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Income Tax Appellate Tribunal, CHANDIGARH
Before: SMT. DIVA SINGH & SHRI VIKRAM SINGH YADAV
ORDER आदेश आदेश PER DIVA SINGH The present appeal has been filed by the assessee wherein the correctness of the order dated 23.09.2020 of CIT (Exemptions) Chandigarh passed u/s 10(23C)(vi) is assailed on the following grounds :
The order of the learned IT(Exemptions) is arbitrary, preposterous, and capricious in so far as the orders suffers from meaningful application of mind ignoring the plethora of information provided to him.
The learned CIT(Exemptions) raised as many as 24 omnibus queries with a view to examine the claim for exemption without looking into their relevance to the facts of the case and thus the order suffers from proper application of mind and the application has been rejected on untenable technical ground and not on merit. 3. The learned CIT(Exemptions) has held that six Issue emerge after considering the replies furnished by the applicant but the said issues are insignificant and are not ITA-336/CHD/2020 Page 2 of 6 germane to reaching such a conclusion as the CIT(Exemption) has reached for rejecting the claim for exemption u/s 10(23C)(vi) of the Income tax Act, 1961.
4. The learned CIT(Exemptions) clearly exhibits his inability to examine the factum of the existence of the applicant for the purposes of education and not for profit as he has been asking such information which is wholly irrelevant and redundant and hastened to reject the application on the ground that the applicant has failed to provide such information though all the relevant information as mandated under rule 2CA of the Income tax Rules on form No.56D which is quite exhaustive had been provided.
5. There is no finding of the learned CIT(Exemptions) that the applicant has not provided any of the information as stipulated in form No.56D under rule 2CA of the Income tax Rules, 1962 and he could not legally travel beyond the domain of enquiry as envisaged in rule 2CAand reject the application of the applicant on flimsy and irrelevant grounds.
6. The learned CIT(Exemption) did not issue any show cause notice asking the applicant to furnish any such information which he thought was not provided and chose to rush to reject the application and thereby denied natural justice to the applicant.
7. The learned CIT(Exemptions) has wrongly observed that there was unresponsive attitude of the applicant while admitting at the same time that the applicant had filed replies on 31.08.2020 and also on 17.09.2020 over and above the information provided on N0.56D.
8. The learned CIT(Exemptions) gave no opportunity to the applicant to provide further any such information which he deemed was still required for him to reach a decision as to whether the applicant exists solely for education purposes and hastily rejected the application. Such order passed in haste gets vitiated and is not tenable in law.
The appellant craves leave to add or amend the grounds of appeal
before the appeal is heard or disposed of.
2. At the time of hearing, no one was present on behalf of the assessee. However, considering the facts on record and the finding arrived at after hearing ld. CIT-DR, we deem it appropriate to set aside the impugned order back to the file of the CIT(A). The reasons for coming to the aforesaid conclusion are addressed hereunder.
While coming to the above decision for the said direction, the relevant facts on record taken into consideration by us are that the assessee Society, registered in Registrar’s Office, Kangra (HP) on 31.08.1994 vide application and Form No. 56D, requested for grant of ITA-336/CHD/2020 Page 3 of 6 approval u/s 10(23C)(vi) vide application on 22.09.1991.
Considering the application, the ld. Commissioner required the assessee to provide necessary details as set out in para 5 of the impugned order. It is a matter of record that a reply was filed through the ITBA Portal. Considering the same, the ld. Commissioner observed as under :
6. Reply for above queries was received through ITBA on 31.08.2020 and on 17.09.2020 respectively. The reply submitted by the applicant on 31.08.2020 and 17.09.2020 has duly been considered and following issues emerge:- 1.The applicant has only submitted the list of the trustee/office bearer and their address without their PANs, E-mail address, relationship amongst them and their profession. 2. The applicant has not submitted the details of land and building purchased in last six years along with the copies of Registration of same in the name of the society. 3. In case of society owns land and building/fixed assets, proof of ownership has not been provided. 4. The copies of all the bank statements maintained by the society or by the trustee for last six years have not been provided. 5.This office has specifically asked to provide the complete name and addresses of the person/parties from whom the unsecured loans have been shown in the Balance sheet along with the year-wise payments received highlighting the transaction in the bank statement and interest paid thereon. Confirmation of the parties and their ITRs with Assessing Officer details also required to be furnished by the applicant. But the applicant only submitted the Annexure for Unsecured loans with Name of the persona and amount with any supporting evidences. 6. This office has also asked to corroborate the salary paid with the bank and whether these are as per norms of the state/centre government with the institutes affiliated. But the applicant in the reply only submitted the name of the employee and their address. The onus on the applicant society to submit the all required documents with supporting evidence to prove his genuineness that the society exists solely for education purpose and not for the purpose of profit.
In the light of the above facts considering ground Nos. 6 to 8 raised before us which have been extracted in the earlier part of this order, we deem it appropriate and in the interests of justice to set aside the impugned order directing the ld. CIT(E) to give reasonable and effective opportunity to the ITA-336/CHD/2020 Page 4 of 6 assessee. On a reading of the above, it is evident that part of the information sought was provided, however there definitely was a deficiency in the completeness of information sought.
In the circumstances, we find no good reason on record why the ld. CIT (E) could not have communicated the deficiency noticed to the assessee. An administration/quasi judicial Authority is expected to communicate the same to the assessee and provide an opportunity to make good the shortcoming noticed, if any. Accordingly, the issue is remanded back to overcome this deficiency in the decision making process and a remand is directed.
Before parting, we deem it appropriate to address the specific allegations in the words used in the grounds raised by the assessee in the present appeal. The use of words like “arbitrary, preposterous and capricious” in ground No. 1 and the allegations that “the order suffers from meaningful application of mind ignoring the plethora of information provided to him” is not expected from an Educational Institution or any assessee for that matter. Similar allegation in ground No. 2 that “24 omnibus queries with a view to examine the claim for exemption without looking into their relevance to the facts of the case and thus the order suffers from proper application of mind…..” The allegation and the choice of words on facts are unwarranted as it is not for the assessee to determine the queries to be raised by the CIT (E) while
ITA-336/CHD/2020 Page 5 of 6 passing an order to grant approval. Even otherwise, in case there is any query raised which is alleged to be not relatable or relevant, then the assessee is duty bound to point out the said query. In the absence of any such effort, all queries raised are deemed to be relevant and nece ssary for determining the issues. The assessee is well advised to confine its efforts towards the grievance faced and seek an appropriate remedy in law instead of using carelessly chosen ill advised words making blatant allegations ill supported on facts.
We also deem it necessary to point out that the assertions made in ground No. 4 that the assessee is existing for the purposes of education and not for profit is to be examined by the CIT (E) and any self certification in the ground by the assessee is not relevant. We also note that the observations made in para 6 to 8 of the impugned order clearly demonstrate that ground No. 5 was not maintainable.
The grievance posed in ground number 6 and 8 stands addressed. Since the replies addressed were deficient stands addressed by us, Ground No. 7,accordingly, re1quires no further specific adjudication.
Having so observed the issues, we re mand back the same for fresh appreciation on facts. The assessee in its own interests, it is made clear is expected to participate
ITA-336/CHD/2020 Page 6 of 6 fully and fairly and the ld. CIT(E) shall decide the issues in accordance with law providing the assessee an effective opportunity of being heard. Said order was pronounced in the Open Court at the time of hearing itself.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the Open Court on 28 t h March, 2022.