ALCON FOUNDATION TRUST,PANAJI vs. COMMISSIONER OF INCOME TAX (EXEMPTION), BANGALORE

This appeal has been filed by the appellant Trust against the order of the Commissioner of Income Tax (Exemptions), Bangalore [hereinafter called ‘CIT (E)’] dated 22.03.2018 by which the application of the appellant Trust seeking grant of registration u/s 12A of the Income-tax Act, 1961 (for short, ‘the Act’) has been rejected.

The Registry has issued notice to the appellant for today’s hearing which was properly served on the assessee. Acknowledgement receipt has been placed in the appeal record. Despite proper service of notice for today’s hearing, neither the assessee nor his authorized representative appeared nor any adjournment application has been filed. On perusal of the relevant appeal record, we are of the considered view that the appeal can be disposed of ex parte qua the assessee after hearing the submissions of learned CIT, DR appearing on behalf of the Department. Therefore, we proceed to hear and adjudicate the appeal ex parte qua the assessee.

From the ground, we observe that the main grievance of the assessee is that the learned.CIT(E) has erred in rejecting registration u/s 12A of the Act despite the fact that all the relevant details sought after were available on his record along with the application as well as the submissions made to ITO (Exemptions), Goa. It is also a ground of appeal that the learned CIT(E) has grossly erred in not providing sufficient opportunity to the appellant for submitting his submissions and all relevant details required by him as the learned CIT(E) sought details at almost the end of the period available to him for adjudicating application u/s 12A of the Act. It has also been alleged that the application was filed much before when the case was picked up for adjudication by the learned CIT(E) and, at that point of time, there was sufficient time period available to him to seek and verify all the details submitted by the assessee in support of his application seeking grant of registration u/s 12A of the Act.

The learned CIT, DR vehemently supported the order of the learned CIT(E) and submitted that the registration u/s 12A of the Act is subject to the satisfaction of the authority with regard to the charitable character and with regard to the applicant’s activities in terms of Rule 17A of the Income-tax Rules, 1962. The learned CIT, DR further submitted that only on being satisfied by the competent authority i.e., learned. CIT(E), the registration or renewal u/s 12A of the Act is permissible. The learned CIT, DR contended that the appellant could not produce the required details, therefore, the learned CIT(E) was right in rejecting the application of the appellant for grant of registration u/s 12A of the Act.

On careful consideration of the above rival contentions, first of all, I may point out that on being asked by the Bench, the learned CIT, DR did not controvert the factual position that the appellant filed application for grant of registration u/s 12A of the Act on 22.09.2017 and the learned CIT(E) first time picked up the case for consideration and adjudication on 12.03.2018 and the appellant Trust, vide letter dated 19.03.2018, requested for one month’s time for amendment of the Trust deed and submission of other details. It was also not controverted by the learned CIT, DR that the learned CIT (E) fixed only one date of hearing on which the appellant sought adjournment of one month to comply with the requirements and submission of relevant details before the CIT(E), but, the adjournment was denied and the learned CIT(E) rejected the application of the appellant on 22.03.2018 in a hasty manner without providing due opportunity of hearing to the assessee. We are not inclined to accept the contentions of the learned CIT, DR that since the limitation period was expiring on 31.03.2018, the learned CIT(E) was right in not granting time and adjournment to the assessee as the application seeking registration was filed before more than five months of 22.03.2018.What prevented the learned CIT(E) to take up the matter for adjudication for a period of more than five months ? It is not proper to pass a period of more than five months and, thereafter by only fixing one date and denying adjournment rejecting the application of the assessee at the threshold in the cases where time period of limitation has been prescribed by the Act or Rules made thereunder. In the present case, we are satisfied that the learned CIT (E) has not granted due opportunity of hearing to the assessee to submit amended Trust deed and all other required documents. Therefore, we are inclined to hold that the impugned order has been passed in violation of principles of natural justice. Therefore, the same is not sustainable. The impugned order of the learned CIT(E) is set aside and the matter is restored back to the file of the CIT(E) for fresh adjudication after allowing due opportunity of of hearing to the assessee. The learned CIT(E) is directed to adjudicate the application afresh after allowing due opportunity of hearing to the assessee and without being prejudiced from the earlier impugned order. With these directions, the appeal of the assessee is allowed for statistical purposes.

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