Hartek Foundation, Mohali V. CIT (Exemptions), Chandigarh

ITA 124/CHANDI/2023

AI Insights

Hartek Foundation appealed against the orders of the CIT (Exemptions), Chandigarh, which had rejected their applications for registration under sections 12AB and 80G(5) of the Income Tax Act, 1961. The appeals were initially delayed due to an error in the deposit of the appeal fee, which was later rectified. The Tribunal noted that the CIT (E) had dismissed the applications solely on the grounds of non-prosecution without examining the substantive merits or the materials provided by Hartek Foundation. The Tribunal emphasized the need for a decision on merits and adherence to the principles of natural justice, thus remanding the cases for a fresh hearing.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 127815 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 23-05-2023
• Assessment Year: 2022-2023
• Appeal Filed On: 05-03-2023
• Other Referred Cases: S. Velu Palandar Vs. DCIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 12AA

Judgement Text

आयकर अपील य अ धकरण,च डीगढ़ यायपीठ, च डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH, ‘A’, CHANDIGARH BEFORE SHRI A.D. JAIN, VICE PRESIDENT & SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER आयकर अपील सं./ ITA Nos. 124 & 125/Chd/2023 नधा रण वष / Assessment Year : 2 0 2 2 - 2 3 Hartek Foundation, Hartek Tower, F-321, Phase 8B, Industrial Area, Mohali Punjab Vs. बनाम The CIT (Exemptions), Chandigarh थायी लेखा सं./PAN NO: AAFCH6347F अपीलाथ /Appellant यथ /Respondent नधा रती क ओर से/Assessee by : Sh. Parikshit Aggarwal, CA राज व क ओर से/ Revenue by : Sh. Rohit Sharma, CIT DR स ु नवाई क तार$ख/Date of Hearing : 24.05.2023 उदघोषणा क तार$ख/Date of Pronouncement : 26.05.2023 आदेश/Order Per A.D. Jain, Vice President: These are Assessee’s appeals against the respective orders dated 16.01.2023 and 18.01.2023 of the ld. CIT (Exemptions), Chandigarh for A.Y. 2022-23. 2. There is a delay of 63 days in filing both the appeals. The Assessee, vide its two separate Applications for condonation of delay, dated 23.05.2023 and 29.5.2023 respectively had submitted that the delay in filing the appeals was caused on account of deposit of Appeal Fee in wrong head, i.e., deposited under minor head ‘Other Receipts (500)’ instead of minor head ‘Self-Assessment Tax (300)- 124 & 125-Chd-2023 – Hartek Foundation, Mohali 2 Others’, which mistake was rectified in both the cases by re- depositing the Appeal fee though fresh challans in the appropriate head, perceiving that correction of heads of challans may take an inordinate time. It has been submitted that the delay caused was totally unintentional and bonfide on the part of the appellant. A request is made by the Assessee to condone the delay in both the appeals in the interest of natural justice. 3. We have considered the facts and reasoning furnished by the Assessee. In view of the detailed explanation and reasoning given by the Assessee, finding that the Assessee was prevented by sufficient cause from filing the Appeals in time, and keeping in view the principle of natural justice, the delay of 63 days in filing the appeals in both the cases is condoned. 4. Since the issues involved in both the appeals are identical, they have been heard together and are being disposed of by this common order. ITA No. 124/Chd/2023 is taken as a lead case for narration of facts. In this appeal, the Assessee has taken following grounds of appeal: ITA No.124/Chd/2023 1. That on the facts, circumstances and legal position of the case, the Worthy CIT(E) has erred in rejecting registration application moved u/s 12AB even when the appellant was fully eligible: for the same. 124 & 125-Chd-2023 – Hartek Foundation, Mohali 3 2. That on law, facts and circumstances of the case, the order passed by Worthy CIT(E) deserves to be quashed since the same has been passed without affording reasonable opportunity of being heard to the appellant. 3. That the appellant craves leave for any addition, deletion or amendment in the grounds of appeal on or before the disposal of the same. 5. Briefly, the facts of the case are that the Assessee filed an application for registration u/s 12A(1)(ac)(iii) of the Income Tax Act, 1961 (hereinafter called 'the Act') on 30.09.2022. In order to examine and verify the objects of the Assessee Trust and the genuineness of its activities, a detailed questionnaire was issued electronically to the Assessee on 10.11.2022 requiring the Assessee to furnish the details and documents on-line through e-proceedings on e-filing portal, by 25.11.2022. However, the Assessee neither furnished any submissions nor requested for adjournment in this behalf. Later on, opportunities were also granted on the Assessee through letter issued on 13.12.2022 for furnishing reply by the date fixed, i.e., 21.12.2022 and thereafter, a final opportunity was afforded to the Assessee vide letter dated 28.12.2022, fixing the matter on 04.01.2023. However, no compliance in any form was made by the Assessee on the aforesaid occasions. The ld. CIT (E) observed that in the absence of any submissions made by the Assessee, it is very difficult to verify both the nature of objects and the genuineness of the activities of the 124 & 125-Chd-2023 – Hartek Foundation, Mohali 4 applicant and concluded that the queries raised had not been answered satisfactorily by the Assessee. The ld. CIT(E), by placing reliance on various case laws, has rejected the application of the Assessee for registration u/s 12AB of the Act, observing that this rejection and consequent lack of registration will apply for the F.Y. 2022-23 onwards and will also supersede any registration granted u/s 12AB or 12AA of the Act by any authority at any earlier time. 6. At the outset, it has been submitted by the ld. Counsel for the Assessee that the ld. CIT(E) has dismissed the appeal of the Assessee without going into the merits of the case and even without considering the material available on record. It has further been submitted that the order passed by the ld. CIT(A) is a non-speaking order. It is prayed that keeping in view the principles of natural justice, the Assessee may be given a reasonable opportunity of hearing of the appeal before the ld. CIT(E) and the appeal may be directed to be decided on merits. 7 The ld. DR, on the other hand, has placed reliance on the order of the ld. CIT(E). 8. Heard. We have gone through the order of the ld. CIT(E), wherein, the appeal of the Assessee has been dismissed merely on the basis of the non-prosecution by relying on various decisions. We find that the ld. CIT (E), Chandigarh has dismissed the appeal without 124 & 125-Chd-2023 – Hartek Foundation, Mohali 5 considering the material available on record, as also without going into the merits of the case. As such, an opportunity of hearing requires to be given to the assessee to represent his case fully before the ld. CIT(E). Even otherwise, it is trite [‘S. Velu Palandar Vs. DCIT’ 83 ITR 683 (Mad.)] and incumbent on the authority to decide an appeal on merit. 9. In view of the above, finding force in the grievance raised by the Assessee, the matter is remitted to the file of the ld. CIT (E), to be decided afresh on merit, in accordance with law, on affording due and adequate opportunity of hearing to the assessee. The assessee, no doubt, shall cooperate in the fresh proceedings before the ld. CIT (E). All pleas available under the law shall remain so available to the assessee. Ordered accordingly. ITA No. 125/Chd/2022 10. The Assessee in this appeal has taken following grounds of appeal: 1. That on the facts, circumstances and legal position of the case, the Worthy CIT(E) has erred in rejecting registration application moved u/s 80G(5) even when the appellant was eligible for the same. 2. That on law, facts and circumstances of the case, the order passed by Worthy CIT(E) deserves to be quashed since the same has been passed without affording reasonable opportunity of being heard to the appellant. 124 & 125-Chd-2023 – Hartek Foundation, Mohali 6 3. That the appellant craves leave for any addition, deletion or amendment in the grounds of appeal on or before the disposal of the same. 11. The Assessee filed an application dated 30.09.2022 for approval under section 80G(5) of the Act. The ld. CIT(E), however, declined the request for grant of approval moved under section 80G(5) vide order dated 18.01.2023 in the absence of any registration under section 12AB or 10(23)/10(23C) by observing that it did not meet the requirement for approval as mandated by section 80G(5) of the I.T. Act. 12. Our findings recorded while disposing of ITA No. 124/Chd/2023 are mutatis-mutandis, squarely applicable to the present appeal also and this appeal is also disposed in the same terms. 13. In the result, for statistical purposes, both the appeals are treated as allowed. Order pronounced on 26.05.2023. Sd/- Sd/- (VIKRAM SINGH YADAV) ( A.D. JAIN ) Accountant Member Vice President Dated : 26.05.2023 “आर.के.” आदेश क त*ल+प अ,े+षत / Copy of the order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent 3. आयकर आय ु 1त/ CIT 4. +वभागीय त न5ध, आयकर अपील$य आ5धकरण, च7डीगढ़/ DR, ITAT, CHANDIGARH 124 & 125-Chd-2023 – Hartek Foundation, Mohali 7 5. गाड फाईल/ Guard File आदेशान ु सार/ By order, सहायक पंजीकार/ Assistant Registrar