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2021 (11) TMI 380 - AT - Income TaxExemption u/s 11 - grant of registration u/s12AA(1)(b)(ii) denied - piece of land had been leased out to the applicant-Trust by a member of the Trust; that the said arrangement attracted the provisions of section 13(1)(c) read with 13(3) - HELD THAT:- As 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. 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 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 the applicant. This observation of the ld. CIT (E) also gets negated in view of, firstly, the Note (relevant portion) on Activities (APB:18) filed by the applicant along with the application for registration. Activities of the applicant are also evident from the applicant’s audited accounts for the years ended in 2016-17 and 2017-18 - It is also remarkable, as contended on behalf of the applicant, that during the proceedings before the ld. CIT (E), he did not show any dissatisfaction, nor expressed any doubt, nor raised any query to the applicant concerning the charitable nature of the objects of the applicant and the genuineness of its activities, and it was only in the order under appeal that such objection was raised unilaterally for the first time, to the prejudice of the applicant. CIT (E) has also erred, in observing that no material but for the Trust Deed was filed. CIT (E) has also gone wrong in holding that though the applicant’s Memorandum contains several objects, the applicant has failed to corroborate them with satisfactory evidences. This, despite the fact that none of the voluminous documentary evidences, as discussed hereinabove, filed by the applicant, stand controverted by the ld. CIT (E). So much so, though a perusal of the ld. CIT (E)’s record shows these evidences to actually have been filed before him, as fairly confirmed before us by the ld. CIT (DR), the ld. CIT (E) has illegally ignored them and has gone on to observe that no evidence was filed. It is thus clearly a case of non-reading of material documentary evidence brought on record, rendering the Order under challenge thus unsustainable in the eye of the law. We are satisfied that the applicant- Trust is entitled to registration, as claimed. Finding the grievance of the applicant to be justified, the same is accepted. The order under appeal is held to be a result of complete misreading and non-reading of material documentary evidence produced 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. - Decided in favour of assessee.
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