SHRI MATA JI EDUCATIONAL TRUST,JAMMU & KASHMIR vs. COMMISSIONER OF INCOME TAX(EXEMPTIONS), CHANDIGARH

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. SANAJY ARORA, ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER ITA No.581 (Asr)/2018 Assessment Year: 2018-19

Shri Mata Ji Educational Trust Vs. CIT (Exemptions), New National Hr. Sr. Sec School, C.R. Building, 5th Floor TaliMorhMiranSahab, Section 17-E, Chandigarh R.S. Pura, J & K 181101

[PAN/TAN:AAVTS1646P] (Appellant) (Respondent)

Appellant by : Sh. P N ARORA(Ld. Advocate) Respondent by : Sh. Sandeep Chouhan (CIT, DR) Date of hearing : 28-05-2019 Date of pronouncement : 30-05-2019 ORDER PER N.K.CHOUDHRY, JM:

This is an appeal preferred by the Assessee Trust (hereinafter called as the Appellant) against the order dated 29- 09-2018 , impugned herein, passed by the Ld. CIT (Exemptions), Chandigarh, whereby the Ld. CIT(E) rejected the application for Registration u/s 12AA of the I.T. Act, 1961 (hereinafter called as ‘the Act’).

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the appellant was asked to submit details/clarification as mentioned in para 5 of the impugned order, on or before 20/08/2017. The said show cause notice dated 06-08-2018 was replied by the appellant by filing the reply and documents. Thereafter further queries have been raised vide email dated 22- 09-2018 and asked to submit by 25-08-2018 against which the Appellant submitted the reply on 24-08-2018. Thereafter again vide email dated 28-09-2018 (12:10:43PM), the appellant was asked to submit further documents and details by 5:30 PM on the very same date, which also complied and replied by the Appellant, however the Ld. CIT(E) still rejected the application under section 12AA of the Act by cited the reasons that the Appellant failed to provide evidence qua existence of trust as bonafide or not, further no evidence has been filed by the appellant qua dissolution of the Trust , further no details of previous entity have been filed qua covering under exemption or not, further takeover of school by the appellant has not been clearly brought out in the case.

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of the Act, no opportunity of being heard has been given except asking the reply and documents by various notices.

4.1 From the order it reflects that in para Nos. 3 and 4 , the Ld. CIT (E) consciously observed that while considering the case for registration u/s 12AA of the Act, the objects of the Trust/Society and genuineness of the activities are to be examined.

4.2 From the order it also reflects that the Ld. CIT(E) sought certain explanations/documents, which have been specifically clarified and replied by the Applicant by filling the relevant information and documents. Thereafter, no opportunity was provided to the applicant either for corroboration/confrontation and/or for establishing its case for grant of registration, however on the basis of the reply itself, the registration application was rejected.

4.3 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.

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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 AlteramPartem” 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 AlteramPartem 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.

4.4 As per the provisions of section 12AA of the ACT, before passing the order for refusing to register the trust or institution, 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:

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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.

4.5 Coming to the instant case, admittedly before declining the registration u/s 12 of the Act, no reasonable opportunity of being heard was provided to the Appellant, which is mandatory, hence on this ground itself, the order under challenge is liable to be set aside.

4.6 In our considered view, to meet the substantial justice, appropriate course would be to set aside the order impugned and remand back the case to the file of the Ld. CIT(E) for a decision afresh. Consequently, the case is remanded to the file of the Ld. CIT(E) for decision afresh within 03 months of the

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receipt of this order, suffice to say due opportunities of being heard should be given to the Appellant. As we have decided to set aside the impugned order and remanded the case to the file of the Ld. CIT (E), hence not dwelling into the merits of the case. The Ld. CIT(E) shall be at liberty to re-consider all issues already raised or to be raised further and otherwise feel, fit and appropriate for consideration for proper adjudication of application for registration u/s 12AA of the Act.

Order pronounced in the open Court on 30th day of May 2019.

Sd/- Sd/- (SANJAY ARORA) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 30th of May, 2019 Copy of the order forwarded to: (1) Appellant/Assessee (2) The CIT (Exemption), Chandigarh (3) The SR. DR, I.T.A.T., Amritsar