SANTA MARIA CONVENT vs. THE COMMISSIONER OF INCOME-TAX

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WP(C)/21591/2014HC KeralaKLHC01067212201419 August 2014Bench: HONOURABLE MR.JUSTICE K.VINOD CHANDRAN4 pages
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What did the High Court hold?

The High Court held that the Commissioner of Income Tax committed a clear violation of the principles of natural justice. The Commissioner's decision to conclude the proceedings without even acknowledging the petitioner's request for an adjournment and the opportunity to produce documents was considered peremptory. Consequently, the order passed by the Commissioner (Ext.P8) was set aside. The application for registration under Section 12A was restored to the file of the Commissioner. The petitioner was directed to appear before the Commissioner on September 17, 2014, at 11 a.m. The Commissioner was directed to intimate a date for hearing and finalize the proceedings expeditiously, ensuring the petitioner is heard before finalization. The ratio decidendi is that a statutory authority must adhere to principles of natural justice, including providing a reasonable opportunity to be heard and to produce evidence, especially when an adjournment is sought promptly after receiving notice.

What were the facts?

The petitioner, Santa Maria Convent, applied for registration under Section 12A of the Income Tax Act, 1961, asserting its status as a charitable organization. The Commissioner of Income Tax issued a hearing notice on July 25, 2014, scheduling the hearing for July 31, 2014, and requesting supporting documents. The petitioner received this notice on July 28, 2014, and promptly requested an adjournment to produce the necessary documents. However, the Commissioner, by an order dated July 31, 2014, concluded the proceedings without acknowledging the adjournment request, citing the non-production of documents as the sole reason.

What were the issues?

1. Whether the Commissioner of Income Tax violated the principles of natural justice by passing an order without considering the petitioner's request for an adjournment and without affording a proper opportunity to produce documents, in relation to the application for registration under Section 12A of the Income Tax Act, 1961. Assessee's Contention: The petitioner argued that the Commissioner acted in violation of natural justice by concluding the proceedings peremptorily, without reference to their request for an adjournment and the opportunity to submit documents. The petitioner received the notice late and immediately sought more time. Revenue's Contention: The judgment does not record any specific contentions from the revenue.

Which sections of the Income-tax Act were involved?

Section 12A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN TUESDAY, THE 19TH DAY OF AUGUST 2014/28TH SRAVANA, 1936 WP(C).No. 21591 of 2014 (Y) ---------------------------- PETITIONER(S): ------------------------ SANTA MARIA CONVENT, KERALAPURAM, PERUMPUZHA P.O., KOLLAM-691 594, REPRESENTED BY ITS PRESIDENT, REV.SR.MARY JINCY. BY ADVS.SRI.KMV.PANDALAI, SMT.S.HEMALATHA. RESPONDENT(S): ---------------------------- THE COMMISSIONER OF INCOME-TAX, AAYAKAR BHAVAN, KAWDIAR, THIRUVANANTHAPURAM-695 003. BY ADV. SRI.JOSE JOSEPH, SC. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 19-08-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: rs.

WP(C).No. 21591 of 2014 (Y) APPENDIX PETITIONER'S EXHIBITS:- EXT.P1. TRUE COPY OF THE TRUST DEED DATED 04/05/2009 OF THE PETITIONER-TRUST. EXT.P2. TRUE COPY OF THE APPLICATION DATED 26/03/2014 SUBMITTED BY THE PETITION FOR REGISTRATION U/S.12(A) IN FORM NO.10A. EXT.P3. TRUE COPIES OF ACCOUNT FOR THE YEAR 2010-11 SUBMITTED BY THE PETITIONER. EXT.P3(A). TRUE COPIES OF ACCOUNT FOR THE YEAR 2011-12 SUBMITTED BY THE PETITIONER. EXT.P3(B). TRUE COPIES OF ACCOUNT FOR THE YEAR 2012-13 SUBMITTED BY THE PETITIONER. EXT.P4. TRUE COPIES OF NOTES ON ACTIVITIES FOR THE YEAR 2010-11 SUBMITTED BY THE PETITIONER. EXT.P4(A). TRUE COPIES OF NOTES ON ACTIVITIES FOR THE YEAR 2011-12 SUBMITTED BY THE PETITIONER. EXT.P4(B). TRUE COPIES OF NOTES ON ACTIVITIES FOR THE YEAR 2012-13 SUBMITTED BY THE PETITIONER. EXT.P5. TRUE COPY OF THE NOTICE C.NO.301/12A/49/TVM/2014-15 DATED 25/07/2014 ISSUED BY THE RESPONDENT. EXT.P6. TRUE COPY OF THE LETTER DATED 28/07/2014 SENT BY THE PETITIONER TO RESPONDENT. EXT.P7. TRUE COPY OF TRACK RESULT OF SERVICE OF LETTER EXTRACTED FROM THE SITE OF POSTAL DEPARTMENT. EXT.P8. TRUE COPY OF THE ORDER C.NO.301/12A/49/2013-14 DATED 31/07/2014 ISSUED BY THE RESPONDENT. RESPONDENT'S EXHIBITS:- NIL. //TRUE COPY// P.A. TO JUDGE rs.

K. VINOD CHANDRAN, J. ===================== W.P.(C) No. 21591 of 2014 - Y ====================== Dated this the 19th day of August, 2014 J U D G M E N T The petitioner applied for registration under Section 12A of the Income Tax Act, 1961, claiming that the petitioner is a charitable organisation. On the application, a hearing notice was issued as per Ext.P5, dated, 25.07.2014 which posted the case for hearing on 31.07.2014, and also directed the relevant documents to be produced in support of the claim made. The petitioner received the said notice on 28.07.2014. Immediately on receipt of the notice, the petitioner applied for time, to produce the documents. However, the Commissioner by Ext.P8 order without even reference to the request for adjournment, concluded the same only on the ground that, no documents were produced in support of the claim made. 2. In such circumstance, there is a clear violation of principles of natural justice. There was absolutely no

W.P.(C) No. 21591 of 2014 - Y 2 necessity for the Commissioner to conclude the proceedings in a peremptory manner as is indicated in Ext.P8. Ext.P8 hence would be set aside. The application is restored to the files of the Commissioner of Income Tax. The petitioner or his authorised representative shall appear before the Commissioner on 17.09.2014 at 11 a.m. The Commissioner or his office shall intimate a date, on which the hearing shall be conducted and the proceedings shall be finalised expeditiously, and no separate notice is required for the same. The petitioner shall definitely be heard before the proceedings are finalised. The Writ Petition stands allowed. Sd/-

K. VINOD CHANDRAN,

JUDGE SB // True Copy // P.A To Judge.

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