SHRI NAVCHETAN EDUCATION AND CHARITABLE TRUST,SURAT vs. THE INCOME TAX OFFICER (EXEMPTION) WARD, SURAT

This appeal by the Assessee is directed against the order of Ld.Commissioner of Income Tax(Exemption), Ahmedabad dated 26.11.2018.

Grounds raised by the Assessee read as under: “(1) On law, the Commissioner of Income-tax (Exemption), was not justified in rejecting application u/s.12A arbitrarily after a period of 7 years. (2) The Commissioner of Income-tax (Exemption), failed to honour the decision of Hon'ble Supreme Court in case of Commissioner of Income-tax, Kanpur v/s. Society for Promotion of Education, Allahabad.

Brief facts of the case are that the assessee has applied for registration of trust u/s.12AA of the Income Tax Act on 18-05-2011 to obtain registration u/s.12A of the Act. However, the said application for registration u/s.12AA of the Income Tax Act was rejected by the CIT(Exemption), Ahmedabad by holding that the jurisdiction over the trust was with respective CIT charge, hence, no details can be retrieved for the earlier period of 15.11.2014 and directed to apply for fresh application to obtain registration u/s.12Aa of the Act.

The ld.Authorised Representative (AR) submitted that according to the assessee has made an application for registration u/s.12A of the Act on 18.05.2011, however, after passage of 7 years on 26.11.2018 the ld.CIT(E) rejected the same for the assessee. He further submitted since the registration was not granted for a period of 6 months from the date of application it should be deemed to have been granted by placing support on the decision of Hon'ble Supreme Court in the case of CIT, Kanpur vs. Society for Promotion of Education.

Be that as it may, after considering the rival submissions, we are of the view the matter requires reconsideration at the level of Learned CIT(Exemption). We are of the view that since the assessee Shree Navchetan Education and Charitable Trust Vs. ITO, Exemption Ward, Surat / Page 3 of 5 has made an application for registration u/s.12A of the Act on 18.05.2011 and relying upon the decision of Hon'ble Supreme Court in the case of CIT, Kanpur vs. Society for Promotion of Education, we restore back this appeal the file of the ld.CIT(E), Ahmedabad for decision afresh by allowing one more opportunity to the assessee trust. 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 the matter requires reconsideration at the level of Learned CIT(Exemption). Thus, while setting aside the order of ld.CIT(E), we restore it back to Ld.CIT(Exemption) and direct that to one more opportunity to the assessee and ld.CIT(E) also directed to decide the application for Registration filed by the Shree Navchetan Education and Charitable Trust Vs. ITO, Exemption Ward, Surat / Page 4 of 5 assessee by passing a fresh order, if the assessee wants to submit any documents, he is at liberty to submit before the ld.CIT(E), accordingly the appeal of the assessee set-aside to the file of ld.CIT(Exemption) for statistical purposes.

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

Order pronounced in the open court on 14-02-2020.