NYSASDRI, Bhubaneswar V. CIT, Bhubaneswar

ITA 124/CTK/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4349 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 23-06-2011
• Assessment Year: 2009-2010
• Appeal Filed On: 08-04-2010
• Court: TRIBUNAL
• Department Lawyers: A K PATRA
• Assessee Lawyers: J M PATTANAIK
• Keywords: Principle of natural justice
• Section: 80G

Judgement Text

IN THE INCME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE : HONBLE SHRI K.K.GUPTA, ACCOUNTANT MEMBER, AND HONBLE SHRI K.S.S.PRASAD RAO, JUDICIAL MEMBER. ITA NO. 124/CTK/2010 (ASSESSMENT YEAR 2009 - 10) NYSASDRI, AT: NARAYANI VIP ENCLAVE, FL AT NO.301, VIP AREA, IRC VILLAGE, NAYAPALLI, BHUBANESWAR 751 015 VERSUS COMMISSIONER OF INCOME - TAX, BHUBANESWAR (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI J.M.PATTANAIK, AR FOR THE RESPONDENT SHRI A.K.PATRA, DR ORDER SHRI K.S.S.PRASAD RAO, JUDI CIAL MEMBER : THIS APPEAL IS FILED BY THE ASSESSEE HAVING BEEN AGGRIEVED BY THE ORDER OF THE COMMISSIONER OF INCOME - TAX, BHUBANESWAR DT.27.1.2010 IN REJECTING THE APPLICATION DT.29.6.2009 SEEKING CONTINUANCE OF APPROVAL U/S.80G OF INCOME - TAX ACT,1961. 2. T HE ASSESSEE HAS RAISED THE FOLLOWING ISSUES IN ITS GROUNDS OF APPEAL. (I) FOR THAT, THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT, BBSR HAS TRAVELED BEYOND THE RESTRICTIONS PROVIDED IN RULE - 11AA(5) TO REFUSE REGISTRATION U/S. 80G OF THE I.T. ACT ON IRRE LEVANT CONSIDERATIONS. (II) FOR THAT, THE LD. CTI, BBSR OUGHT N OT TO HAVE CONSIDERED THE INDIVIDUAL ASSETS AND PROPERTIES OF THE DIRECTOR AND HIS FAMILY MEMBERS TO HAVE SIPHONED OUT FROM THE FUNDS OF THE ORGANISATION WITHOUT ESTABLISHING THE FACTS, FR OM RECORDS SUBMITTED. (III) THAT, THE LD. CIT(BBSR) SHOULD NOT HAVE RESORTED TO PRESUMPTIONS AND ASSUMPTIONS WHILE REFUSING FOR C ONTINUANCE OF APPLICATION U/S.80G OF THE I.T. ACT. (IV) FOR THAT, THE FUNDS OF THE ORGANISATION WAS SIPHONED BY THE DIRECTOR TO BE CONVERTED AS HIS PERSONAL ASSETS WITHOUT CONCRETE EVIDENCE BROUGHT OUT IN THE ORDER OF REFUSAL. (V) THAT, THE LD. CIT, BBSR HAS FAILED TO RECORD ANY INSTANCE IN THE ORDER IN WHICH THE DONATIONS RECEIVED WERE UTILISED FOR OTHER THAN CHARITABLE PURPOS ES. ITA NO.124/CTK/2010 2 (VI) FOR THAT, THE LD. CIT, BBSR SHOULD HAVE ALLOWED REGISTRATION OF THE ORGANISATION U/S. 80G OF THE I.T. ACT. (VIII) FOR THAT, ANY OTHER GROUNDS INCIDENTAL T O THE GROUNDS OF THIS CASE MAY KINDLY BE PERMITTED TO URGE AT THE TIME OF HEARING OF THE CA SE. (IX) FOR THAT, ANY OTHER EVI DENCES INCIDEN TAL TO THE GROUNDS OF THIS CASE MAY KINDLY BE PERMITTED TO ADDUCE AT THE TIME OF HEARING OF THE CASE. 3. BOTH THE PARTIES WERE HEARD REGARDING THE ISSUES RAISED BY THE ASSESSEE AND THEIR LEGAL IMPLICATIONS. 4. ON CAREFUL CONSIDERATION OF THE MATERIAL MADE AVAILABLE TO THE TRIBUNAL THE UNDISPUTED FACTS RELATING TO THE ISSUES ARE THAT THE ASSESSEE IS A VOLUNTARY ORGANIS ATION, COMMITTED TO THE SOCIAL U PLIFTMENT OF THE RURAL POOR, RUNS AND MAINTAINS PRIMARY HEALT H CENTERS, EYE HOSPITALS EDUCATIONAL FACILITIES, AND HORTICULTURAL ACTIVITIES FOR THE SUPPORT AND GENERATING EMPLOYMENT AVENUES FOR PEOPLE IN THE UNDERDEVELOPED AREAS OF BOTH KBK DISTRI CTS AND A FEW COASTAL DISTRICTS AND RECEIVES FINANCIAL SUPPORT FROM THE GOVT. OF ORISSA, GOVT. OF INDIA AND INTERNATIONAL PHILANTHROPIC ORGANISATION FROM EUROPEAN AND AMERICAN CONTINENTS. I T ALSO RECEIVES DONATIONS FROM DIFFERENT SOURCES. THE ASSESSEE WAS REGISTERED UNDER THE S OCIETIES OF REGISTRATION ACT AND WAS ALSO REGISTE RED AS AN INSTITUTION U/S. 12 A OF THE I.T. ACT, BY THE COMMISSIONER OF INCOME TAX, BHUBANESWAR AND THE SAID C.I.T., BHUBANESWAR HAS ACCORD EXEMPTION CERTIFICATE U/S.80G OF THE I.T. ACT W.E.F. ASST. YEAR:2003 - 04 AS PER RECORD TILL ITS REJECTION BY THE IMPU GNED ORDER DT.27.1.2010. AGGRIEVED, THE ASSESSEE FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 5. DURING THE COURSE OF HEARING, THE LEARNED AR OF THE ASSESSEE APART FROM REITERATING THE ISSUES RAISED IN THE GROUNDS OF APPEAL HAS SUBMITTED THAT ITA NO.124/CTK/2010 3 THE IMPUGNED ORDER PASSED BY THE LEARNED CIT IS UNSUSTAINABLE FOR LEGAL SCRUTINY INSOFAR AS IT WAS PASSED BY THE CIT WITHOUT FOLLOWING THE PROCEDURE LAID DOWN IN LAW. HE FURTHER SUBMITTED THAT THE CIT HAVING ISSUED NOTICE DT. 24.12.2009 REQUIRING THE ASSESSEE TO ESTABL ISH THE TRUTH OR OTHERWISE OF THE FACTS THAT WAS CONFRONTED TO THE ASSESSEE. THE ASSESSEE SOUGHT FOR ADJOURNMENT STATING INTERALIA THAT THE ASSESSEE WAS UNABLE TO SUBMIT ALL THE DETAILS AS THE CONCERNED ACCOUNTANT WAS ON LEAVE DUE TO HIS PERSONAL PROBLEM. HENCE, IT SOUGHT FOR TIME OF ONE MONTH TO SUBMIT ALL THE DETAIL EXPLANATION TO THE LETTER DT.24.12.2009 ISSUED BY THE CIT. BUT THE LEARNED CIT HAS PASSED THE ORDER ON 27.1.2010, THEREFORE, CLEARLY VIOLATES THE PROVISIONS CONTAINED IN THE PROVISO TO RULE (5 ) OF RULE 11AA OF THE INCOME - TAX RULES IN WHICH THE APPLICATION FOR GRANT OF PERMISSION U/S.80G HAS TO BE CONSIDERED. THEREFORE, HE PRAYED FOR SETTING ASIDE THE ORDER OF THE IMPUGNED ORDER PASSED BY THE LEARNED CIT BY ALLOWING THE APPEAL OF THE ASSESSEE. 6 . CONTRARY TO THIS, THE LEARNED DR HAS VEHEMENTLY ARGUED SUPPORTING THE IMPUGNED ORDER OF THE LEARNED CIT. 7. ON CAREFUL ANALYSIS OF THE ORDER PASSED BY THE LEARNED CIT, IT IS FOUND THAT THE LEARNED CIT AFTER ISSUING NOTICE OF HEARING OF APPLICATION FOR CO NTINUANCE OF APPROVAL U/S.80G OF THE I.T.ACT, ASKED THE ASSESSEE TO GIVE THE DETAILS VIDE LETTER DT.24.12.2009 INCLUDING THEREIN THE INFORMATION COLLECTED BY THE LEARNED CIT THROUGH HIS OFFICE ABOUT VARIOUS ASPECTS REQUIRED TO BE CLARIFIED BY THE ASSESSEE. THE ASSESSEE HAS PRAYED FOR TIME OF ONE MONTH FOR GIVING REPLY TO THAT LETTER AS THE ACCOUNTANT ON THE JOB WAS ON LEAVE ON HIS PERSONAL WORK. BUT THE LEARNED CIT HAS NOT GIVEN ANY TIME TO THE ASSESSEE AND PASSED THE IMPUGNED ORDER DT.27.1.2010 BY TAKING I NTO CONSIDERATION ALL THE INFORMATION THAT HE CULLED OUT THROUGH HIS OFFICE BUT WITHOUT GIVING OPPORTUNITY TO THE ASSESSEE TO EXPLAIN THE SAME. HENCE, WE ARE OF THE ITA NO.124/CTK/2010 4 CONSIDERED VIEW THAT THE IMPUGNED ORDER PASSED BY THE LEARNED CIT(A) IS ON UTTER DEROGATION TO THE PRINCIPLES OF NATURAL JUSTICE EXPEC TED TO BE FOLLOWED BY THE QUASI - JUDICIAL AUTHORITIES UNDER THE INCOME - TAX ACT INCLUDING CIT . HENCE, WE CONSIDER IT FIT TO SET ASIDE THE IMPUGNED ORDER OF THE LEARNED CIT AND RESTORE THE MATTER TO HIS FILE FOR DE N OVO CONSIDERATION OF THE APPLICATION OF THE ASSESSEE SEEKING CONTINUANCE OF APPROVAL U/S.80G, AFTER RECEIVING THE EXPLANATION FROM THE ASSESSEE TO THE LETTER DT.24.12.2009 ISSUED BY HIM AND PASS NECESSARY CONSEQUENTIAL ORDER AFTER AFFORDING OPPORTUNITY OF HEARING TO THE ASSESSEE. THE ASSESSEE IS ALSO DIRECTED TO FILE THE REPLY TO THE LETTER OF THE LEARNED CIT DT.24.12.2009 WITHIN A REASONABLE TIME AND COOPERATE WITH THE LEARNED CIT FOR EARLY DISPOSAL OF THE APPLICATION. WE DIRECT ACCORDINGLY. 8. IN THE RESU LT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN OPEN COURT ON DT. 30 TH JUNE, 2011 S D / U/S.40(A)(IA) S D/ - (K.K.GUPTA) ACCOUNTANT MEMBER (K.S.S.PRASAD RAO) JUDICIAL MEMBER DATE: 30 TH JUNE, 2011 H.K.PADHEE, S ENIOR PRIVATE SECRETARY. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT: NYSASDRI, AT: NARAYANI VIP ENCLAVE, FLAT NO.301, VIP AREA, IRC VILLAGE, NAYAPALLI, BHUBANESWAR 751 015 2. THE RESPONDENT: COMMISSIONER OF INCOME - TAX, BHUBANESW AR 3. THE CIT, 4. THE CIT(A), 5. THE DR, CUTTACK 6. GUARD FILE (IN DUPLICATE) TRUE COPY, BY ORDER, SENIOR PRIVATE SECRETARY.