MITRA INSTITUTION BHOWANIPUR BRANCH,KOLKATA vs. C.I.T.(EXEMPTION), KOLKATA, KOLKATA

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ITA 737/KOL/2022Status: DisposedITAT Kolkata07 February 2023AY 2022-20235 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the CIT(Exemption) did not grant sufficient opportunity for hearing and set aside the ex-parte order. The case was remanded for re-adjudication on merits after the assessee submits the necessary documents.

What were the facts?

The assessee applied for registration under section 12A(1)(ac)(iii) of the Income Tax Act. The CIT(Exemption) dismissed the application ex-parte for non-compliance with notices and failure to provide documents, despite the assessee requesting an adjournment due to holidays.

What were the issues?

Whether the CIT(Exemption) erred by dismissing the application ex-parte without affording sufficient opportunity of hearing to the assessee.

Which sections of the Income-tax Act were involved?

Section 12A(1)(ac)(iii)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH, KOLKATA

Before: Shri Rajpal Yadav, Vice-(KZ) & Dr. Manish Borad

Per Rajpal Yadav, Vice-President (KZ):- The assessee is in appeal before the Tribunal against the order of ld. Commissioner of Income Tax (Exemption), Kolkata dated 17.10.2022 passed for A.Y. 2022-23. 1 Assessment Year: 2022-2023 Mitra Institution, Bhowanipur Branch

1.

2. The solitary grievance of the assessee is that ld. CIT (Exemption) has failed to grant sufficient opportunity of hearing and thereby dismissing its application ex-parte. The impugned order passed by the ld. CIT (Exemption) reads as under:-

“The assessee has filed an application in Form No.10AB for registration under section 12A(1)(ac)(iii) of the Income Tax Act, 1961.

2.

Notice dated 24.09.2022 was issued through ITBA fixing hearing on 14.10.2022, but there was no compliance to the notice. Further notice was issued on 14.10.2022 fixing date of hearing on 17.10.2022, but no reply was received from the assessee. Hence, in absence of any reply or response from the applicant assessee, the matter is being decided ex-parte.

3.

In the absence of any reply to the questionnaire which was issued to the applicant assessee and non- production of various details and documents as called for doing the necessary verification, it is not possible to verify the genuineness of the claim of the applicant assessee as to whether it meets the necessary conditions for registration under section 12A(1)(ac)(iii) of the Income Tax Act, 1961.

4. It is the duty of the applicant to produce the relevant documents for verification before the competent authority for registration under section 12A(1)(ac)(iii) of the Income Tax Act ,1961. The maxim ‘Vigilantibus Non-Dormentibus Jura Subveniunt’ refers to the obligation on the part of the applicant assessee that “the law assists those who are vigilant and not those who sleepover their rights” is squarely applicable in this case. It is evident that the applicant has merely filed the application for the sake of filing it and has not given reply to the questionnaire which was sent to it.

Assessment Year: 2022-2023 Mitra Institution, Bhowanipur Branch 5. In the absence of verification of the financial transactions being true and correct, genuineness and nature of activities, it cannot be held that the trust is eligible for registration under section 12A(1)(ac)(iii) of the Income Tax Act, 1961.

6.

It is relevant to note that as all the communications with the applicant assessee were made through e-mail, the applicant cannot take plea that it had not received the notice of hearing, as the notice issued to the assessee is available in e-filing portal of Income-tax Department, the same portal in which the applicant filed the application.

7.

Therefore, the Application for Registration under section 12A(1)(ac)(iii) of the Income Tax Act, 1961 is rejected, in limine”.

3. The ld. Counsel for the assessee, at the very outset, submitted that vide letter dated 12.10.2022, the assessee sought an adjournment upto 21st October, 2022 on the ground that dealing employee is on leave on account of Puja Holidays.

4.

A perusal of the impugned order, we find that the application for grant of registration was listed for hearing on 24th September, 2022 and a notice was issued fixing the date as 14.10.2022. According to the ld. Counsel for the assessee, a letter dated 12.10.2022 was moved requesting the re-fixation of the application after 21.10.2022 because Puja Vacations were going on during that period. The ld. CIT (Exemption) did not grant adjournment and dismissed the application by observing that sufficient details were not filed in support of the claim for registration under section 12A(1)(ac)(iii) of the Income Tax Act. After perusing the record carefully, we deem it appropriate that the impugned order deserves to be set aside because if 10-15 3 Assessment Year: 2022-2023 Mitra Institution, Bhowanipur Branch days was being given to the assessee for submission of complete details, nothing serious would have happened. It is not a situation where time-barring issue would be applicable for adjudication of this application. The first hearing commenced on 14.10.2022 and the assessee sought adjournment upto 21.10.2022. It is not such a request, which has frustrated the adjudicating authority. Therefore, we set aside the issue to the file of ld. CIT (Exemption) for re-adjudication of the application of the assessee on merit after submitting necessary material in support of the application.

5.

In view of the above, the appeal of the assessee is allowed. Order pronounced in the open Court on 07th February, 2023.

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