GLOBAL EDUCATION CHARITABLE TRUST,PANCHKULA vs. CIT (EXEMPTIONS), CHANDIGARH

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ITA 533/CHANDI/2023Status: DisposedITAT Chandigarh11 March 2024AY 2023-24Bench: SHRI A.D.JAIN (Vice President), SHRI VIKRAM SINGH YADAV (Accountant Member)5 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the notices were not properly served on the assessee, violating principles of natural justice. The CIT(Exemptions) did not follow the established procedure for communication.

What were the facts?

The assessee, a charitable trust, applied for approval under Section 80G. The CIT(Exemptions) issued several notices for documents, but the assessee failed to comply or appear, leading to an ex-parte order.

What were the issues?

Whether the ex-parte order passed by the CIT(Exemptions) is liable to be set aside due to improper service of notices and violation of natural justice principles.

Which sections of the Income-tax Act were involved?

Section 80G,Section 282

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, CHANDIGARH

Before: SHRI A.D.JAIN & SHRI VIKRAM SINGH YADAV

For Appellant: Shri Nikhil Goel, Advocate &, Smt. Ashisha Mittal,C.A
For Respondent: Shri Rohit Sharma, CIT-DR
Hearing: 22.02.2024Pronounced: 11.03.2024

आदेश/ORDER

PER A.D.JAIN, VICE PRESIDENT

This is assessee's appeal for assessment year 2023-24 against the order dated 05.07.2023 passed by the ld. CIT(Exemptions) Chandigarh. The following grounds have been taken :

1.

Whether order passed by Ld. CIT(E) in Form No. 10AD is liable to be set aside on Principles of Natural Justice? 2. Whether mere uploading of notice on the e-filing portal without following the procedure established under section 282 of the Income Tax Act, 1961 read with ITA 533/CHD/2023 A.Y.2023-24 Page 2 of 5 Rule 127 of the Income Tax Rules, 1962 is bad in law and order, passed thereafter is liable to be set aside? 3. Whether order passed by Ld. CIT(E) in Form No. 10AD is liable to be set aside being in violation of section 80G(5) of the Income Tax Act, 1961 read with Rule 17A of the Income Tax Rules, 1962?

2.

The facts of the case are that the assessee is a Public Charitable Trust and is undertaking charitable activities of social development. The assessee preferred an application for provisional approval under Section 80G of the Income Tax Act, 1961 on 27.09.2022 and the same was allowed on 04.10.2022. Thereafter, the assessee made application for approval u/s 80G on 18.01.2023 by filing Form 10AB. The ld. CIT (Exemptions) issued notices of hearing and enquiry on 27.03.2023, 12.05.2023, 01.06.2023 and 16.06.2023 to the assessee to furnish relevant documents/proofs to assess the genuineness of the activities of the Trust as the documents provided by the assessee were not sufficient, but the assessee was unable to comply with the notices. The assessee did not appear before the ld. CIT(Exemptions). Neither any submissions were filed nor any request for the adjournment was made. Therefore, the ld. CIT(Exemptions) passed ex-parte order against the assessee dismissing the ITA 533/CHD/2023 A.Y.2023-24 Page 3 of 5 appeal of the assessee, against which, the assessee is in appeal before this Tribunal.

4.

We have heard the rival submissions and have perused the material available on record. We have found that the notices dated 27.03.2023 and 12.05.2023 were uploaded on the e-filing portal and no intimation through electronic mode or post was made for the same. The notices dated 01.06.2023 and 16.06.2023 were served on the e-mail ID kanchansehgal786@qmail.com that did not belong to the assessee. The e-mail id mentioned on the e- filing portal vikramrana@vapour.in was correct and belonged to one of the trustees of the assessee. The e-mail ID kanchansehgal786@gmail.com was not mentioned on the portal. The assessee had not mentioned the same in Form 10A and Form 10AB at the time of registration for the purpose of communication. The matter now stands covered by the decision of the Hon'ble jurisdictional High Court in the case of Munjal BSU Centre of Innovation and Entrepreneurship, Ludhiana through its authorized signatory Shri Bharat Goyal Vs Commissioner of Income Tax (E), Chandigarh” in CWP 21028-2023 (O&M), wherein, vide order dated 04.03.2024, their Lordships have held

ITA 533/CHD/2023 A.Y.2023-24 Page 4 of 5 that the provisions of Section 282(1) of the Income Tax Act and Rule 127(1) of the Income Tax Rules, 1962, envisage that it is essential that before any action is taken, a communication of the notice must be in terms of these provisions; that these provisions do not make mention of communication to be “termed” by placing the notice on the e-portal of the Department; that an pragmatic view has always to be adopted in these circumstances; that an individual or a company is not expected to keep the e- portal of the Department open all the times so as to have knowledge of what the Department is supposed to be doing with regard to the submissions of forms, etc.; and that the principles of natural justice are inherent in the Income Tax provisions and the same are required to be necessarily followed.”

5.

In the facts and circumstances of the case, we are of the considered opinion that the assessee was not afforded proper and reasonable opportunity of being heard.

Therefore, in the interest of justice, the file is restored to the file of ld. CIT(Exemptions) to decide the matter afresh in accordance with law after giving a reasonable opportunity of being heard to the assessee. The assessee,

ITA 533/CHD/2023 A.Y.2023-24 Page 5 of 5 no doubt, shall cooperate in the fresh proceedings before the CIT(Exemptions).

6.

In the result, the appeal of the assessee is allowed for statistical purposes.

Order pronounced on 11th March,2024.

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