JAN MANGAL PHARMACY FOUNDATION,,VALSAD vs. CIT, (EXEMPTION),, AHMEDABAD

The Assessee is in appeals before us against the separate orders of Ld.Commissioner of Income Tax(Exemptions), Ahmedabad [‘CIT(E)’ in short] identically dated 31/01/2018.

Brief facts of the case are that the assessee, in the present case, had applied for registration of trust u/s.12AA of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) before the ld.CIT(E), Ahmedabad, however the said application for registration u/s.12AA of the Act was rejected by the CIT(E), Ahmedabad by holding that assessee failed to file documentary evidences to enable him to bring satisfaction about the genuineness of the assessee-trust activities.

The Ld.AR submitted before us that assessee had already submitted all the required documents which were not considered by ld.CIT(E). It was also submitted that ld.CIT(E) had sought details of activities actually carried out by the assessee-trust and in the absence of provisional account, it was held that nature of activities of the assessee were not clear. However, in this respect, ld.AR relied upon the decision & 680 /Ahd/2018 Jan Mangal Pharmacy Foundation vs. CIT(E) - 3 - of Hon’ble Gujarat High Court in the case of Director of Income-tax vs. Panna Lalbhai Foundation reported at (2013) 35 taxmann.com 104 (Gujarat) wherein it was held as under: “Section 12AA of the Income-tax Act, 1961 – Charitable or religious trust – Procedure for registration [Denial of registration] – Whether where there was no material to conclude that objects of trust or activities of trust were not genuine or any doubt arose in respect of genuineness of activities, registration under section 12AA could not be denied – Held, yes – Whether only because trust has not commenced activities, Commissioner would have no authority to Ipso facto reject application made under section 12A for registration under section 12AA – Held, yes [Paras 5 & 6] [in favour of assessee].”

After hearing both the parties at length, we found that assessee could not appear before ld.CIT(E) when the case was called for and in the absence of the assessee, the Ld.CIT(E) while relying upon the decision of Hon’ble Supreme Court in the case of CIT vs. Dawoodi Bohara Jamat (Civil Appeal No.2492 of 2014) had decided the application for registration of Trust u/s.12AA of the Act filed by the assessee. & 680 /Ahd/2018 Jan Mangal Pharmacy Foundation vs. CIT(E) - 4 -

Be that as it may, after considering the rival submissions, we are of the view that matter requires reconsideration at the level of Ld.CIT(E). Since according to assessee, the assessee had already submitted the required documents before Ld.CIT(E), but the same do not find mention in the order. Therefore, it can be inferred that those documents filed by the assessee were not considered. The principle of audi alteram partem is the basic concept of natural justice. The expression “audi alteram partem” implies that a person must be given an opportunity to defend himself. This principle is sine qua non of every civilized society. The right to notice, right to present case and evidence, right to rebut adverse evidence, right to cross examination, right to legal representation, disclosure of evidence to party, report of enquiry to be shown to the other party and reasoned decisions or speaking orders. We took this guidance for right of hearing, from the ratio as is laid down by the Hon'ble Supreme Court in the case of Maneka Gandhi v. Union of India, wherein Hon'ble Supreme Court has laid down that rule of fair hearing is necessary before passing any order. We find that it is pre-decision hearing standard of norm of rule of audi alteram partem. We are, therefore, of the view that matter requires reconsideration at the level of Ld.CIT(E). Thus, while setting aside the order of Ld.CIT(E), we restore it back to Ld.CIT(E) and direct that all the documents filed by the assessee be considered and assessee be given one more opportunity of & 680 /Ahd/2018 Jan Mangal Pharmacy Foundation vs. CIT(E) - 5 - being heard and to file any other documents before the Ld.CIT(E), Ahmedabad as called for and the Ld.CIT(E) is also directed to decide the application for registration filed by the assessee, keeping in view the principles laid down in the aforesaid judgements while passing a fresh order, if the assessee wants to submit any document, he is at liberty to submit before the ld.CIT(E). Accordingly, the appeal of the assessee is set aside to the file of ld.CIT(E) for statistical purposes.

In the result, appeal of the assessee in is allowed for statistical purposes.

The assessee in raised the following grounds of appeal: (1) That on facts, and in law, the entire order passed by learned CIT(Exemptions) is bad in law, invalid and void ab initio as it is unsigned. (2) That on facts, and in law, the learned CIT(Exemptions) Ahmedabad has grievously erred in not granting sufficient and reasonable opportunity to the appellant. (3) That on facts, and in law, the learned CIT(Exemptions) Ahmedabad has grievously erred in rejecting the application for approval u/s.80G(5) of the Act. (4) That on facts, and in law, the approval granted u/s.80G(5) of the Act ought to have been continued as prayed for. & 680 /Ahd/2018 Jan Mangal Pharmacy Foundation vs. CIT(E) - 6 -

Both the sides consented that identical issue is involved in this appeal as well. Thus, for parity of reasons noted above, our view in shall apply mutatis mutandis to this appeal captioned above. As a result, the appeal of the Assessee in ITA No.680/Ahd/2018 is also allowed for statistical purposes.

In the combined result, both the appeals of the assessee are allowed for statistical purposes.