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TMI Blog2021 (11) TMI 380X X X X Extracts X X X X X X X X Extracts X X X X ..... ok Kumar Agarwal, that is, the first party thereto, or, the lessor. This explicit recital and stipulation is a stark direct contrast in black and white, to the illegal surmisical and conjectural speculation of the ld. CIT (E) that there would be any option available to the applicant-Trust-lessee to transfer the land with the construction thereon, back to the lessor, at the termination of the lease. This observation of the ld. CIT (E) is, therefore, but a result of complete non-reading of the material evidence brought on record by the applicant before the ld. CIT (E), in the shape of the concerned Lease Deed. In item no.20 (APB:25), the Questionnaire states please produce the copy of the bank statement/passbook as on date . In response, vide item no.20 (APB:27) of its Reply dated 5.7.2018, the applicant stated that the Bank Statement is enclosed . CIT (E) has failed to take into consideration all the documentary evidences which are patent on his record, as confirmed by the ld. D.R., and has, therefore, arrived at an erroneous conclusion to the effect that no material was produced. CIT (E) has also observed that no evidence of any charitable activity could be showcased by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i T. S. Kapoor, Accountant Member For the Appellant : Shri P. K. Kapoor, C.A. For the Respondent : Smt. Sheela Chopra, CIT (DR) ORDER PER A.D. JAIN, V.P.: These appeals are by the assessee against the separate orders of the ld. CIT (E), dated 20.8.2018 and 16.1.2019, respectively, refusing to grant registration under section 12AA(1)(b)(ii) of the Income Tax Act, 1961 to the applicant-Trust. The applicant has raised the following grounds in ITA No.642/LKW/2018, which is filed against the order of the ld. CIT (E) dated 20.8.2018: 1. The Learned Commissioner of Income Tax (Exemptions), Lucknow [here-in-after referred to as the Ld. CIT] grossly erred on facts and in law in rejecting the grant of Registration under section 12AA of the I. T. Act, 1961 and in allegedly holding that the there is no material on record so as to form even the slightest satisfaction regarding the genuineness of the activities carried out by the Trust in the applicant is not engaged in any charitable activity as such despite the fact that all relevant material was placed before him and thus the order being prejudiced and biased against all settled principles of law may kindly be ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... compliance to the reasons relied upon by him in rejecting the application u/s 12AA and further in not giving due and sufficient important to the documents produced and submissions made before him and thus the order may kindly be set aside and Registration granted u/s 12AA. The applicant has raised the following grounds in ITA No.158/LKW/2019, which is filed against the order of the ld. CIT (E) dated 16.1.2019: 1. The Learned Commissioner of Income Tax (Exemptions), Lucknow [here-in-after referred to as the Ld. CIT] grossly erred on facts and in law in rejecting the grant of Registration under section 1 2AA of the I.T. Act, 1961 and in allegedly holding that there is no material on record so as to form even the slightest satisfaction regarding the genuineness of the activities carried out by the Trust as the applicant is not engaged in any charitable activity as such despite the fact that all relevant material was placed before him and thus the order being prejudiced and biased against all settled principles of law may kindly be ordered to be set aside and Registration granted to the appellant Trust. 2. On the facts and in the peculiar circumstances of the preset case the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly be handed over to one of the members of the applicant-Trust; that the applicant had failed to show cause any books of account or vouchers in support of its claim; that no evidence of any charitable activity could be showcased by the applicant; that the applicant had merely submitted the Trust Deed and no material had been provided to throw light on the activities, if any, carried out by the applicant, as claimed in the Trust Deed; that the applicant had failed to produce any material which could provide an insight into the activities of the applicant; that there was literally no material available on record so as to form even the slightest satisfaction regarding the genuineness of the activities carried out by the applicant; that neither had the applicant provided any ratification by providing the books of account, nor had any vouchers been provided for the various expenses with respect to various activities as claimed to have been carried out; that no bank statement had also been provided for verification of the activities of the Trust and so, the genuineness of the activities could not be verified; that no charitable activity had been carried on by the applicant and it had bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so far as regards the observation of the ld. CIT (E) that the applicant had failed to showcase any books of account or vouchers in support of its claim, the applicant s books of account along with vouchers were produced before the ld. CIT (E), as stated in the applicant s reply dated 5.7.2018; that concerning the objection that no evidence of any charitable activity had been showcased by the applicant, a Note (APB:18)on the activities of the applicant stood filed along with the application for registration; that the activities of the applicant were also enumerated in paragraphs 3 and 24 of the applicant s reply dated 5.7.2018; that the audited accounts of the applicant for the years 2016-17 and 2017-18 also made the activities of the assessee evident; that further supporting evidences with regard to the applicant s activities are also available in the applicant s books of account and vouchers, which were duly produced before the ld. CIT (E); that so much so, that during the proceedings before the ld. CIT (E), he never expressed any doubt, nor raised any query in this regard; that the applicant is a newly formed Trust and as such, the genuineness of its activities is to be examined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ears and in no case, the structure would be transferred to the land owner without getting the fair market value, as is the stipulation in paragraph 3 of the said Registered Lease Deed; that the applicant was asked to e-file form 10A and submit the financial statement for the year ended on 31.3.2018; that this requirement was duly complied with and reply dated 17.8.2018 was dispatched through speed post, on 18.8.2018, for the date fixed, i.e., 20.8.2018; that therefore, evidently, the applicant had made compliance before the ld. CIT (E) by adequately replying to all the twenty four points/questions raised by the ld. CIT (E) in the Questionnaire issued to the applicant; that the order under appeal has been passed in oblivion of the voluminous documentary evidences placed on record, proving the genuineness of the activities carried on by the applicant in accordance with its objects; that therefore, the impugned order is unsustainable in law, requiring to be cancelled; and that the applicant, in these facts and circumstances, be granted registration, as claimed. 4. Per contra, the ld. D.R. has placed strong reliance on the impugned order. It has been contended that as noted by the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd reproduced hereunder: 8. From the above, it is evident that in the light of the terms of paragraph 3 of the Lease Deed, it is wrong to hold, as has been done by the ld. CIT (E) without going into the aforesaid contents of the Lease Deed, which was duly produced before him, that there is any possibility that on the termination of the lease, the applicant will have the option to transfer back the land and the construction existing thereat, to the lessor, or that the leased land along with the construction thereon would ultimately be handed over to one of the members of the applicant-Trust. Rather, as noted above, para no.3 of the Lease Deed is catagoric, when it provides that in case of termination or expiry of the lease, it would be the fair market value of the whole construction, as prevalent at that relevant time, which shall be receivable by the Trust, i.e., the second party to the Trust Deed, that is the lessee, from Dr. Ashok Kumar Agarwal, that is, the first party thereto, or, the lessor. This explicit recital and stipulation is a stark direct contrast in black and white, to the illegal surmisical and conjectural speculation of the ld. CIT (E) that there would be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... portion) on Activities (APB:18) filed by the applicant along with the application for registration. This Note reads as follows: This trust was created on 17.05.2016 through trust deed executed on the same day and is registered in the office of Sub Registrar Bareilly, The main objects of the trust are described out in clause 9 of the Trust Deed. The Trust has been created exclusively for Charitable Purposes for the benefits of general public. Presently the trust has taken upon objects for imparting education, for which purpose building construction work was started during financial year 2016-17 and after completion of some part of it, the school has been started from class Nursery to Sixth. The building construction is still going on. 15. Further, in paragraph 3 of its Reply dated 5.7.2018 (APB:26), the applicant stated as follows: 3) We are carrying on an educational institution at Meeranpur Katra, Distt. Shahjahanpu. At present we are running classes Nursery to class VIII and it is projected that year by year we will extend it to class XII. 16. Then, in paragraph 24 (APB:27) of the said Reply, it was stated that since it is the first year, only building c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duced on record, as discussed in the preceding paragraphs. Therefore, the impugned order is unsustainable in the eye of the law. The same is, accordingly cancelled. Consequently, the ld. CIT (E) is directed to grant registration to the appellant-Trust under section 12A of the Act forthwith. 21. In ITA No.158/LKW/2019, the assessee has raised Grounds identical to the ones raised in ITA No.642/LKW/2018 before us and the application dated 28.2.2018 moved by the assessee before the ld. CIT(E) is, mutatis mutandis, identical to the application dated 30.8.2018, i.e., the application for registration under section 12A(a) of the Act. The findings of the ld. CIT (E), while rejecting the application for registration under section 12A(1) of the Act, vide his order dated 16.1.2019, are also identical to the findings as arrived at by him, vide his order dated 20.8.2018. Since we have considered the issue relating to grant of registration to the applicant under consideration, under section 12A of the Act, while dealing with the Grounds raised in ITA No.642/LKW/2018 and have directed to forthwith grant registration to the assessee under section 12A of the Act, the appeal of the assessee in ITA ..... X X X X Extracts X X X X X X X X Extracts X X X X
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