NAV PRERNA SOCIETY,REWARI vs. CIT(EXEMPTION), CHANDIGARH

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ITA 1647/DEL/2023Status: DisposedITAT Delhi27 September 2023Bench: SHRI SHAMIM YAHYA (Accountant Member), SHRI KUL BHARAT (Judicial Member)4 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the CIT(Exemption) is empowered to make inquiries but must provide an adequate opportunity of hearing. To uphold natural justice, the impugned order was set aside and the application was restored to the CIT(Exemption) for fresh decision.

What were the facts?

The assessee filed an application for registration under Section 80G(5). The CIT(Exemption) rejected the application ex-parte due to the assessee's non-representation. The assessee claimed they did not receive the notice.

What were the issues?

Whether the rejection of the 80G(5) registration application without effective communication of notice and proper opportunity of hearing violates principles of natural justice.

Which sections of the Income-tax Act were involved?

Section 80G(5)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI “E” BENCH: NEW DELHI

Before: SHRI SHAMIM YAHYA & SHRI KUL BHARAT

For Appellant: Shri Jatin Saini, CA
For Respondent: Ms. Samita Singh, Sr.DR
Hearing: 25.09.2023Pronounced: 27.09.2023

PER KUL BHARAT, JM :

1.

The present appeal filed by the assessee is directed against the order passed by Ld.CIT(Exemption), Chandigarh dated 08.05.2023 for the assessment year NIL.

2.

The assessee has raised following grounds of appeal:-

1. “That the orders passed on 08.05.2023 vide Form 10AD (See rule 2C or 11AA or 17A) by the learned Commissioner of Income-tax (Exemptions), Chandigarh (hereinafter referred to as the 'CIT(E)'], has been arbitrary and unjust in denying the registration application for registration u/s 80G(5) of the Act under section 80G ex-party without give proper opportunity through proper mode of communication.

2. That the learned CIT(E), Chandigarh has erred both in law and on facts in rejecting application for seeking registration U/S 80G(S) of the Act filed by the appellant Charitable Trust, solely on the basis of absence of the requisite submissions of the appellant in response to the letter issued by Ld. CIT(E) while the fact is that such letter was uploaded by Ld. CIT(E) only on E-Filling portal without communicating through registered E-Mail, SMS on registered mobile and /or postal service which is gross violation of natural justice.

3. That in any view of the facts and circumstances of the case of the appellant Charitable Trust it is entitled for grant of registration U/S 80G(5) of the Act, which be kindly granted.

4.

The Appellant craves the leave to add, amend, alter and/or delete any of the above grounds of appeal

at/or before the time of hearing as the circumstances of the case may require or justify.”

3. Facts giving rise to the present appeal are that the assessee filed an application for approval u/s 80G(5) of the Income Tax Act, 1961 (“the Act”). The Assessing Officer (“AO”) issued notice to the assessee but there was no representation on behalf of the assessee. Therefore, Ld.CIT(E) rejected the application of the assessee.

4. Aggrieved against this, the assessee preferred appeal before this Tribunal.

5.

At the outset, Ld. Counsel for the assessee submitted that the assessee did not receive notice and there was a reasonable cause on failure to represent before Ld.CIT(E). He contended that an opportunity be provided to the assessee in the interest of natural justice. In this regard Ld. Counsel for the assessee has placed reliance on the decision of the Co-ordinate Bench of the Tribunal in the case of Sant Kabir Mahasabha vs The CIT(Exemption) in ITA No.84/Chd./2023 for Assessment Year 2022-23 order dated 23.08.2023.

6.

On the other hand, Ld. Sr. DR opposed these submissions and supported the orders of the authorities below. Ld. Sr. DR contended that it was incumbent upon the assessee to answer the queries raised by the Ld.CIT(E) and Ld.CIT(E) is empowered to make such inquiry for verification of genuineness of the activities of the assessee.

7.

We have heard Ld. Authorized Representatives of the parties and perused the material available on record. There is no dispute with regard that there was no effective representation on behalf of the assessee before Ld.CIT(E). Further, there is no dispute with regard to the fact that Ld.CIT(E) is empowered to make such inquiry to satisfy himself about the genuineness of this activity of the society/trust. Before granting approval u/s 80G(5) of the Act in the present case, however, Ld.CIT(E) is required to give adequate opportunity of hearing to the assessee. To sub-serve the interest of principle of natural justice, we therefore, set aside the impugned order and restore the application of the assessee to the file of Ld.CIT(E) to decide it afresh. The assessee is hereby, directed not to seek adjournment without any reasonable cause. Grounds raised by the assessee are accordingly, allowed for statistical purposes.

8.

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

Order pronounced in the open Court on 27th September, 2023.

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