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TMI Blog2022 (5) TMI 506X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee shall produce books of accounts, vouchers and other evidences to substantiate its contentions, and the assessee shall also furnish necessary details/evidences if any other queries which ld. CIT(E) may require assessee to explain. The ld. CIT-DR has also fairly stated that the matter can go back to the file of ld. CIT(E) for denovo consideration of assessee's application. Thus, under these circumstances it will be in the interest of justice and fairness to both the parties that the order dated 18.10.2017 passed by ld. CIT(E) be set aside and matter be restored back to the file of ld. CIT(E) for fresh consideration of the assessee's application for registration/approval u/s. 80G(5) - Appeal of the assessee is allowed for statistical purposes. - ITA No. 320/Alld./2017 - - - Dated:- 22-4-2022 - SHRI. VIJAY PAL RAO , JUDICIAL MEMBER AND SHRI RAMIT KOCHAR , ACCOUNTANT MEMBER For the Appellant : Rahul R. Gabhawala , C. A. For the Respondents : Sunil Kumar Bajpai , CIT - DR ORDER Per Ramit Kochar , Accountant Member This appeal, filed by assessee, being ITA No. 320/Alld/2017, is directed against an order dated 18.10.2017 in Order No. 2017-18/80 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /-, Rs. 2,46,81,088/- and Rs. 2,64,76,860/- respectively, which is an exponential increase in the fee being levied. The ld. CIT(E) also observed that the assessee has failed to implement/invest the same funds towards the execution of any charitable objects. The ld. CIT(E) also observed that the assessee has claimed exaggerated and mostly bogus expenses. The ld. CIT(E) observed that the assessee made huge profits. The ld. CIT(E) observed that the assessee is not working for charity nor it is solely involved in educational activities. The ld. CIT(E) also observed that these expenses could neither be corroborated with books of account nor original vouchers were produced. The ld. CIT(E) also observed that even on being asked, the assessee did not furnish details of salary, the assessee did not provide details of salary. The ld. CIT(E) also observed that huge amount is spent on Advertisement/repairs and maintenance, which is for the purposes to augment the business of education, rather than doing any charity. The ld. CIT(E) observed that in order to verify genuineness of these expenses, the assessee was asked to provide vouchers/documentary evidences to prove that these expenses were ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stration/approval u/s. 80G(5) of the 1961 Act, on 07.04.2017. The ld. CIT(E) issued notice dated 02.09.2017 fixing hearing for 28.09.2017. The ld. Counsel for the assessee submitted that questionnaire was issued by ld. CIT(E) raising as many as 23 queries, in its notice dated 02.09.2017. The assessee sought adjournment on 28.09.2017. The case was fixed for hearing on 11.10.2017 It was submitted that the assessee had filed part reply before the ld. CIT(E) on 11.10.2017, wherein majority of information sought by ld. CIT(E) was furnished. The said notice dated 02.09.2017 along with replies filed are placed on record in file. The case was then fixed for hearing for 18.10.2017. The ld. Counsel for the assessee submitted that on the next date of hearing on 18.10.2017, the assessee/counsel could not appear before ld. CIT(E) and instead of giving one more opportunity, ld. CIT(E) hastened to dismiss/reject application of the assessee for registration/approval u/s. 80G(5) of the 1961 Act. The ld. Counsel for the assessee submitted that its books of accounts and vouchers are all available and it can be produced before ld. CIT(E) for verification, if one more opportunity is accorded to the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al u/s. 80G(5) of the Income Tax Act, 1961, on 07.04.2017 with ld. CIT(E), Lucknow. The ld. CIT(E) was pleased to issue notice vide letter F. No. CIT(Exemp.)/Lko/80G/27A/2017-18/4614 dated 02.09.2017 which was sent to the address provided by the applicant via Speed Post, calling for specific queries regarding assessee's application for registration/approval u/s. 80G(5), for compliance on 28.09.2017. The assessee filed adjournment application on 28.09.2017. The case was re-fixed for fresh hearing on 11.10.2017. The assessee's counsel Shri R B Gabhawala, CA and Shri R B Singh, Society Member, appeared before ld. CIT(E) on 11.10.2017, and filed part reply. The ld. Counsel for the assessee sought adjournment, which was granted by ld. CIT(E), and fresh date of hearing was fixed for 18.10.2017. None appeared before ld. CIT(E) on 18.10.2017 nor any application for adjournment was filed. The ld. CIT(E) observed that the assessee did not produced books of accounts and vouchers for verification. The ld. CIT(E) was pleased to dismiss/reject the application of the assessee for registration/approval u/s. 80G(5), vide orders dated 18.10.2017. The ld. CIT(E) while rejecting application of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the form of photographs/newspaper clippings or other corroborating evidences are brought on record to prove genuineness of its activities. The ld. CIT(E) observed that the assessee has given copies of three lease agreements, which are between assessee and society members. The ld. CIT(E) observed that as per lease deed, the assessee can make construction and after the lease has expired, the assessee can transfer the land and construction to the owners of the land, which as per the assessee grants benefit to the society members, which infringes upon Section 13(1)(c) read with Section 13(3) of the 1961 Act. Thus, in nut-shell the ld. CIT(E) held that the assessee failed to prove that it is undertaking its educational activities for charitable purposes, rather on the other hand it is running its educational activities on commercial grounds, and also that the assessee has not worked towards the performance of objects set out in its Memorandum. Thus, the ld. CIT(E) rejected the application filed by the assessee for grant of registration/approval u/s. 80G(5) of the 1961 Act. Aggrieved, the assessee filed an appeal with tribunal. The ld. counsel for the assessee opened the arguments befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emises/properties taken from society members, but rent paid are very low as compared to market rent and as such no benefit is given to society members, so as to infringe on Section 13(1)(c) read with Section 13(3). The ld. Counsel for the assessee also submitted that the salaries are paid to teachers/staff working with the assessee, and it was submitted that these staff/teachers are covered under ESI/PF, the details are submitted in paper book. The assessee has also filed paper book containing 75 pages (placed on record in file), which also contains written submissions rebutting findings of ld. CIT(E). The ld. Counsel for the assessee relied upon the judgment and order of Hon'ble Supreme Court in the case of Queen's Educational Society v. CIT, reported in (2015) 372 ITR 699(SC).The ld. Counsel for the assessee prayed that since there are factual errors in the order passed by ld. CIT(E), the matter may be restored back to the file of ld. CIT(E) for denovo consideration of the assessee's application for grant of registration/approval u/s. 80G(5), so that the assessee can produce books of accounts, vouchers and other evidence to substantiate its contentions, and if require ..... 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