PARVATI FOUNDATION,GHAZIABAD vs. COMMISSIONER OF INCOME TAX (E), LUCKNOW

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ITA 652/LKW/2019Status: DisposedITAT Lucknow04 August 20223 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT erred by not providing the assessee with an opportunity to be heard before rejecting the application, which violates the principles of natural justice. The matter was therefore remitted back to the CIT for a fresh decision.

What were the facts?

The assessee society applied for registration under section 12A(1) of the Income Tax Act. The CIT (Exemptions) rejected the application without providing an opportunity to the assessee to present its case.

What were the issues?

Whether the CIT properly rejected the application for registration without affording the assessee an opportunity to be heard. Whether the assessee provided sufficient documentation to prove the genuineness of its activities and trust deed.

Which sections of the Income-tax Act were involved?

Section 12A(1),Section 12AA(1)(a)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, LUCKNOW BENCH “A”, LUCKNOW

Before: SHRI. A. D. JAIN & SHRI T. S. KAPOOR

For Appellant: Shri Sudhir Kumar Tiwari, Advocate
For Respondent: Smt Sheela Chopra, CIT (DR)

PER A.D. JAIN, V.P.: This is assessee’s appeal against the order of ld. CIT (Exemption), Lucknow, dated 24.7.2019, passed under section 12AA(1)(b)(ii) of the Income Tax Act, 1961, rejecting the application for registration under section 12A(1) of the Act. 2. The brief facts of the case are that the assessee society filed an application for registration under section 12A(1) of the Act of the Act on 29.1.2019 with the CIT (Exemptions), Lucknow. The ld. CIT (Exemptions) rejected the application. 3. The ld. Counsel for the assessee has contended that the ld. CIT (E) has not provided any opportunity to the assessee before passing the impugned order, wrongly rejecting the application filed by the assessee for registration under section 12AA of the Act.

4. The ld. D.R. has placed strong reliance on the impugned order.

5.

It is seen that the ld. CIT (E) has, while rejecting assessee’s application for registration under section 12AA of the Act, observed, inter alia, as follows: “3. On perusal of the material available on record, it is observed that:- a. The applicant has not produced original trust deed and other relevant documents required for verification to prove the objects of the trust and the genuineness of the activities. b. No proof/documents regarding charitable activities have been submitted by the applicant. c. No books of accounts were produced or details of the expenditure have been submitted for verification.

4.

The section I2AA(1) (a) of the Income-Tax Act, 1961 states that "The Commissioner shall call for such documents or information from the trust or institution as he thinks necessary in order to satisfy himself about the genuineness of the trust or institution". Thus it becomes imperative on the part of the applicant society to provide corroborating evidences that form the satisfaction regarding the genuineness of the activities of the applicant which is mandated by law. In the absence of such satisfaction, the applicant loses its eligibility for consideration for according the said registration.

1.

5. From the forgoing discussion, it is seen that the applicant has not chosen to file the details required and so it is presumed that the applicant has nothing to say in this regard. Therefore, the registration u/s I2AA cannot be granted for want of required information.”

6.

It is evident from the above that no opportunity, before passing the order under appeal, was granted by the ld. CIT (E) to the assessee. This is wholly against the settled principle of natural justice that no one can be condemned unheard. In view of the above, the matter is remitted to the ld. CIT (E) to be decided afresh in accordance with law, within a period of two months from the date of receipt of this order, on affording due and adequate opportunity to the assessee to present its case. The assessee, no doubt, shall co-operate in the fresh proceedings before the ld. CIT (E).

7.

In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 04/08/2022.

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