2018 (9) TMI 1835 - AT - Income Tax

Application for exemption u/s 80G rejected - HELD THAT - As the records demonstrates, on the date of hearing i.e. on 7/12/2017 assessee has filed detailed information before CIT (Exemptions), Lucknow in accordance to the questionnaire issued to it, which is placed in the paper book filed before us We notice that thereafter order was passed by CIT (Exemptions), Lucknow on 13/12/2017. It is evident that within a very short span of time, CIT (Exemptions), Lucknow has passed the order on 13/12/2017 and it is quite possible that entire documents, which were placed before him, might not have been looked into properly. These are matters which require detailed factual verification and CIT (Exemptions), Lucknow has requisite machinery to undertake such an exercise. Looking into the facts and circumstances of the case and in the interest of justice, we set aside the order of CIT (Exemptions), Lucknow and restore the matter back to his file to decide the issue afresh after verifying the facts of the case in accordance with the documents submitted by the assessee - Appeal of the assessee is allowed for statistical purposes.

Summary

Issues:
1. Rejection of application for exemption under section 80G of the Income Tax Act, 1961.

Analysis:

1. The appeal was filed by the assessee challenging the rejection of the application for registration under section 80G(5) of the Income Tax Act, 1961 by the Commissioner of Income-tax (Exemptions), Lucknow. The grounds of appeal highlighted that the rejection was arbitrary, unjust, unfair, and against established legal principles and precedents. The appellant, a charitable company limited by shares, had already obtained registration under section 12A of the Act. The appellant contended that the charitable activities and expenses had been duly considered and accepted during the registration process under section 12A, and thus, the same should not be disregarded during the application for registration under section 80G.

2. The core issue revolved around the rejection of the application for exemption under section 80G by the Commissioner of Income-tax (Exemptions). The appellant had submitted all required documents and information in compliance with the requests made by the authorities. However, the rejection was based on the grounds that the activities of the appellant were not genuine, as claimed, and lacked proper documentation to support the expenses incurred. The appellant argued that despite providing all necessary documentary evidence, the Commissioner summarily rejected the application without due consideration.

3. The Tribunal observed that the Commissioner's order rejecting the application under section 80G was passed shortly after the appellant submitted detailed information in response to the queries raised. The Tribunal noted that there might have been a lack of thorough examination of all documents submitted by the appellant before passing the order. In the interest of justice, the Tribunal set aside the Commissioner's order and remanded the matter back to the Commissioner for a fresh decision. The Commissioner was directed to conduct a detailed verification of the facts, assess the genuineness of the documents provided by the appellant, and provide a reasoned decision after giving the appellant a fair opportunity to be heard.

4. The Tribunal emphasized the importance of a comprehensive review of the documents and activities of the appellant to determine the authenticity of the charitable work and expenses claimed. The Tribunal instructed the Commissioner to address the doubts raised by the Revenue regarding the activities of the appellant-society. The decision to set aside the Commissioner's order was aimed at ensuring a fair and thorough examination of the case, allowing for a proper assessment of the appellant's eligibility for exemption under section 80G of the Income Tax Act, 1961.

5. Ultimately, the Tribunal allowed the appeal of the assessee for statistical purposes, indicating that the decision was made to remand the matter back to the Commissioner for a fresh consideration based on a detailed examination of the facts and documents presented by the appellant.

This detailed analysis highlights the key aspects of the legal judgment, focusing on the rejection of the application for exemption under section 80G of the Income Tax Act, 1961, and the subsequent decision of the Tribunal to remand the matter back to the Commissioner for a fresh determination.