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Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR.
Before: SH. LALIET KUMAR & DR. M. L. MEENA
IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR. BEFORE SH. LALIET KUMAR, JUDICIAL MEMBER AND DR. M. L. MEENA, ACCOUNTANT MEMBER I.T.A. No. 391/Asr/2018 Assessment Year: N/A Smt. Krishna Devi Educational Vs. CIT(E), Charitable Society Vill & P.O. Chandigarh. Langari, Chandigarh Road, Mahilpur, Distt. Hoshiarpur. [PAN: ABIFS7407A] (Appellant) (Respendent)
Appellant by Sh. Vikash Bhagat & K. Bhagat, ARs. Respondent by Sh. Anupam Kant Garg, CIT DR
Date of Hearing 09.07.2021 Date of Pronouncement 16.08.2021
ORDER Per Dr. M. L. Meena, AM:
This appeal of the assessee trust is directed against the order dated 28.03.2018 passed by the CIT(E), Chandigarh whereby he has rejected the application of the assessee seeking registration u/s 12AA(1)(b)(ii) of Income Tax Act.
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At the outset, the ld. Counsel for the assessee that the
CIT(Exemptions), Chandigarh has erred in law and on facts of the case,
regarding while rejecting the application of the assessee seeking registration
u/s 12AA disputed the issue of jurisdiction, since its being connected with
one of the groups of search cases u/s 132 and the order u/s 127 the I.T. Act,
1961 was still stands in operation. The present application was disposed off
as invalid, having been filed out of the jurisdiction without examining merits
of the case. He requested for issuing appropriate direction to the CIT(E) to
grant registration to the applicant assessee.
The facts of the from the record are that the Society was registered on
18.11.2005 and it has applied for registration u/s 12AA of The Income Tax
1961 on 08.09.2017 in Form No. 10A. The application of the Society for
registration u/s 12AA of Income Tax Act 1961 has been rejected by The
Commissioner of Income Tax (Exemptions) after making certain
observations vide its order dt. 28.03.2018. However, no objection was raised
regarding the activities and objects of the society.
Having heard both the sides, and perused material on record. It is
undisputed material fact that the subject application for registration u/s
12AA was disposed off as invalid, having been filed out of the jurisdiction
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in view of order 127 of the Act being in operation on the basis of the report
of Income Tax officer (Exemption) Jalandhar submitted vide its Letter No.
2946 dt. 26.03.2018, wherein it was mentioned that as per information
gathered from the O/o DCIT, Central Circle -2 , Jalandhar, the assessee-
Smt. Krishna Devi Education Charitable Society is a group connected case
of K.C. Group of Nawanshahr, where search & seizure operation u/s 132
was carried out on 18.02.2010 and accordingly the case was centralized with
DCIT, CC-2, Jalandhar.
The ld. Counsel contended that the CIT (Exemptions) has wrongly
held that Assessee has concealed the fact that Search u/s 132 of the Act was
conducted whereas the said information has never been confronted before
the assessee and no opportunity of being heard granted which is against the
principal of natural Justice. He further submitted that there was a survey
operation conducted on the society, not search operation, and no incremental
documents found during survey and the CIT (Exemptions) has wrongly
passed the order without raising any objection on the aims & objects of the
society and the activities of the society which is most essential part for
granting registration.
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The applicant assessee relies on Hon’ble Kolcutta High Court in case 6. of ‘Kumar & Brothers & Anr. Vs. UOI’, 212 CTR 213 (Calcutta) where it was held that in the case of transfer of case under s. 127 from one city to the other, principles of natural justice have to be complied with by giving the assessee an opportunity of hearing—Further, reasons for such transfer must be recorded—Transfer of case of the petitioners from Kolkata to Mumbai—- No opportunity of hearing was given to the petitioners prior to transfer of case—Thus, the transfer was made in contravention of sub-s. (1) of s. 127— Same cannot be sustained—Order of transfer set aside and quashed.
Again, he referred to the case of ‘Nitin Developers and construction 7. vs. Commissioner of Income Tax’, Hon’ble High Court of Delhi 284 ITR 605 has held that notice has to be given to the assessee and the order of transfer must disclose, proper application of mind to the objections which the assessee may have raised—No notice of the proposed transfer order was ever issued to the petitioner nor any objections invited from it—Impugned order does not even enumerate the reasons which made it necessary to transfer the assessment proceedings from Delhi to Meerut—Order passed by the respondent is quashed and the petitioner is directed to appear before the
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CIT to receive a show-cause notice and file its reply thereto—CIT is given liberty to pass a fresh order thereafter in accordance with law.
In the case of ‘Softesule Ltd vs. CCE’, (2002) 146 ELT 418 (Trib- 8. Mumbai)— held that Natural justice is not something to grant but is a right of the assessee. The right of hearing is sine qua non. This principle has to be strictly adhered to. Any proceedings continued by violating the right cannot be upheld on account of any reason except that of public expediency where post decisional hearing should be granted.
The main issue involved in the present appeal is regarding grant of registration under section 12AA of the Act. The ld A.R. contended that all the details required by the CIT(E), could have been furnished before him provided the assessee has been granted sufficient opportunity of being heard by way of communicating to the appellant the requisite details sought by the CIT. He further contended that it was only due to inadequate opportunity that the necessary material evidence by way of documentary evidence could not be made on the issue of change of jurisdiction in view of order u/s 127 of the Act passed if any in the case of the assessee.
The contention of the ld. AR that details required by the CIT were available with the assessee but the same could not be furnished due to lack of sufficient
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opportunity required to be granted to the assessee, sounds logical, reasonable and
justified. Considering the ld. AR contention that the assessee was prevented due to inadequate opportunity and non rebuttal of the AO’s report on the issue of Jurisdiction contemplated into disposal of its application as invalid by the CIT, having been filed out of the jurisdiction.
In view of principles of natural justice as above, we find it deem fit to restore the matter back to the file of the CIT(Exemption) to examine the issue of grant of registration u/s 12AA of the act, afresh, as per amended provisions of law, after taking into consideration the material evidence and after affording sufficient opportunity of being heard to the assessee trust. Accordingly, the case is restored to the CIT, for afresh consideration and examination of the application of assessee under section 12A(a), with the following observation:
I. To ascertain the material facts of jurisdiction after seeking rebuttal from the assessee to the AO’s report and order u/s 127 of the Act if any stand in operation. If jurisdiction stands lies with other Commission/Director (Exemtion), then transfer the application to that competent present jurisdiction authority to pass appropriate order on merits after examining the objects and the activities of the society as per the amended law. II. Consider the veracity of evidence claimed to be submitted before the then CIT.
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III. Verify the genuineness of the objectives of the assessee society in the light of evidences prima facie relevant, for the year under consideration for the purpose of grant of registration u/s 12AA of the Act.
IV. Aassessee shall cooperate in the proceedings, before the CIT.
V. All pleas available under the law shall remain so available to the assessee in the fresh proceedings before the Ld. CIT.
In result, the appeal is treated allowed for statistical purposes in the terms indicated as above.
Order pronounced in the open court on 16 .08.2021 Sd/- Sd/-
(Laliet Kumar) (Dr. M. L. Meena) Judicial Member Accountant Member doc Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T.