2017 (9) TMI 1025 - AT - Income Tax

Rejecting application u/s 80G (5) - non charitable activities - non providing proper opportunity before rejecting the application for registration - Held that - We find that the Ld. A.R. has filed an affidavit of Shri Amit Kumar Singhal who is an employee of the Samiti in which he has stated that he was fully acquainted with the facts of the case and produced salary registers and other books of accounts before the Ld. CIT(E) which have been examined by the Ld. CIT(E). It was also submitted that voucher of travel expenses of ₹ 4,970/- incurred for travel to Lucknow on 22.8.2016 was also filed. The Ld. CIT(E) has clearly stated that no books of accounts, salary details and that the society has not provided any details. In view of the totality of the facts and circumstances of the case, the matter is sent back to Ld. CIT(E) for a fresh hearing in accordance with law after affording an opportunity to the assessee. Appeal filed by the assessee society is allowed for statistical purposes.

Issues:
1. Rejection of application for registration/recognition u/s 80G(5)(vi) of the Income Tax Act, 1961 by the Ld. CIT(Exemptions), Lucknow.
2. Grounds raised by the appellant society against the rejection.
3. Analysis of the facts presented by the appellant society.
4. Submissions by the Ld. A.R. and Ld. D.R.
5. Decision of the Appellate Tribunal ITAT Delhi.

Issue 1: Rejection of Application for Registration:
The appeal was against the rejection of the application for registration/recognition u/s 80G(5)(vi) of the Income Tax Act, 1961 by the Ld. CIT(Exemptions), Lucknow. The rejection was based on the society's operation of an educational institute on commercial lines, charging substantial fees without demonstrating charitable activities to the public. The Ld. CIT(E) found the society focused on business rather than charity, lacking evidence of genuine charitable programs and failing to provide necessary details and vouchers. The rejection was supported by a previous ITAT Lucknow bench order.

Issue 2: Grounds Raised by the Appellant Society:
The appellant society raised grounds against the rejection, claiming the findings were inaccurate and not based on facts. They argued that the rejection was invalid as the society did not apply to individuals specified under s.13(3) of the Act. Additionally, they contested the lack of specific fee comparisons and the failure to consider provided salary registers and books of accounts. The society also disputed the reliance on a previous ITAT order without providing a copy to them.

Issue 3: Analysis of the Facts Presented:
The Ld. A.R. presented facts challenging the rejection, including an affidavit and submissions regarding the society's operations and compliance with the law. They highlighted the production of salary registers, accounts, and travel vouchers, emphasizing that the society had not been given a fair opportunity for consideration. The Appellate Tribunal noted these submissions and directed a fresh hearing by the Ld. CIT(E) after providing the society with a proper opportunity.

Issue 4: Submissions by the Ld. A.R. and Ld. D.R.:
The Ld. A.R. submitted arguments contesting the rejection, while the Ld. D.R. relied on the Ld. CIT(E)'s order. The Ld. A.R. provided detailed responses to the reasons for rejection, presenting evidence to support the society's claims and challenging the basis of the rejection.

Issue 5: Decision of the Appellate Tribunal ITAT Delhi:
After hearing the submissions and reviewing the material, the Appellate Tribunal allowed the appeal for statistical purposes. They directed a fresh hearing by the Ld. CIT(E) to provide the society with a fair opportunity for presenting their case in accordance with the law. The society was instructed to appear before the Ld. CIT(E) without seeking adjournment.

This comprehensive analysis covers the rejection, grounds raised by the appellant society, detailed facts, submissions by the parties, and the final decision of the Appellate Tribunal ITAT Delhi.

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