2017 (5) TMI 571 - AT - Income Tax

Tax Tribunal Overturns Registration Refusal, Emphasizes Document Review

Gawar Foundation Versus Commissioner of Income Tax (Exemptions), Chandigarh

The Tribunal allowed the Assessee's appeal, setting aside the refusal of registration under section 12A(1)(aa) of the Income Tax Act, 1961. The decision ... Registration under S. 12A(1)(aa) - non-speaking order for the refusing the registration - Held that:- Details of voluntary contributions received by assesse ₹ 37 lacs; conformation of Gawar Construction Ltd., Gurgaon regarding donation of ₹ 37 lacs during 22.10.2014 to 31.3.2015; details of inter trust donations made in kind to Sh. Krishan Pranami Bal Sewa Ashram, Hisar at ₹ 32,79,951/- as per income and expenditure account; ITR-7 of assessment year 2015-16; Ack. Dated 31.8.2015 of AY 2015-16; ITR-7 of AY 2016-17 and Ack. No dated 2.8.2016 of AY 2016-17. Ld. Counsel of the assessee also certified that the above documents are on record of the Respondent and Income Tax Officer (Exemptions) and no new evidence is adduced. In view of the above, we are of the view that Ld.CIT(E) has not considered the vital and legally tenable documentary evidences tendered, as aforesaid and passed a non-speaking order and contention raised during the proceedings before the Ld. CIT(E), which goes to the root of the matter and are very essential to adjudicate the issue in dispute. Therefore, in the interest of justice, the issue involved in the present appeal requires fresh adjudication by the Ld.CIT(E). Assessee’s Appeal stands allowed for statistical purposes. Issues Involved:Appeal against refusal of registration under section 12A(1)(aa) of the Income Tax Act, 1961.Analysis:Issue 1: Refusal of Registration under Section 12A(1)(aa)The Assessee appealed against the order of the Ld. Commissioner of Income Tax(Exemptions) refusing registration under section 12A(1)(aa) of the Income Tax Act, 1961. The grounds raised by the Assessee challenged the decision as arbitrary, erroneous, and illegal. The Ld. CIT(E) rejected the application based on the Trust Deed provisions, lack of investment in specified modes as required by law, and expenditure on donations to another trust instead of charitable purposes. The Tribunal found that the Ld.CIT(E) did not consider vital documentary evidence and passed a non-speaking order. Consequently, the issue was set aside and restored to the Ld.CIT(E) for fresh adjudication, directing the Assessee to submit all necessary documents and cooperate during the proceedings.Issue 2: Lack of Consideration of Documentary EvidenceThe Tribunal observed that the Ld.CIT(E) did not adequately consider the documentary evidence submitted by the Assessee, leading to a non-speaking order. The Assessee's counsel contended that the documents were vital and legally tenable, essential for adjudicating the matter. As a result, the Tribunal set aside the issue for fresh adjudication by the Ld.CIT(E), emphasizing the importance of considering all documents and providing the Assessee with an opportunity to substantiate the case.Conclusion:The Tribunal allowed the Assessee's appeal for statistical purposes, highlighting the need for a thorough consideration of documentary evidence and proper adjudication by the Ld.CIT(E) in matters concerning registration under section 12A(1)(aa) of the Income Tax Act, 1961.