VISHAL BHARTI SHIKSHA SAMITI,MAHENDERGARH vs. CIT (E), CHANDIGARH

Briefly stated facts of the case are that on an application filed by the assessee before the CIT in Form No.10A on 23/09/2014 for registration of the assessee in terms of section 12AA of the Act, an opportunity of being heard was given to the assessee. The CIT also called for a report from the relevant Assessing Officer. On the basis of the report, the Ld. CIT concluded that the assessee has not furnished evidences of investing the funds as required under the provisions of section 11(5) of the Act and accordingly the registration under section 12AA was denied to the assessee. Aggrieved with the impugned order of the CIT, the assessee is in appeal before the Tribunal.

Before us, the Ld. counsel submitted that assessee has filed all the documents including copy of by-laws of the society, books of accounts, vouchers and bank accounts etc., however, the Ld. CIT has denied the registration without any valid reasons and without even providing the copy of the report of the Assessing Officer relied upon by the Ld. CIT for rejecting the registration. 4. The Ld. DR, on the other hand, submitted that CIT has validly rejected the registration under section 12AA of the Act as assessee has not complied with the provisions of the Act. 5. We have heard the rival submissions and perused the relevant material on record. We note that the CIT has denied the registration only on the ground that no evidence in respect of investment of funds as required under provisions of section 11(5) of the Act were submitted before the Assessing Officer. However, we find from the impugned order that, before rejecting the application of the assessee for registration, the assessee has not been confronted with the report of the Assessing Officer and thus no opportunity has been provided to the assessee to explain on an adverse observation of the Assessing Officer. It is not material what opportunity was provided to the assessee by the Assessing Officer. The proceedings under section 12AA of the Act are before the CIT and he was required to give opportunity to the assessee before drawing adverse inference on the basis of the report of the Assessing Officer. The action of the Ld. CIT of not providing the opportunity to the assessee before rejecting the registration under section 12AA of the Act, is in violation of the principle of natural Justice. 6. In view of the above facts, we feel it appropriate to set aside the impugned order and restore the matter to the file of the Ld. CIT for providing opportunity of being heard to the assessee and decide the issue of granting registration under section 12AA of the Act, afresh. Accordingly, the grounds raised

7. In the result, the appeal of the assessee is allowed for statistical purposes. Decision is pronounced in the open court on 4th July, 2018. Sd/- Sd/- (BHAVNESH SAINI) (O.P. KANT) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 4th July, 2018. RK/-(D.T.D.) Copy forwarded to: