Satguru Brahmsagar Brahmanand Bhuriwale Trust, Bilaspur V. CIT (Exemptions), Chandigarh

ITA 150/CHANDI/2023

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The appeals by Satguru Brahmsagar Brahmanand Bhuriwale Trust challenged the orders of the CIT (Exemptions), Chandigarh, which had rejected the Trust's applications for registration under sections 12AB and 80G(5) of the Income Tax Act, 1961. The primary grounds for rejection included non-compliance with procedural requirements and lack of substantive examination of the Trust's objectives and activities. The Tribunal found that the CIT (Exemptions) had dismissed the appeals without considering the merits or the material on record, thus violating the principles of natural justice. Consequently, the Tribunal remanded the cases for a fresh decision, emphasizing the need for a thorough examination of the Trust's applications.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 127818 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 18-04-2023
• Assessment Year: 2022-2023
• Appeal Filed On: 16-03-2023
• Other Referred Cases: S. Velu Palandar Vs. DCIT
• Laws Referred To: Income-tax Act, 1961, Income Tax Rules, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Set aside
• Section: 12A; 12AA

Judgement Text

आयकर अपील य अ धकरण,च डीगढ़ यायपीठ, च डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH, ‘B’, CHANDIGARH BEFORE SHRI A.D. JAIN, VICE PRESIDENT & SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER आयकर अपील सं./ ITA Nos. 150 & 151/CHD/2023 नधा रण वष / Assessment Year : 2022-23 Satguru Brahmsagar Brahmanand Bhuriwale Trust, Brahna Nand Dolan, Bassi Shrinaina Devi Ji, Bilaspur Vs. बनाम CIT (Exemptions), Chandigarh थायी लेखा सं./PAN NO: AAVTS0497C अपीलाथ /Appellant यथ /Respondent नधा रती क ओर से/Assessee by : Sh. Nikhil Goyal, Advocate and Shri Ashok Goyal, CA राज व क ओर से/ Revenue by : Sh. Sarabjeet Singh, CIT DR स ु नवाई क तार$ख/Date of Hearing : 19.04.2023 उदघोषणा क तार$ख/Date of Pronouncement : 21.04.2023 आदेश/Order Per A.D. Jain, Vice President: These are Assesse’s appeals against the respective orders each dated 19.01.2023 of the ld. CIT (Exemptions), Chandigarh taking the following grounds of appeal :- ITA No. 150/Chd/2023:- 1. Whether order passed by ld. CIT(E) in form No. 10AD is liable to be set aside being in violation of section 12AB read with section 12A of the Income-tax Act, 1961 read with Rule 17A of the Income Tax Rules, 1961? 150-Chd-2023 –Satguru Brahmsagar Brahmanand Bhuriwale Trust, Sangrur 2 2. Whether order passed by Ld. CIT(E) in form No. 10AD is liable to set aside on Principles of Natural Justice. 3. Whether mere uploading of notice on the e-filing portal without following the procedure established under section 282 of the Income-tax Act, 1961 read with Rule 127 of the Income Tax Rules,1962 is bad in law and order passed thereafter is liable to be set aside? ITA No. 151/Chd/2023:- 1. Whether order passed by ld. CIT(E) in form No. 10AD is liable to be set aside being in violation of section 80G(5) of the Income-tax Act, 1961 read with Rule 17A of the Income Tax Rules, 1962? 2. Whether order passed by Ld. CIT(E) in form No. 10AD is liable to set aside on Principles of Natural Justice. 3. Whether mere uploading of notice on the e-filing portal without following the procedure established under section 282 of the Income-tax Act, 1961 read with Rule 127 of the Income Tax Rules,1962 is bad in law and order passed thereafter is liable to be set aside? 2. Since the issues involved in both the appeals are identical, they have been heard together and are being disposed of by this common order. For the sake of description of facts, ITA No. 150/Chd/2023 is being taken as the lead case. 3. 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 22.09.2022. In order to examine and verify the objects of the Assessee Trust and the genuineness of its 150-Chd-2023 –Satguru Brahmsagar Brahmanand Bhuriwale Trust, Sangrur 3 activities, a detailed questionnaire was issued electronically to the Assessee on 7.11.2022 requiring the Assessee to furnish the details and documents on-line through e-proceedings on e-filing portal, by 22.11.2022. 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., 20.12.2022 and thereafter, a final opportunity was afforded to the Assessee vide letter dated 30.12.2022, fixing the matter on 06.01.2023. 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 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. 4. 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 150-Chd-2023 –Satguru Brahmsagar Brahmanand Bhuriwale Trust, Sangrur 4 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. 54. The ld. DR, on the other hand, has placed reliance on the order of the ld. CIT(E). 6. 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 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 ld. CIT (E) to decide an appeal on merit. 7. 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 150-Chd-2023 –Satguru Brahmsagar Brahmanand Bhuriwale Trust, Sangrur 5 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. 151/Chd/2023 8. The Assessee filed an application for approval u/s 80G(5)(iii), first proviso, in Form 10AB. As in the case of rejection of Assessee’s application for registration, here also, the ld. CIT(E) rejected the application ex-parte qua the Assessee without going into merits of the case. 9. Our findings recorded while disposing of ITA No. 150/Chd/2023 are mutatis-mutandis, squarely applicable to the present appeal also and this appeal is also disposed in the same terms. 10. In the result, for statistical purposes, both the appeals are treated as allowed. Order pronounced on 21.04.2023. Sd/- sd/- (VIKRAM SINGH YADAV) ( A.D. JAIN ) Accountant Member Vice President Dated : 21.4.2023 “आर.के.” आदेश क त*ल+प अ,े+षत / Copy of the order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent 150-Chd-2023 –Satguru Brahmsagar Brahmanand Bhuriwale Trust, Sangrur 6 3. आयकर आय ु 1त/ CIT 4. +वभागीय त न5ध, आयकर अपील$य आ5धकरण, च7डीगढ़/ DR, ITAT, CHANDIGARH 5. गाड फाईल/ Guard File आदेशान ु सार/ By order, सहायक पंजीकार/ Assistant Registrar