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31-05-2019, People Cause Foundation, Section 80G(5)(iv), HIGH COURT OF ALLAHABAD
1. Heard Sri Anesh Kumar Agarwal, learned counsel for the appellant as well as Sri Manish Mishra, learned counsel for the respond nt.
2. This appeal under Section 260(A) of the Income Tax Act, 1961 (hereinafter referred to as "the Act, 1961") has been filed challenging the order dated 28.09.2018, passed by the Income Tax Appellate Tribunal (hereinafter referred to as "the ITAT"), in Income Tax Appeal No. 60/LKW/2018 - People Cause Foundation, Lucknow Vs. CIT (Exemptions), Lucknow, so far as it relates to the remand of the matter to the Commissioner of Income Tax (Exemptions), Lucknow.
3. The instant appeal was admitted by this Court by means of order dated 10/01/2019, on the following substantial questions of law which are being reproduced herein below:-
"(I) Whether the respondent no.1, i.e. the Ld. ITAT Lucknow could remand the instant matter to the respondent no.2, i.e., the CIT (Exemp) Lucknow when all the issues involved in the matter were well adjudicated by the CIT (Exemp) Lucknow and neither any issue was remaining to be adjudicated nor was framed by the Ld.ITAT Lucknow any new issue directing it to be decided by the CIT (Exemp) Lucknow in the matter ?
(II) Whether the Ld.ITAT Lucknow could remand the matter when the entire matter/evidences were available before it and the Ld.ITAT Lucknow was under a legal obligation to decide the instant matter itself on merits ?
(III) Whether the matter should be remanded simply on the ground that the lower court has decided any material efficiently within a record period of time without raising any doubts about the veracity and legality of that order ?" This will be treated as an additional substantial question of law no.(III) to the appeal."
4. Learned counsel for the appellant submitted that appellant is a Company incorporated under Section 8 of the Companies Act, 2013 on 12/02/2016 and had obtained a certificate under Section 12-A Of the Act, 1961 from the office of Commissioner of Income Tax (Exemption), Lucknow, and had also applied for the certificate under Section 80G of the Act, 1961 on 20/06/2017 on prescribed Form No.10G with all the requisite information. The said application was dismissed, against which the appellant preferred an appeal on 23/01/2018 before the ITAT, Lucknow, decided by order dated 28/09/2018, which has been impugned in the instant appeal.
5. The ITAT in its order dated 28/09/2018 has remitted the matter back before the Commissioner of Income Tax (Exemption) to be decided afresh after verifying the facts of the case in accordance with the documents submitted by the assessee and specifically to determine the genuineness of those documents and, to come out with a speaking order.
6. The Commissioner of Income Tax (Exemption) in his order dated 13/12/2017, while rejecting the application of the assessee, took into account the fact that the applicant has deliberately not submitted any details regarding the identity of the donors, and concluded that this is a malafide attempt on part of the applicant to introduce the unaccounted money to the person, as donation. He further observed that the applicant, to verify the genuineness of the expenses did not produce the vouchers with respect to expenses incurred, and therefore the Commissioner of Income Tax (Exemption) was unable to come to a finding as to whether the activities of he assessee are charitable, and on the basis of the evidence filed it was also observed that the applicant disclaim to be involved in activities which apparently are for profit-making on commercial lines and away from the term "charitable purpose", and therefore, rejected the application of the applicant under Section 80G(5) of the Act, 1961.
7. With regard to the questions of law framed by this Court, from a perusal of record and most specifically the order of the Commissioner of Income Tax Exemption dated 13/12/2017, would indicate that the application for grant of exemption was preferred on 20/06/2017, and on examination of various documents filed along with the application, the Commissioner of Income Tax (Exemptions) came to the conclusion that the applicant has not carried out the acts of charity during the said period, and has deliberately not submitted any details thereof in order to deliberately obscure the real identity of the donors, and therefore they had failed to verify the genuineness of the expenses as claimed in income and expenditure account. Not a single activity can be seen as irrelevant to the objects declared by the applicant, and also the fact that material available on record does not suggest any initiative on part of the applicant as it is not possible to verify the claim of the applicant as he has never been able to produce the books of account nor expenses and therefore the Commissioner of Income Tax (Exemptions) exemptions could not form a satisfaction as mandated under the law for according the registration.
8. Before the ITAT, it was contended that the registration under Section 12A of the Act, 1961 had been accorded, and it was further stated that required information details, vouchers, photographs had also been submitted as evidence before the Commissioner of Income Tax (Exemptions), and it was further submitted that the nature of activities can be examined at the stage of registration under Section 80G(5) of the Act, 1961 and objectives and/or idea incorporated in the memorandum of Association cannot be revisited. Before the ITAT from documents, the assessee tried to impress that the expenses shown in the books of accounts as donations contained the full details of the donors, and all the evidences as desired by the Commissioner of Income Tax (Exemptions) were available on record.
9. From the perusal of the impugned order it is evident that it weighed in the mind of the ITAT that despite numerous documents having been filed as evidence before the Commissioner of Income Tax (Exemptions), the same have not been duly taken note of, and the application of the assessee for registration has been rejected without examining the evidence filed by him, and therefore, remanded the matter to the Commissioner of Income Tax (Exemptions) to look into