Kusumba Dhirajlal Parekh&L.N.L.Parekh, Hyderabad V. DIT, Hyderabad

ITA 1193/HYD/2008

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 5918 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 25-02-2010
• Assessment Year: 2008-2009
• Appeal Filed On: 23-06-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: E S NAGENDRA PRASAD
• Assessee Lawyers: DAYAKAR; MANJULATHA
• Keywords: Principle of natural justice
• Section: 80G; 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B , HYDERABAD BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI CHANDRA POOJARI ACCOUNTANT MEMBER ITA NO.: 1193/HYD/2008 ASSTT. YEAR : 2008-09 M/S KUSUMBA DHIRAJLAL PAREKH & LILA NAUTAMLAL PAREKH, HYDERABAD. (PAN AABTK 2963 K) VS DIRECTOR OF INCOME TAX (EXEMPTIONS), HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI DAYAKAR AND SMT. MANJULATHA, RESPONDENT BY : SHRI E.S. NAGENDRA PRASAD, DR O R D E R PER: CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGA INST THE ORDER PASSED BY THE DIRECTOR OF INCOME TAX (EXEMPTIONS), HYDERABAD DATED 3/6/2008 AND PERTAINS TO THE ASSESSMENT YEAR 2008 -09. 2. THE ASSESSEE RAISED THE FOLLOWING GROUNDS: 1. THE ORDER OF THE DIRECTOR OF INCOME TAX (EXEMPTI ONS) IS IN GROSS VIOLATIONS OF PRINCIPLES OF NATURAL JUSTICE AND IS THEREFORE BAD I N LAW. 2. THE DIRECTOR OF INCOME TAX (EXEMPTIONS) HAS ERRED IN REJECTING THE REGISTRATION U/S12A AND 80G OF THE INCOME TAX ACT, 196 1. 3. THE LEARNED AUTHORIZED REPRESENTATIVES FOR TH E ASSESSEE, SUBMITTED THAT U/S 12AA OF THE INCOME TAX ACT, 1961, T HE COMMISSIONER SHALL PASS AN ORDER IN WRITING REFUSING TO G RANT REGISTRATION IN CASE HE IS NOT SATISFIED ABOUT THE OBJECT S OF THE SOCIETY. 2 2 REFERRING TO THE IMPUGNED ORDER, THE LEARNED REPRES ENTATIVES SUBMITTED THAT THE IMPUGNED ORDER WAS PASSED BY THE INCOME TAX OF FICER AND NOT BY THE COMMISSIONER OF INCOME TAX. ACCORDING TO THE LE ARNED REPRESENTATIVES, THE CENTRAL BOARD OF DIRECT TAXES BY NOTIFICATION ASSIGNED THE FUNCTION OF THE COMMISSIONER OF INCOME TAX T O THE DIRECTOR OF INCOME TAX (EXEMPTIONS), WHO IS OF THE RANK OF COM MISSIONER OF INCOME TAX, HAS TO APPLY HIS MIND AND PASS AN ORDER EITH ER GRANTING OR REFUSING TO GRANT REGISTRATION. SINCE NO OFFICER OF TH E RANK OF COMMISSIONER OF INCOME TAX HAS APPLIED HIS MIND, ACCORDIN G TO THE LEARNED REPRESENTATIVES, THE IMPUGNED ORDER PASSED BY THE INCOME TAX OFFICER IS INVALID AND AGAINST THE PRINCIPLES OF LAW. 4. ON THE CONTRARY, THE DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT, IN THIS CASE, THE INCOME TAX OFFICER HAS INTIMATED THE DIRECTION OF THE DIRECTOR OF INCOME TAX (EXEMPTIONS), HYDERABAD TO T HE ASSESSEE THAT THE APPLICATION FURNISHED BY THE ASSESSEE IN FROM 10 A AND FORM 10G ON 30.1.2008 HAVE BEEN REJECTED. AS SUCH, HE SUBMI TTED THAT THIS IS ONLY AN INTIMATION BY THE INCOME TAX OFFICER AFTER PASSING THE ORDER BY THE DIT(E), HYDERABAD. ACCORDINGLY, THE DEPARTMENT AL REPRESENTATIVE SUBMITTED THAT THE ORDER WAS PASSED BY T HE DIT(E), HYDERABAD, WHICH IS A VALID ONE. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE ALSO CAREFULLY GONE THRO UGH THE PROVISIONS OF SEC.12AA OF THE INCOME TAX ACT. AS RIGHTLY POINTED OUT BY THE LEARNED REPRESENTATIVES FOR THE ASSESSEE, THE LEGISLATURE MADE IT VERY CLEAR THAT THE COMMISSIONER SHALL PASS AN ORDER ON THE A PPLICATION OF A TRUST FOR REGISTRATION U/S 12A OF THE INCOME TAX ACT. B EFORE 1-6-1999, THE CHIEF COMMISSIONER HAS TO PASS AN ORDER. HOWEVER, BY FINANCE ACT, 1999, WITH EFFECT FROM 1.6.1999, THE LEGISLATURE THOU GHT IT FIT THAT THE COMMISSIONER HAS TO APPLY HIS MIND AND PASS AN ORDER. SUBSEQUENTLY, 3 3 THE CBDT, IN EXERCISE OF THEIR POWER U/S 119 OF THE IN COME TAX ACT, ASSIGNED THE FUNCTION OF THE COMMISSIONER TO THE DIT(E). IT IS NOT IN DISPUTE THAT THE DIT(E) IS AN OFFICER OF THE RANK OF C OMMISSIONER OF INCOME TAX. IN VIEW OF THIS LEGISLATIVE MANDATE, AND THE NOTIFICATION OF THE CBDT, IN OUR OPINION, THE DIT(E) HAS TO APPLY HI S MIND INDEPENDENTLY AND PASS AN ORDER IN WRITING EITHER GRA NTING OR REFUSING REGISTRATION U/S 12A . SINCE THERE IS NO INDICATION I N THE IMPUGNED ORDER THAT THE DIT(E) HAS APPLIED HIS MIND, IN OUR OPINION, THE MATTER NEEDS TO BE CONSIDERED BY THE DIT(E). ACCORDINGLY, WE SET ASIDE T HE IMPUGNED ORDER DATED 3/6/2008 AND REMIT THE MATTER TO THE FI LE OF THE DIT(E), HYDERABAD. THE DIT(E) SHALL CONSIDER THE ISSUE INDEPENDE NTLY IN ACCORDANCE WITH LAW AND THEREAFTER DECIDE THE SAME ON ME RITS AFTER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON: 25.2.2010 SD/- SD/- N.R.S. GANESAN CHANDRA POOJARI JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 25 TH FEBRUARY, 2010 COPY FORWARDED TO: 1. M/S KUSUMBA DHIRAJLAL PAREKH & LILA NAUTAMLAL PAR EKH, HYDERABAD. 2. DIRECTOR OF INCOME TAX (EXEMPTIONS), HYDERABAD 3. CIT(A)- HYDERABAD. 4. CIT, HYDERABAD 5. THE D.R., ITAT, HYDERABAD.