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TMI Blog2024 (5) TMI 1077X X X X Extracts X X X X X X X X Extracts X X X X ..... ce, we are hereby condoning the delay. Non-granting of registration u/s 12A and 80G - CIT observed that though the assessee is an educational trust, but it is collecting substantial amounts from it s students towards meal and hostel fees, registration fees, admission fees etc, thus the assessee is primarily running a profitable business and not doing any charitable activity - HELD THAT:- On going through the facts of the instant case, considering the model of education, being residential boarding and hostel facility, followed by the assessee / applicant trust, the fact that on identical set of facts the assessee / applicant trust has also been granted provisional registration from A.Y. 2022-23 to A.Y. 2024-25, we are of the considered view that it is a fit case where the matter should be restored to the file of Ld. CIT for de-novo consideration of assessee s claim for registration u/s 12A/80G of the Act, after giving due opportunity of hearing to the assessee. Accordingly, in the interest of justice, looking into the facts of the instant case, we are hereby restoring the matter to the file of Ld. CIT for de-novo consideration and to pass appropriate orders, in accordance with law, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee. Before us, the Counsel for the assessee submitted that the first time the assessee / applicant trust realized that the registration under Section 12AA of the Act had been denied to the assessee was when the assessment for A.Y. 2013-14 was concluded and the assessee was in receipt of demand notice from the Income Tax Department. Further, the Counsel for the assessee submitted that on identical set of facts, the assessee / applicant trust had also been granted provisional registration for A.Y. 2022-23 to A.Y. 2024-25. In the Affidavit filed by the assessee, it was submitted that the assessee is operating in a remote village and has only a part-time accountant, who works for the assessee on job to job case basis. The accountant visits the premises of the assessee only once in a week for about three hours. In the Affidavit, the accountant of the assessee submitted that in the year 2013, in the month of May and June, an order under Section 12AA of the Act and order under Section 80G of the Act was received from the office of Commissioner of Income Tax, Vadodara, by the accountant. However, the accountant submitted that he forgot to inform the assessee as well as the audit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re pitted against each other, the cause of substantial justice deserves to be preferred. Accordingly, we are of the considered view that looking into the instant facts there is no mala fide intention in filing appeal against the order denying grant of registration under Section 12AA of the Act r.w.s. 80G of the Act. Accordingly, in the interest of justice, we are hereby condoning the delay in filing of the present appeal against under denying grant of registration under Section 12AA of the Act and under Section 80G of the Act. 7. In the result, application for grant of condonation of delay in respect of present appeal is hereby being condoned. ITA No. 2311/Ahd/2017 8. The assessee has raised the following grounds of appeal:- (1) That on facts, and in law, the learned CIT (Exemptions) Ahmedabad has grievously erred in not granting sufficient and reasonable opportunity to the appellant. (2) That on facts, and in law, the learned CIT I, Baroda has grievously erred in rejecting the application for registration u/s. 12A of the Act. (3) That on facts, and in law, the registration ought to have been granted u/s 12AA of the Act as prayed for. (4) The appellant craves leave to add, alter, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... approved education classes from standard 4th to standard 10th and for that purpose it is running a non-subsidized Government approved education and residential school and with keeping that object in mind, the assessee trust only admits residential students i.e. the students who will live / stay within the residential campus during their educational years. The Counsel for the assessee submitted that the fees per students are inclusive of educational fees / lodging and boarding expenses, medical expenses, annual educational and tour expenses etc. and looking into the quantum of expenses, the average price charged from per students is only Rs. 1,700/- to Rs. 2,000/- per month i.e. Rs. 66.66 per day, which is quite nominal considering the fact that the assessee is running a residential educational institution with lodging and boarding facilities, aimed at providing and uplifting the status of rural people. The Counsel for the assessee further submitted that the assessee / applicant trust is following a cash system of accounting (and not mercantile system of accounting) and the trust accounts for only those fees which are received during the financial year, irrespective of whether it p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing residential boarding and hostel facility, followed by the assessee / applicant trust, the fact that on identical set of facts the assessee / applicant trust has also been granted provisional registration from A.Y. 2022-23 to A.Y. 2024-25, we are of the considered view that it is a fit case where the matter should be restored to the file of Ld. CIT for de-novo consideration of assessee s claim for registration under Section 12A of the Act, after giving due opportunity of hearing to the assessee. Accordingly, in the interest of justice, looking into the facts of the instant case, we are hereby restoring the matter to the file of Ld. CIT for de-novo consideration and to pass appropriate orders, in accordance with law, after giving due opportunity of hearing to the assessee to present it s case on merits. 15. In the result, the appeal of the assessee is allowed for statistical purposes. Now we shall deal with ITA No. 2310/Ahd/2017 16. The assessee has raised the following grounds of appeal:- (1) That on facts, and in law, the learned CIT(Exemptions) Ahmedabad has grievously erred in not granting sufficient and reasonable opportunity to the appellant. (2) That on facts, and in law, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred in confirming the disallowance of Rs. 33,84,990/- claimed u/s 11 of the Act as application of income of the appellant Trust. 3. That on facts, and in law, the deduction ought to have been allowed as prayed for. 4. The appellant craves leave to add, alter, amend any ground of appeal. 22. The present appeal arises out of additions made by the Assessing Officer (and confirmed by Ld. CIT(A)) resulting from disallowance of exemption under Section 11 of the Act. The reasons for the additions and denial of exemption under Section 11 of the Act were that the assessee was unable to enter the details of registration granted to the assessee under Section 12A/12AA of the Act. 23. Since we have already restored the issue regarding grant of registration under Section 12A of the Act to the file of CIT for de-novo consideration, accordingly, the present issue also is directed being restored to the file of Assessing Officer with a direction to pass appropriate orders in light of disposal of application of the assessee for grant of registration under Section 12A of the Act, in the set-aside proceedings. 24. In the result, the appeal of the assessee is allowed for statistical purposes. 25. In t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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