TMI Blog2022 (4) TMI 1100X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs of ld. CIT(E) are erroneous/perverse, and if one more opportunity is granted, the 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. Appeal of the assessee allowed for statistical purposes. - ITA No. 319/Alld./2017 - - - Dated:- 22-4-2022 - Shri.Vijay Pal Rao, Judicial Member And Shri Ramit Kochar, Accountant Member For the Appellant : ShriRahul R. Gabhawala, C.A. For the Respondent : Shri Sunil Kumar Bajpai, CIT DR ORDER PER SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER: This appeal, filed by assessee, being ITA No. 319/Alld/2017, is directed against an order dated 18.10.2017 in Order No.2017-18/80G/27 passed by learnedCommissioner of Income Tax (Exemption), Lucknow(hereinafter called theCIT(E) ) on an application under section 80G(5)(vi) of the Income-tax Act, 1961(hereinafter called the CIT(E) ) rejecting /dismissing applicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovide details of salary. The ld. CIT(E) also observed that huge amount is spent on repairs and maintenance, and new school running and maintenance expenses, 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 actually incurred for the conduct of its educational activities, but the assessee did not prove the same. The ld. CIT(E) held that the activities of the assessee are not genuine . The ld. CIT(E) also observed that the assessee is earning huge margin of profits of 43.64% in financial year 2015-16 and 25.04% in financial year 2016-17 , which shows that the assessee is only engrossed in non charitable and commercial activities for generating huge profits. The ld. CIT(E) also observed that no corroborating evidences in the form of photographs/newspaper clippings or other corroborating evidences are brought on record to prove genuineness of its activities. The ld. CIT(E) also observed that the assessee has paid Rent of ₹ 10,000/- for financial year 2015-16 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an be produced before ld. CIT(E) for verification , if one more opportunity is accorded to the assessee. The ld. Counsel for the assessee submitted that the assessee is not charging ex-orbitant fee as stated by ld. CIT(E) in its order, rather a monthly fee of around/average of ₹ 2000 per student is charged which is reasonable. It is also submitted that all the surplus generated is expended/invested on the furtherance of educational activities of the assessee, which can be proved/demonstrated byassessee with the records/evidences . The ld. Counsel for the assessee also submitted that Rent of ₹ 10000 is paid for Generator which was taken on hire basis by the assessee, and is not a rent for premises as stated by ld. CIT(E) in its order. The ld. Counsel for the assessee also submitted that the salaries are paid to teachers/staff working with the assessee. The assessee has also filed paper book containing 49 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) 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... large.The ld. CIT(E) noted from Income and Expenditure Account that in financial year 2015-16 and 2016-17, the assessee has charged huge amount of fee , to the tune of ₹ 10,05,600/- and ₹ 26,46,042/- 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 said 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) 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 assesee 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 repairs and maintenance, and new school running and maintenance expenses, 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for registration/approval u/s 80G(5) of the 1961 Act, on 06.04.2017.The ld. CIT(E) issued notice dated 02.09.2017 fixing hearing for 27.09.2017. 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 . It was submitted that the assessee had filed part reply before the assessee, 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 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 , the 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), if one more opportunity is accorded. The ld. Counsel for the assessee submitted that the assessee is not charging ex-orbitant fee as stated by ld. CIT(E) in its order, rather a monthly fee of around/average of &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndings of ld. CIT(E) are erroneous/perverse, and if one more opportunity is granted, the 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) of the 1961 Act. We clarify that we have not commented on the merits of the issue and all the contentions are kept open. Needless to say that ld. CIT(E) will give proper and adequate opportunity of hearing to the assessee in set aside remand proceeding while deciding application of the assessee for grant of registration/approval u/s 80G(5) of the 1961 Act, in accordance with the principle of natural justice an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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