SEERVI SAMAJ KOTHANUR TRUST,BANGALORE vs. THE INCOME TAX OFFICER (EXEMPTIONS) WARD-3, BANGALORE

O R D E R Per Shri Jason P Boaz, A.M. :

This appeal by the assessee-trust is directed against the ex-parte order of CIT(Exemptions), Bangalore u/s 12AA(1)(b)(ii) of the Income Tax Act, 1961 (in short ‘the Act’) dated 22.11.2017 rejecting the assessee’s application for registration u/s 12AA of the Act.

Page 2 of 5 2.1 The assessee-trust, filed an application for registration u/s 12AA of Act on 30.05.2017. The Office of the CIT(E) issued letters dated 31.07.2017 and 01.11.2017 calling for certain details/clarification to be filed by 21.08.2017 and 17.11.2017. According to the CIT, there was no response by the assessee and it was also observed that the notices sent by speed post were returned unserved on account of ‘insufficient address’. The CIT observed that in the absence of filing of details called for from the assessee, it is not possible to ascertain he genuineness of the objects and activities of the assessee trust. The CIT further observing that the non-compliance by the assessee to notices issued indicates that the assessee is not interested in pursuing the application for registration and rejected the assessee’s application for registration vide the impugned order dated 22.11.2017.

3.1 Aggrieved by the ex-parte order of the CIT(Exemptions), Bangalore dated 22.11.2017 rejecting the assessee-trust’s application for registration vide order u/s 12AA(1)(b)(ii) of the Act, the assessee has filed this appeal before the Tribunal, wherein it has raised the following grounds:

3.2 The learned AR, in support of the grounds raised, assailed the impugned order of the CIT(E) as being void ab-initio and liable to be quashed. It is submitted that as the assessee has not been served with any of the show cause notices/letters claimed to have been sent, it could not have complied with filing of the required details. It is contended that since the Trust Deed was filed along with the application for Registration, the genuineness of the objects/activities of the assessee trust could have been examined by the CIT. It is prayed that since the assessee’s application for registration u/s 12AA of the Act was rejected ex-parte, without a speaking order on merits and in the absence of the assessee being afforded opportunity of being heard due to non receipt of the notices/letters cited, the impugned order may be set aside.

3.3 Per contra, the learned DR supported the order of the CIT(Exemption) rejecting the assessee’s application for registration.

3.4.1 We have heard the rival contentions and perused and carefully considered the material on record. On a perusal of the impugned order, it is evident that the CIT(E) has rejected the assessee’s application for registration u/s 12AA of the Act ex-parte; stating that the assessee has failed to comply with notices issued by filing details called for and therefore it was not possible to ascertain the genuineness of the objects and activities of the assessee trust. On the other hand, the assessee contends that since none of the notices/letters issued by CIT(E) calling for details/clarifications were never served, it could not file the details called for. We, however, notice that the assessee’s address in Form No. 36 filed by the assessee before us, viz., No. 125, Byrathi Village, Bidarahalli Hobli, Bangalore – 560 077 is exactly the same address

Page 4 of 5 to which the CIT(E) claims notices/letters issued by speed post could not be served on account insufficient address 3.4.2 Be that as it may, it is evident from the impugned ex-parte order and the averments of the assessee-trust, that the process of ascertaining the genuineness of the objects and activities of the assessee trust could not be carried out by the CIT(E) in the above circumstances. It is also seen that the assessee, due to non service / receipt of letters/notice, assessee has had no opportunity whatsoever of being heard in the matter. In these circumstances, as discussed above, we are of the considered view that the impugned ex-parte order of the CIT(E) u/s 12AA(1)(b)(ii) of the Act is liable to be set aside and in the interest of substantial justice, do so. We restore the matter of the assessee-trust’s application for registration u/s 12AA of the Act dated 30.05.2017 to the file of the CIT(E), Bangalore, for examination, consideration and adjudication thereon after affording the assessee reasonable and adequate opportunity of being heard and to file details/submissions required, which shall be duly considered before adjudication of this issue. We hold and direct accordingly. Consequently, the assessee’s appeal is allowed for statistical purposes.

Order pronounced in the open court on this 19th day of December, 2018.