Application under sec 12AA/80G cannot be rejected without giving opportunity for submission of all documents

IN THE INCOME TAX APPELLATE TRIBUNAL

DELHI BENCH “G” New Delhi

BEFORE SHRI R.P. TOLANI AND SHRI SHAMIM YAHYA

ITA Nos. 4641 & 4642/Del/11

U/s 12AA(1)(b) & 80-G of the I.T. Act.

Saraswati Devi Educational &

Charitable Trust, 34, Anaj Mandi, Rohtak.

PAN/ GIR No.AAKTS 2846L

(Appellant)

Vs.

Commissioner of Income-tax,

Sonepat.

 (Respondent)

Appellant by: Shri R.P. Basia CA

Assessee by: Shri S.K. Upadhyaya Sr. DR

O R D E R

PER R.P. TOLANI, J.M::

These are two appeals by the assessee assailing refusal of registration u/s 12AA and 80-G of the Income-tax Act. Respective grounds raised in these appeals are as under:

ITA 4641/Del/11:

“1. That the CIT has wrongly dismissed the application for Registration u/s 12AA of the Income-tax Act, 1961, without giving appropriate opportunity and ignoring all merits of the case.

2. That the ld. CIT has also wrongly concluded that the aims & objects of the trust are not of charitable nature.

3. That the ld. CIT has also wrongly concluded that the activities of the trust cannot be put to the test of genuineness.

4. That the ld. CIT had wrongly ignored the fact that the appellant trust exists solely for educational and charitable purpose and not for the purpose of profit as evident from its aims and objects.

5. That the ld. CIT has passed the order in haste and is against the facts, law and provisions of the Income Tax Act, 1961 and Rules made there under.

6. The appellant trust craves to add, modify, delete, and withdraw any further ground on or before the date of hearing.

ITA 4642/Del/11:

1. That the CIT has wrongly dismissed the application for Registration u/s 80G of the Income-tax Act, 1961, without giving appropriate opportunity and ignoring all merits of the case.

2. That the ld. CIT has also wrongly concluded that the aims & objects of the trust are not of charitable nature, making it a ground of rejection of registration u/s 12A and thereby rejecting approval u/s 80G.

3. That the ld. CIT had wrongly ignored the fact that the appellant trust exists solely for educational and charitable purpose and not for the purpose of profit as evident from its aims and objects.

4. That the ld. CIT has passed the order in haste and is against the facts, law and provisions of the Income Tax Act, 1961 and Rules made there under.

5. The appellant trust craves to add, modify, delete, and withdraw any further ground on or before the date of hearing.

2. Brief facts are: The assessee moved applications u/s 12A(1)(aa) and U/s 80G(5)(vi) of the Income Tax Act. The applications were accompanied by a copy of trust deed dated 27-12-2010 to the CIT, Rohtak on 9-3-2011. CIT called for report from the AO concerned as to whether the applicant fulfilled the conditions required for grant of registration u/s 12AA and U/s 80G. Assessee submitted the required documents, audited accounts along with copies. JCIT vide letter F.No. 1419 dated 19-7-2011, however, did not recommend the case for registration. Thereafter, CIT required the appellant to submit information, as mentioned in para 3 of the order. According to CIT the applicant could not furnish most of the informations/ documents to substantiate the charitableness of the objects and genuineness of the activities of the applicant society, however, the specific non compliance is not mentioned. CIT, for want of information, rejected the applications of the applicant for registration u/s 12AA as well as u/s 80G of the I.T. Act. Aggrieved, the appellant is before us in these appeals.

3. Learned counsel for the assessee at the out set submitted that all documents, called for, were duly furnished along with audited accounts, before the CIT. The CIT erroneously held that information was not filed and without providing opportunity of being heard to the assessee and without considering the material furnished, rejected applications of the appellant for registration u/s 12AA and 80G of the I.T. Act. It is pleaded that Sh. B.B. Mittal, the counsel of the applicant trust appeared before the Ld. CIT on 19- 8-2011 and all requisite information/ explanations vis-à-vis the books of accounts of the trust, the activities of the trust for the limited period of existence, documents in support of the above, details of the officers of the trust, the clarifications regarding object of the trust etc. were duly submitted/ produced before the Ld. CIT.

3.1. Ld. counsel submitted that trust being charitable in nature, in the interest of natural justice, the registration may be granted or the matter may be remanded, restored back to the file of DIT to decide the issue of registration u/s 12AA and u/s 80G on merits, after perusing the information

and affording reasonable opportunity of being heard to the appellant.

4. Ld. D.R. is heard.

5. We have heard rival contentions and gone through the relevant material available on record. The CIT has not indicated the nature of information not furnished and without considering the documents filed by the applicant along with applications for registration u/s 12AA/80G has rejected assessee’s claim solely on the ground that applicant could not file most of the informations call for. We find force in the argument of ld. counsel that CIT failed to consider the claim of the applicant on merit, without considering the record and affording opportunity of being heard to the applicant on alleged non compliance. In the interest of natural justice we deem it fit and proper to restore the issues in question i.e. registration u/s 12AA/80G, back to the file of CIT for decision afresh on merit in accordance with law, after affording reasonable opportunity of being heard to the appellant. We order accordingly.

6. In the result, both the appeals filed by the appellant are allowed for statistical purposes only.

Order pronounced in open court on 11-6-2012.

                                                         Sd/-                                  Sd/-

                                           (SHAMIM YAHYA)            (R.P. TOLANI)

                                     ACCOUNTANT MEMBER   JUDICIAL MEMBER

Dated: 11-6-2012.

MP

Copy to:

1. Assessee

2. AO

3. CIT

4. CIT (A)

5. DR