THE HUBLI DHARWAD OBSTETRICS AND GYNAECOLOGICAL SOCIETY,HUBLI vs. COMMISSIONER OF INCOME TAX (EXEMPTIONS), BANGALORE

This appeal by the assessee is against the order dated 26.9.2018 of the Commissioner of Income-tax (Exemptions), Bangalore [CIT(E)] rejecting the application filed by the assessee for grant of registration u/s. 12AA of the Income-Tax Act, 1961 [“the Act”].

The assessee filed an application for grant of registration u/s. 12AA of the Act on 27.3.2018. It is the claim of assessee that it was existing for charitable object of medical relief and it was entitled to registration. The CIDT(E) addressed a letter dated 6.9.18 calling upon the assessee to show cause as to why the assessee cannot be regarded as existing for non-charitable purpose, because benefits of the society were not available to public at large. The CIT(E) was also of the view that membership of assessee society was not open to public. The hearing was fixed by the CIT(E) on 17.9.18.

The aforesaid notice of CIT(E) was received in the Karnataka Medical Institute, Admin. Section on 7.9.18 because the assessee’s society address was a room in the aforesaid medical institute. The letter was delivered to the assessee only on 28.9.18. Immediately on 29.9.2018, the assessee wrote a letter to the CIT(E) for an opportunity to reply to his show cause notice dated 6.9.2018. But the CIT(E) passed the impugned order on 17.9.18 which was the ate on which the notice dated 6.9.18 was delivered to the assessee. In the aforesaid circumstances, we are of the view that the assessee did not have a proper opportunity of being heard before the CIT(E). We therefore set aside the order of CIT(E) and restore the question of grant of registration to the CIT(E) for fresh consideration in accordance with law, after affording the assessee opportunity of being heard.

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