Jain Amar Foundation, Ludhiana V. CIT(E), Chandigarh

ITA 1487/CHANDI/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 4295 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-05-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 01-03-2021
• Assessment Year: misc
• Appeal Filed On: 19-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C CHANDRAKANTA
• Assessee Lawyers: S C JAIN
• Keywords: Opportunity of being heard; Principle of natural justice; Condonation of delay; Set aside; Audi alteram partem
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, A, CHANDIGARH BEFORE SHRI N.K. SAINI, VICE PRESIDENT & SHRI R.L NEGI, JUDICIAL MEMBER ./ ITA NOS. 1487/CHD/2019 [ [ / U/S 12AA (1)(B)(II) JAIN AMAR FOUNDATION, 992/1, PIPAL BUILDING, CHAWAL BAZAR, LUDHIANA THE CIT (E ), CHANDIGARH ./ PAN NO: AADCJ9918L / APPELLANT / RESPONDENT HEARING THROUGH VIDEO CONFERENCING [ / ASSESSEE BY : SHRI S.C. JAIN, CA / REVENUE BY : SMT. C. CHANDRAKANTA, CIT (DR) / DATE OF HEARING : 01.03.2021 / DATE OF PRONOUNCEMENT : 24.05.2021 / ORDER PER R.L. NEGI, JUDICIAL MEMBER: THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 19.09.2019 PASSED BY COMMISSIONER OF INCOME TAX (EXEMPTIONS), CHANDIGARH [FOR SHORT THE CIT(E)] U/S12AA(1)(B)(II) OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT) WHEREBY THE LD. CIT(E) HAS DISMISSED THE APPLICATION SEEKING REGISTRATION U/S 12AA FILED BY THE APPLICANT COMPANY. 2. BRIEF FACTS OF THE CASE ARE THAT THE APPELLANT/APPLICANT FILED AN APPLICATION IN THE FORM NO. ITA NO. 1487-CHD-2019 JAIN AMAR FOUNDATION, LUDHIANA 2 10A ON 30.03.2019 SEEKING REGISTRATION U/S 12AA OF THE ACT. THE LD. CIT(E), ISSUED QUESTIONNAIRE THROUGH ON LINE PORTAL IN TERMS OF RULE 17A OF THE INCOME TAX RULES. IN RESPONSE THEREOF, THE APPLICANT COMPANY SOUGHT TIME TO FILE REPLY TILL 20.06.2019. ON 19.0.2019, THE APPLICANT MANUALLY SUBMITTED ITS REPLY. THEREAFTER THE LD. CIT(E) ASKED TO PROVIDE DOCUMENTARY EVIDENCE TO ESTABLISH THE ACTIVITIES CARRIED OUT BY THE APPLICANT FOUNDATION. SINCE NO RESPONSE WAS RECEIVED FROM THE APPLICANT ON THE APPOINTED DATE, THE LD. CIT(E) REJECTED THE APPLICATION FOR THE REASON THAT THE APPLICANT HAS FAILED TO PRODUCE THE DOCUMENTARY EVIDENCE TO ESTABLISH THAT THE ENTITY HAS BEEN CREATED FOR THE BENEFIT OF THE GENERAL PUBLIC. 3. THE APPLICANT COMPANY HAS CHALLENGED THE ACTION OF THE LD. CIT(E) ON THE FOLLOWING GROUNDS: 1. THAT CIT(E) CHANDIGARH HAS NOT PROVIDED THE PROPER OPPORTUNITY BEFORE DENYING THE REGISTRATION TO THE ASSESSEE COMPANY U/S 12AA OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT') WHICH VIOLATES THE PRINCIPLES OF NATURAL JUSTICE, HENCE, THE REGISTRATION U/S 12AA OF THE INCOME TAX ACT, 1961 MAYBE GRANTED. 2. THE CIT (E) HAS ERRED IN THE EYES OF LAW FOR NOT GRANTING EXEMPTION U/S 12AA OF THE INCOME TAX ACT, 1961 IN ACCORDANCE WITH LAW, HENCE, THE REGISTRATION U/S 12AA OF THE INCOME TAX ACT, 1961 MAY PLEASE BE GRANTED. 3. THE ASSESSEE CRAVES TO LEAVE, AMEND, ALTER, TAKE ADDITIONAL GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. ITA NO. 1487-CHD-2019 JAIN AMAR FOUNDATION, LUDHIANA 3 4. SINCE THERE IS A DELAY OF ONE DAY IN FILING THE PRESENT APPEAL, THE LD. COUNSEL SUBMITTED BEFORE US THAT THE ASSESSEE HAS FILED AN APPLICATION FOR CONDONATION OF DELAY OF ONE DAY IN FILING THE PRESENT APPEAL. IN THE LIGHT OF THE APPLICATION, THE LD. COUNSEL SUBMITTED THAT SINCE THERE IS NO NEGLIGENCE OR INACTION ON THE PART OF THE ASSESSEE AND THE DELAY WAS ATTRIBUTABLE TO THE POSTAL DEPARTMENT, THE APPLICATION MAY BE ALLOWED AND DELAY OF ONE DAY MAY BE CONDONED. THE REASON STATED IN THE APPLICATION IS THAT THE MEMO OF APPEAL IN FORM 36 WAS SENT THROUGH SPEED POST FROM LUDHIANA ON 15.11.2019, HOWEVER, THE SAME WAS RECEIVED IN THE OFFICE ON 19.11.2019. THE ASSESSEE HAS ALSO FURNISHED THE COPY OF POSTAL RECEIPT ISSUED BY THE DEPARTMENT TO SUBSTANTIATE ITS CONTENTION. 5. THE LD. DEPARTMENTAL REPRESENTATIVE OPPOSED THE APPLICATION FOR CONDONATION OF DELAY FILED BY THE ASSESSEE STATING THAT THE REASON STATED BY THE ASSESSEE IS NOT SUFFICIENT TO CONDONE THE DELAY. 6. WE HAVE PERUSED THE MATERIAL ON RECORD. THE HONBLE APEX COURT IN THE CASE OF COLLECTOR LAND ACQUISITION VS. MST. KATIJI & OTHERS 1987 SCR (2) 387 HAS HELD AS UNDER: REFUSING TO CONDONE DELAY CAN RESULT IN A MERITORIOUS MATTER BEING THROWN OUT AT THE VERY THRESHOLD AND CAUSE OF JUSTICE BEING DEFEATED. AS AGAINST THIS WHEN DELAY IS CONDONED THE ITA NO. 1487-CHD-2019 JAIN AMAR FOUNDATION, LUDHIANA 4 HIGHEST THAT CAN HAPPEN IS THAT A CAUSE WOULD BE DECIDED ON MERITS AFTER HEARING THE PARTIES 7. AS SUBMITTED BY THE LD. COUNSEL, THE ASSESSEE SENT ITS APPEAL TO THE ITAT CHANDIGARH ON 15.11.2019 FROM LUDHIANA THROUGH SPEED POST. HOWEVER, THE POSTAL DEPARTMENT DELIVERED THE LETTER/ENVELOPE CONTAINING THE APPEAL ON FIFTH DAY I.E., ON 19.11.2019. HENCE IN OUR CONSIDERED VIEW, THE REASON STATED BY THE ASSESSEE IS SUFFICIENT TO CONDONE THE DELAY OF ONE DAY IN THIS CASE. ACCORDINGLY, WE ALLOWED THE APPLICATION OF THE ASSESSEE AND ASKED THE LD. COUNSEL FOR THE ASSESSEE TO ARGUE THE APPEAL OF THE ASSESSEE ON MERITS. 8. THE LD. COUNSEL AT THE OUT SET SUBMITTED THAT THE LD. CIT(E) HAS PASSED THE IMPUGNED ORDER IN VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE AS NO REASONABLE OPPORTUNITY OF BEING HEARD WAS AFFORDED TO THE APPLICANT COMPANY. THE LD. COUNSEL FURTHER POINTED OUT THAT THE APPLICANT COMPANY SUBMITTED ITS REPLY ONE DAY BEFORE THE STIPULATED DATE. THEREAFTER, NO NOTICE WAS SERVED UPON THE COMPANY AND THE LD. CIT(A) PASSED THE IMPUGNED ORDER. THE LD. COUNSEL ACCORDINGLY SUBMITTED THAT THE IMPUGNED ORDER MAY BE SET ASIDE AND THE LD. CIT(E) MAY BE DIRECTED TO ALLOW THE REGISTRATION SOUGHT BY THE APPLICANT. 9. THE LD. DR ON THE OTHER HAND SUPPORTING THE ORDER PASSED BY THE LD. CIT(E) SUBMITTED THAT SINCE THE ITA NO. 1487-CHD-2019 JAIN AMAR FOUNDATION, LUDHIANA 5 APPLICANT COMPANY FAILED TO RESPOND TO THE QUERY DATED 06.09.2019, RAISED BY THE LD. CIT(E), THE LD. CIT(E) HAS RIGHTLY DISMISSED THE APPLICATION ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 10. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTIES AND ALSO PERUSED THE MATERIAL ON RECORD. AS POINTED OUT BY THE LD. COUNSEL, THE APPLICANT COMPANY FILED ITS REPLY IN RESPONSE TO THE LETTER DATED 30.04,2019. AS PER THE ORDER OF THE LD. CIT(E), FURTHER QUERY WAS RAISED ON 06.09.2019 AND THE APPLICANT COMPANY WAS DIRECTED TO PROVIDE DOCUMENTARY EVIDENCE TO PROVE THE ACTIVITIES CARRIED OUT BY THE FOUNDATION ON 09.09.2019. HOWEVER, WE DO NOT FIND ANY MATERIAL ON RECORD TO HOLD THAT THE NOTICE DATED 06.09.2019 WAS SERVED UPON THE APPLICANT COMPANY BEFORE 09.09.2019. MOREOVER, THE LD. CIT(E) HAS NOT MENTIONED IN THE IMPUGNED ORDER AS TO HOW AND WHEN THE SAID NOTICE WAS SERVED UPON THE APPLICANT COMPANY. UNDER THESE CIRCUMSTANCES, WE FIND MERIT IN THE CONTENTION OF THE LD. COUNSEL THAT THE LD. CIT(E) HAS PASSED THE IMPUGNED ORDER WITHOUT AFFORDING A REASONABLE OPPORTUNITY TO THE APPLICANT COMPANY TO PRESENT ITS CASE. HENCE, WE HOLD THAT THE LD. CIT(E) HAS PASSED THE IMPUGNED ORDER IN VIOLATION OF ONE OF THE FUNDAMENTAL PRINCIPLES OF NATURAL JUSTICE AUDI ALTERAM PARTEM, I.E., ITA NO. 1487-CHD-2019 JAIN AMAR FOUNDATION, LUDHIANA 6 WITHOUT AFFORDING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE APPLICANT COMPANY. WE ACCORDINGLY, SET ASIDE THE IMPUGNED ORDER IN THE INTEREST OF JUSTICE AND SEND THE APPEAL BACK TO THE LD. CIT(E) FOR DECIDING THE APPLICATION OF THE APPLICANT COMPANY ON MERITS AFTER AFFORDING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE APPELLANT COMPANY. IN THE RESULT, THE PRESENT APPEAL FILED BY THE APPLICANT COMPANY IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 24.05.2021. SD/- SD/- ( N.K. SAINI) ( R.L.NEGI ) / VICE PRESIDENT / JUDICIAL MEMBER DATED : 24.05.2021 .. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. / CIT 4. ( )/ THE CIT(A) 5. , , / DR, ITAT, CHANDIGARH 6. [ / GUARD FILE / BY ORDER, / ASSISTANT REGISTRAR