Income Tax Appellate Tribunal - Amritsar
M/S Peoples Welfare Trust, Jammu And ... vs Commissioner Of Income Tax ... on 20 May, 2019
IN THE INCOME TAX APPELLATE TRIBUNAL
AMRITSAR BENCH, AMRITSAR
Before Sh. N. S. Saini, Accountant Member
And
Sh. N. K. Choudhry, Judicial Member
ITA No. 168/Asr./2018 : Asstt. Year : 2018-19
M/s Peoples Welfare Trust, Vs Commissioner of Income
Darul Huda Complex, Opposite Tax(Exemptions),
Distt. Hospital, Pulwama, Chandigarh
Jammu & Kashmir-192301
(APPELLANT) (RESPONDENT)
PAN No. AADTP3456E
Assessee by : Sh. Padam Bahl, CA
Revenue by : Smt. Parwinder Kaur, DR
Date of Hearing :15.05.2019 Date of Pronouncement : 20.05.2019
ORDER
Per N. S. Saini, Accountant Member:
This is an appeal filed by the assessee against the order of Commissioner of Income Tax(Exemptions), Chandigarh dated 29.01.2018.
2. The assessee has raised following grounds of appeal:
"1. That the Commissioner of Income Tax (Exemption), Chandigarh has grossly erred in rejecting the application for registration filed by the assessee u/s 12A of the Income Tax Act, 1961.
2. That the learned Commissioner of Income Tax (Exemption) Chandigarh has rejected the application on the ground that Para (V)(e) of the Trust Deed provided that in the event of dissolution of the Trust, the Trust property shall be donated to a reputed Deeni Party (Religious Group) ignoring the fact that this clause had been rectified by 2 ITA No. 168/Asr./2018 Peoples Welfare Trust Supplementary Deed dated 22.01.2018 duly registered & filed before him.
3. The learned Commissioner of Income Tax (Exemption), Chandigarh has also held that since no expenditure was incurred on the aims and the object of Trust, the genuineness of the activity if the Trust could not be ascertained. The trust has incurred a capital expenditure of Rs. 83,39,127/- on purchase of machinery till 13 t h January, 2018, in addition to the revenue expenditure of Rs. 258,463.72. The relevant ledgers alongwith the bills were duly produced before and verified by Ld. ITO Exemptions Jammu.
4. The learned Commissioner of Income Tax (Exemption), Chandigarh has also held that the queries regarding corpus donations and advance for machinery remained unanswered. In respect of corpus donations, the Assessee has received written directions from Donors that the same be treated as corpus donations to be utilized for the purchase of machinery for the polyclinic. The original written directions duly signed by the donors were produced before the Ld. ITO Exemptions Jammu. Further the ledgers of parties to whom advance has been paid along with the bills in original were also produced before Ld. ITO Exemptions Jammu.
5. That the order of the Commissioner of Income Tax (Exemption), Chandigarh denying the registration u/s 12A may kindly be set-aside."
3. The facts of the case are that the assessee filed application in Form No. 10A on 05.07.2017 seeking registration u/s 12AA of the Income Tax Act, 1961.
4. The Commissioner of Income Tax(Exemptions) observed that a report was called from the jurisdictional Assessing Officer regarding the genuineness of the applicant trust and its activities. The assessee was allowed opportunity to produce 3 ITA No. 168/Asr./2018 Peoples Welfare Trust the original copy of trust deed to the ITO(Exemptions), Jammu for convenience. As per the report received from ITO(E), Jammu, the date of incorporation of the trust was no t mentioned in the original return deed. He further observed that from the photocopy of the trust deed filed with him, it is observed that date of incorporation was endorsed by pen in handwritten form. He also noted that the dissolution clause of the applicant trust was restrictive in nature. He observed that para (V)(c) of the trust deed provides that in the event of defunction of the trust, the trust property with all its establishments shall be donated to a reputed religious group working in the J&K State. He further observed that the assessee conceded that the trust had not started its activity but was in the process of establishing poly-clinic. He observed that the applicant trust supplied a copy of supplementary trust deed dated 22.01.2018 amending the dissolution clause. The supplementary trust deed is not registered from the office of registrar of trust. The applicant trust did not submit any evidence in support of the permissions granted for opening a poly-clinic. The query regarding corpus donation and transactions in respect of advance for machinery remained un- replied. He further observed that the heads of expenses as shown in the income and expenditure account for the period 04.04.2017 to 31.07.2017 include only legal expenses, bank charges and travelling & conveyance. No expenditure supporting the aims & objects of the applicant trust as claimed. Therefore, he rejected the application for registration filed by the assessee.
4 ITA No. 168/Asr./2018Peoples Welfare Trust
5. Before us, the argument of the Authorized Representative of the assessee is that the unregistered rectification deed dated 22.01.2018 filed with the Commissioner of Income Tax(Exemptions) stands registered with sub-registrar on 22.02.2018 i.e. after the order of Commissioner of Income Tax. The corpus donation letters filed with the Assessing Officer and Commissioner of Income Tax during the proceedings. Advance for machinery details were filed with the Assessing Officer and Commissioner of Income Tax during proceedings. Bank statements were filed with the Assessing Officer and Commissioner of income Tax. Permission for Polyclinic has been granted now.
6. In the above facts and circumstances of the case, it was prayed that the matter should be restore back to the file of the Commissioner of Income Tax(Exemptions) to reconsider for grant of registration to the assessee trust afresh in light of these further evidences available with the assessee.
7. The Departmental Representative had no objection to the submission of the Authorized Representative of the assessee.
8. In the above facts and circumstances of the case, we are of the considered view that in order to render substantial justice to the assessee, the matter should be remand back to the file of Commissioner of Income Tax(Exemptions) for considering the application of the assessee for grant of registration u/s 12AA of the Act afresh. We, therefore, set aside the order of the Commissioner of Income Tax(Exemptions) and restore the matter back to his file to re- adjudicate the issue of grant registration u/s 12AA of the Act 5 ITA No. 168/Asr./2018 Peoples Welfare Trust afresh after allowing reasonable and proper opportunity of hearing to the assessee and after considering the registered rectification deed dated 22.02.2018, corpus donation letters and details of advance for machinery permission of establishing polyclinic and bank statement of the assessee. The assessee is also directed to file the above stated documents with the Commissioner of Income Tax(Exemptions) as and when called upon to do so.
9. In the result, the appeal of the assessee is allowed for statistical purposes.
( O rd e r P r on ou n c ed i n t h e C ou rt on 2 0 t h d ay of Ma y 2 0 1 9 at A m ri t sa r) Sd/- Sd/-
(N. K. Choudhry) (N. S. Saini)
Judicial Member Accountant Member
Dated: 20/05/2019
*Subodh*
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
ASSISTANT REGISTRAR