SHAKTIPADA BHATTARJEE TECHNICAL INSTITUTE,BURDWAN vs. THE COMMISSIONER OF INCOME TAX BURDWAN, BURDWAN

The main grievance of the assessee is against the rejection of the application u/s. 12A and the approval u/s. 80G of the Act. Brief facts of the case is that the assessee society filed an application on 03.04.2013 for registration u/s. 12A of the Act and for approval u/s. 80G(5)(vi) of the Act. However, the Ld. CIT was pleased to reject both the applications on the ground that the enquiry conducted by him could not yield any evidence as to the assessee is engaged in any activity of charity and there was no proof or element of charity in its activity. According to the Ld. CIT, from the enquiry report it appears that the society is engaged only for “Any other object of General Public 2 & 2785/Kol/2013 Shaktipada Bhattacharjee Technical Institute, Utility” and he found fault with the dissolution clause of the Regulation of the Association and he observed that the assessee society could not produce the income and expenditure account for the FY 2012-13 though opportunity was granted to it several times. On these grounds both the applications were dismissed. Aggrieved by the denial of registration u/s. 12A and approval u/s. 80G of the Act, the assessee is before us.

We have heard rival submissions and gone through facts of the case. We note that on the basis of an enquiry report, registration u/s. 12A and approval u/s. 80G of the Act was denied to the assessee society. The main grievance of the assessee is that the said enquiry report has not been given to the assessee so that it could have been able to defend its case. We take note that the assessee has asserted that the P&L Account was produced before the Ld. CIT on 30.09.2013. So, according to ld AR, the Ld. CIT has made a factual error by holding that the assessee failed to produce the P&L Account before him. The assessee also claims to have duly incorporated safeguard in the deed by amendment of Memorandum of Association of the society wherein the dissolution clause of the Regulation of Association takes care of the fund of the society. So, according to the assessee society, the reasons attributed by the Ld. CIT to deny the registration and the approval u/s. 80G of the Act has been erroneously done. We note that the main basis on which the Ld. CIT came to the conclusion that the assessee is not doing any charity was based on an enquiry conducted by him, admittedly behind the back of the assessee and that the assessee was not given a copy of the same. It is true that the Ld. CIT has ample power to conduct enquiry, even a discreet one which is an administrative decision. However, if that report becomes the basis for drawing adverse inference against the assessee then it was incumbent upon the Ld. CIT to have given a copy to the assessee so that it could give its defence/explanation, without doing so the impugned order is fragile for violation of natural justice. Therefore, we are inclined to set aside both the orders (common order) of Ld. CIT and remit the same back to him for de novo consideration of both applications. The Ld. CIT is directed to give a copy of the enquiry report if he is intending to use it against the assessee. With the aforesaid 3 & 2785/Kol/2013 Shaktipada Bhattacharjee Technical Institute, observation, both the applications of assessee are remitted back to the file of Ld. CIT for de novo consideration and the Ld. CIT is directed to decide on both the applications in accordance to law. Appeals of assessee are allowed for statistical purposes.

In the result, appeals of assessee are allowed for statistical purposes.