DE PAUL EDUCATIONAL SOCIETY,ELURU vs. INCOME TAX OFFICER (EXEMPTION), RAJAHMUNDRY

In this appeal, there is a delay of 152 days in filing the instant appeals before the Tribunal. The assessee has filed condonation petition. However, as per the decision of the Hon’ble Supreme Court in SMW(A) No.3 of 2020, the period of limitation for filing the appeals under general laws and all special laws falling between 15/3/2020 and 28/02/2022 shall be excluded for calculating the delay. Considering the same, we hereby condone the delay of 152 days in filing the present appeal before the Tribunal and proceed to adjudicate the case on merits.

In this appeal the assessee has raised the following concise of grounds of appeal:

Brief facts of the case are that the assessee is an educational society registered under Societies Registration Act XXI of 1860 with Reg No.215/1994. The assessee filed an appeal in Form 10A seeking registration U/s. 12A of the Income Tax Act, 1961 on 25/05/2020. Subsequently, the a notice dated 6/7/2020 was issued to the assessee through ITBA portal as well as speed post to submit its Memorandum of Association/Trust Dee for verification. In response the assessee has furnished certain documents and evidence as called for by the Ld. CIT(Exemptions). On perusal of the documents furnished by the assessee, the Ld. CIT(E) found some discrepancy and therefore the assessee was asked to furnish the details of donations & contributions received with full particulars, receipt books, copy of returns of income filed, computation of income, complete books of accounts, PAN particulars of office bearers for verification vide letter dated 6/67/2020 and 10/02/2021. In the absence of any books of account, documentary evidence and proper explanation in support of the assessee’s claim, the Ld. CIT

At the outset, the Ld. AR submitted before us that the Ld. CIT (E) has passed the order without providing proper opportunity to the assessee of being heard. The Ld. AR further submitted that if the assessee had been provided a physical hearing / virtual hearing before denying the assessee’s application for registration U/s. 12A of the Act, the assessee would have presented his case effectively along with the supportive documents. It was therefore pleaded that the matter may be remitted back to the file of the Ld CIT (E) in order to provide one more opportunity to the assessee of being heard. Ld. DR, on the other hand, vehemently opposed to the submissions of the Ld. AR and argued that sufficient opportunities had been provided to the assessee however, the assessee could not substantiate its claim for registration U/s. 12A of the Act with cogent documentary evidence. It was further submitted that the Ld. CIT (E) had no other option but to pass order based on the materials available on record. Hence, it was pleaded that the order passed by the Ld. CIT(E) does not call for any interference.

We have heard the rival submissions and carefully perused the materials on record. On examining the facts of the case, we of the view that if the Ld. CIT (E) finds any discrepancy in the MoA filed by the assessee, wants to clear off his doubts and needs any further documents from the assessee, the assessee should have been given a proper opportunity of being heard physically / virtually to substantiate its claim with supporting documentary evidence following the principles of natural justice. But the Ld. CIT (E) decided the case and denied the grant of registration U/s. 12AA of the Act only based on the documentary evidence whatsoever is available on record. In this situation, we find strength in the arguments advanced by the ld. AR. Therefore, considering the prayer of the Ld. AR, and in the interest of justice, we hereby remit the matter back to the file of Ld. CIT (E) in order to consider the appeal afresh on merits by providing one more opportunity to the assessee of being heard. At the same breath, we also hereby caution the assessee to promptly co-operate before the Ld. CIT (E) in the proceedings failing which the Ld. CIT (E) shall be at liberty to pass appropriate order in accordance with law and merits based on the materials on the record. It is ordered accordingly.

In the result, appeal filed by the assessee is allowed for statistical purposes as indicated hereinabove.

Visakhapatnam गधर्ा फ़धईऱ / Guard file 6. आदेशधनुसधर / BY ORDER