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Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR
Before: SH. N.K.CHOUDHRY & DR. A.L.SAINI
IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR
BEFORE SH. N.K.CHOUDHRY, JUDICIAL MEMBER AND DR. A.L.SAINI, ACCOUNTANT MEMBER
ITA No.591/Asr/2019 Assessment Year: NIL
Lions Eye Hospital Charitable The CIT(Exemptions), Society, C/o Sh. Sameer Chandigarh. Bhatia, Advocate, 158/2, Vs. Guru Teg Bahadur Nagar, Opposite Mata Gujri Park, Jalandhar-144 003. [PAN:AAAAL 5752D] (Appellant) (Respondent)
Appellant by : Sh. Sameer Bhatia (Ld. Adv.) Respondent by: Smt. Prabhjot Kaur (Ld. CIT-DR)
Date of hearing: 25.11.2019 Date of pronouncement: 25.11.2019
ORDER PER N.K.CHOUDHRY, JM: This appeal has been preferred by the appellant society against the order dated 15.07.2019 passed by the Ld. CIT(Exemptions), Chandigarh, u/s 12AA(1)(b)(ii) of the I.T. Act, 1961 (hereinafter called as ‘the Act’).
At the outset, it was submitted by the ld. Counsel of the appellant society that the application for registration u/s 12AA of the Act was filed on 14.01.2019 by mentioning the fact that the appellant society is an ongoing entity in operation since 27.04.2007. The said application of the assessee was taken into consideration and
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questionnaire was issued through online portal on 12.02.2019, whereby the opportunities of personal hearing was accorded to the appellant with the request to provide clarifications to the queries raised on 05.07.2019, in response to which the appellant has submitted the reply on ITBA on 26.04.2019. Thereafter, the additional queries have been raised as mentioned in para No.3 of the order. As per impugned order the ld. CIT(E) has observed that on this date neither did anybody attended nor was any request for adjournment received, therefore, it becomes evident that the appellant is not interested in pursuing the matter . Ultimately the ld. CIT(E) denied the registration of the application u/s 12AA of the Act, without touching the merit of the case.
The Ld. DR, on the other hand submitted that the order under challenge has been passed on the basis of material available on record and does not require any interference by this Court.
Having heard the parties at length and material available on record. It is observe that the Ld. CIT(E) has passed the order without touching the merit of the case and denied the registration u/s 12AA of the Act to the appellant society. It is the case of the appellant society that they have complied all the notices and filed the relevant reply to the queries raised by the ld. CIT(E). We observe that the ld. CIT(E) after receiving the reply dated 26.04.2019 and before proceeding to denying the registration to the application has not given any opportunity of being heard except of raising additional queries through ITBA on 05.07.2019.
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It is trite to say that every person has the right to speak and be heard when allegations are being put towards him or her. If no opportunity has been given to the party effected, then it shall amount to violations of the principles of natural justice, which embedded in latin words “Audi Alteram Partem” which means ‘hear the other side’, or ‘no man should be condemned un-heard’ or ‘both the sides must be heard before passing any order’. The principle of Audi Alteram Partem is the basic concept of the principle of natural justice and has not evolved from the constitution but evolved through civilization and mankind and is the concept of common law, which implies fairness, reasonableness, equality and equity. In India, the principles of natural justice are the grounds of Article 14 and 21 of the Constitution. Article 14 enshrines that every person should be treated equally. In the landmark case of ‘Maneka Gandhi vs. The Union of India’ (1978 AIR 597), it has been held by Constitution Bench of the Apex Court that the law and procedure must be of a fair, just and reasonable kind. The doctrine ensures a fair hearing and fair justice to both the parties. Under this doctrine, both the parties have the right to speak. The aim of this principle is to give an opportunity to the parties to defend themselves. Before the court, both the parties are equal and are entitlement of equal opportunity to represent them. If the order is passed by the authority without providing the reasonable opportunity of being heard to the person affected by it adversely will be invalid and shall be liable to be set aside.
As per the provisions of section 12AA of the ACT, before passing the order for refusing to register the trust or institution,
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a reasonable opportunity of being heard is required to be given, for the sake of brevity and ready reference the provisions are reproduced herein below:
Section 12AA of the Income Tax Act reads as follows: "12AA. Procedure for registration.--(1) The Commissioner, on receipt of an application for registration of a trust or institution made under clause (a) or clause (aa) of sub-section (1)of section 12A, shall-- (a) call for such documents or information from the trust or institution as he thinks necessary in order to satisfy himself about the genuineness of activities of the trust or institution and may also make such inquiries as he may deem necessary in this behalf; and (b) after satisfying himself about the objects of the trust or institution and the genuineness of its activities, he -- (i) shall pass an order in writing registering the trust or institution; (ii) shall, if he is not so satisfied, pass an order in writing refusing to register the trust or institution, and a copy of such order shall be sent to the applicant: Provided that no order under sub-clause (ii) shall be passed unless the applicant has been given a reasonable opportunity of being heard.
Coming to the instant case, admittedly before declining the registration u/s 12 of the Act, no reasonable opportunity of being was provided to the Applicant, which is mandatory and even otherwise the Ld CIT(E) did not pass the order on merit , hence on these grounds, the order under challenge is set aside and case is reminded to the file of the ld. CIT(E) for decision afresh, suffice to say while affording reasonable opportunities of being heard to the appellant society and within six months of the receipt of this order.
The applicant society shall co-operate with the proceeding before the ld. CIT(E) and provide all the documents and to clarify each and every query if any to be raised by the Ld. CIT(E) and in
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case of failure or default by the appellant society then the Ld. CIT(E) shall be at liberty to decide the application of the appellant society considering the particular facts and circumstances in accordance with law and in that eventuality the appellant society shall not entitle for any leniency.
In the result, the appeal filed by the appellant society stands allowed for statistical purposes.
Order pronounced in the open Court on 25/11/2019.
Sd/- Sd/- (DR. A.L.SAINI) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 25/11/2019. /PK/ Ps. Copy forwarded to: 1. The Appellant 2. The Respondent 3. The CIT 4. Then CIT(Appeals) 5. SR DR, I.T.A.T. Amritsar 6. Guard File True Copy By Order