejecting the application of registration u/s 12A by recording the finding that there is no dissolution clause in the memorandum of trust. The absence of dissolution clause in the memorandum of the institution is only a defect which could be cured rectified for which no opportunity was provided to the assessee.
Hence the order passed u/s 12AA refusing registration dated 27.04.2015 is liable to be quashed and the CIT may kindly be directed to allow registration u/s 12A."
3. The brief facts of the case are that the assessee has filed an application u/s 12A of the Act for registration of the society under the Income Tax Act. The assessee has also filed Memorandum/Article of Association and audit reports. On consideration of the application a report of activities of the trust was also called for from the ITO (Exemption), Amritsar, who did not recommend the case of the assessee for registration u/s 12AA of the Act. The assessee also did not attend the date of hearing i.e., 24th March, 2015 in the office of the ld. CIT(Exemption) and therefore, having no option, the ld. CIT(Exemption) 3 ITA No.322(Asr)/2015 proceeded in the matter in the absence of the assessee on the basis of information available on the records only. The ld. CIT(A) denied the registration u/s 12A of the Act to the assessee trust on the ground that no details of charity activity available on record for the Asst. Year: 2012- 13, 2013-14 and 2014-15 which can prove that any charitable activity u/s 2(15) has been carried out by the trust during the last three years. Even otherwise, the ld. CIT(A) do not find any dissolution clause in the memorandum of the trust and declining the registration also relied upon the report of the ITO (Exemption), Amritsar. Crux of the order passed by the ld. CIT(Exemption) is reproduced herein below for the sake of convenience and brevity.
ORDER U/S 12AA OF THE I.T.ACT, 1961 "An application u/s 12A was filed by the applicant on 29.10.2014 before the Commissioner of Income Tax, Bathinda which was transferred to this office due to change in jurisdiction.
2. In order to accord an opportunity of personal hearing, the date was fixed for 24.03.2015 in this office. None attended on the said date and at the appointed time. It appears that the assessee is no more interested to pursue the matter. I have thus been left with no option but to proceed in the matter on the basis, of information available on records.
3. There is no activity list available on the record for-AY-2012- 13, 2013-14 and 2014-15 which can prove that any charitable activity u/s 2(15) has been carried out by the trust during the last three years. A report on activities of the trust was also called for from the ITO(Exemptions), Amritsar who in turn has also not recommended the case for grant of registration u/s 12 AA of the I. T. Act, 1961.
4. There is no dissolution clause in the memorandum of the trust. After going through all the facts cited above, I am of the firm view that the trust is not involved in any charitable activity, the registration u/s 12AA of the Act is thus denied to the trust." 4 ITA No.322(Asr)/2015
4. Feeling aggrieved by the said order passed by the ld. CIT(Exemption), the assessee preferred the instant appeal on the grounds mentioned in para No.2 of the appeal. The assessee also preferred to file written submissions and during the course of hearing submitted that the society was created on 31.01.2007 but started its activities relating to Medical Assistant, Charity & other Public Welfare activities during the year 2014-
15. Initially society was started by some members & by very less number of volunteers, but with the passage of time number of volunteers joining with society increased in number of time. That donation of society also starts increasing and lots of people started joining the society during this period. Hence, increasing in donation of society leads to filling application u/s 12AA of the Income Tax Act, 1961. In view of above submissions it is humbly requested to your good self to kindly condone the delay in submitting application.
Copies of ITR-V for the A.Y. 2013-14 & A.Y. 2014-15 are attached. Detail of members having PAN card with their respective designation in society is mentioned below:-
Subhash Chand s/o Sh. Hari Chand Vice President AJWPC6882B Sohan Lai s/o Banarsi Dass President ABJPL2242C Sukhwinder Singh s/o Sh. Kishan Singh Joint See CNWPS9383R Tarsem Kumar s/o Sh. Madan Lal Member APPPK8468L Raman Kumar s/o Sh. Nand Kishore Member AHFPK4769E Detail of all movable & immovable fixed assets is part of balance sheet. There are no other movable or immovable assets apart from assets incorporate in balance sheet.5 ITA No.322(Asr)/2015
Society is having its office in the premises Sh. Sohan Maheshwary. Just one room is used by society as its office & NOC from landlord is attached.
Complete copy of relevant Audit Report for the F.Y. 2013-14 is attached.
That major portion of donation is received by society collected by its volunteers from people around by going door to door campaign. That member's collection relates to such donation & detail of same is attached.
Society had given ambulance services to poor & needy people, had given donation to poor girls for marriage, medical aid to needed people, taken poor people to holy pilgrims, provided dead body fridge, water in summer at public places, shoe racks in holy functions, cremated unclaimed dead bodies and also provided blankets to poor in winter. Documentary evidence of the activities with photographs are provided for your kind verification.
It was also argued by the ld. AR that at the time of registration u/s 12A of the Act, the concerned authority has to take under consideration the objects of the trust or institution and the genuineness of its activity and to satisfy himself about the genuineness of the activity trust or institution, call for such documents or information from the trust or institution and may also made such enquiry as he thinks necessary in this behalf. From the order passed by the ld. CIT(Exemption) it reflects that the CIT(Exemption) has passed the order on the borrowed 6 ITA No.322(Asr)/2015 satisfaction of the ITO(Exemption) and even otherwise, Sec.14 of the Society Registration Act, speaks about the consequences of the dissolution u/s. 14. Further, it was submitted by the ld. AR that dissolution clause is not mandatory and its curable defects only which could have been cured after registration itself.
5. On the other hand, ld. DR opposed submission of the ld. AR and submitted that the ld. CIT(Exemption) had given proper opportunity to the assessee society before rejecting the application and assessee failed to appear and to participate in the proceedings before ld. CIT(Exemption) without any reason and even otherwise from the letter dated 12.02.2015 issued by Income Tax Officer(Exemption), it clearly reflects that the assessee was supposed to appear on 12.02.2015 at Amritsar and from notice dated 12.03.2015, the assessee was supposed to appear at Chandigarh on 24th March, 2015 and there is no clash of dates. Even otherwise it is an undisputed fact there is no dissolution clause is incorporated in the memorandum of association. It was further submitted that even till today, the assessee has failed to rectify its mistake by adding the dissolution clause in the Memorandum/Article of Association and failed to file any document by which it can be proved that any social, religious, or educational activities have been carried out by the assessee. Therefore, the ld. CIT(Exemption) was correct in declining the registration to the assessee society. 7 ITA No.322(Asr)/2015
6. We have gone through the facts and circumstances of the case also considered the document as well as rival submissions of the parties. It is an undisputed fact and not denied by the ld. AR that there is no dissolution clause in the Memorandum /Article of Association. From the documents, it is not clarified as what activities have been carried out by the assessee society and even otherwise no plausible reason has been given for non appearance before the ld. CIT(Exemption) and in the absence of proper documents, the ld. CIT(Exemption) was constrained to decide the application on the basis of material available in the file as well as report of the ITO(Exemption). However, considering the well settled law of the higher Courts as the Revenue Authorities are supposed to consider the objects and genuineness of the activities of the trust while deciding the application u/s 12AA of the Act. As in the instant case, the ld. CIT(Exemption) tried to satisfy himself about the genuineness of the activities of the trust and also made enquiries, however, in the absence of the assessee failed to do so and passed the order ex parte.
Although, the assessee has failed to give any plausible reason for non appearance before the ld. CIT(Exemption), however, considering the facts and circumstances of the case and objects of the trust, we feel it appropriate to remand back the case to the file of ld. CIT(Exemption) to decide afresh after affording a reasonable opportunity of being heard to the parties concern. The assessee society is directed to amend the Memorandum/Article of Association and to file relevant documents qua activities carried out by the society for the last three years in order to 8 ITA No.322(Asr)/2015 satisfy the genuineness of activities and also to co-operate with the proceedings.
In the above directions and observations, the case is remanded back to file of ld. CIT(Exemption) for deciding afresh.
7. In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 21.12.2016.
Sd/- Sd/-
(T. S. KAPOOR) (N.K.CHOUDHRY)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated:21.12.2016.
/PK/Ps.
Copy of the order forwarded to:
(1) The Assessee:
(2) The
(3) The CIT(A),
(4) The CIT,
(5) The SR DR, I.T.A.T.,
True copy
By Order