BHAI DAYA SINGH JI BHAI DHARAM SINGH JI, Ludhiana V. Commissioner of Income tax (Exemptions), CHANDIGARH

ITA 151/ASR/2020

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 0369 (ITAT-AMRITSAR)
• Duration Of Justice: 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 28-10-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M P S INGH LD
• Assessee Lawyers: HARGUN KAUR; SATBIR SINGH WAHI LD
• Keywords: Opportunity of being heard; Principle of natural justice; Set aside
• Section: 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, AMRITSAR (VIRTUAL COURT) BEFORE: SHRI. N.K. SAINI, VICE PRESIDENT AND SHRI N.K. CHOUDHRY, JUDICIAL MEMBER ITA NO. 151/ASR/2020 ASSESSMENT YEAR: BHAI DAYA SINGH JI BHAI DHARAM SINGH JI NISHKAM SATSANG SABHA B-XXXI 22221417113, TIBBA ROAD PREM BIHAR LUDHIANA 141007, PUNJAB [PAN NO: AAGAB 1280Q] VS. COMMISSIONER OF INCOME TAX (EXEMPTIONS), CHANDIGARH (APPELLANT) (RESPONDENT) APPELLANT BY : MS. HARGUN KAUR & SH. SATBIR SINGH WAHI (LD. C.A.) RESPONDENT BY: SH. M. P. SINGH (LD. CIT- DR ) DATE OF HEARING: 25.11.2020 DATE OF PRONOUNCEMENT: 25.11.2020 ORDER PER N.K. CHOUDHRY, JM: THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAINST THE ORDER DATED 21-09-2020 IMPUGNED HEREIN, PASSED BY THE LD. CIT(E), CHANDIGARH U/S. 12AA(1)(B)(II) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS THE ACT) FOR THE AFORESAI D ASSESSMENT YEAR, WHEREBY THE LD. CIT(E) DISMISSED THE APPLICATION OF THE APPELLANT FOR REGISTRATION UNDER SE CTION 12A OF THE ACT. ITA NO. 151/ASR/2020 BHAI D AYA SINGH JI BHAI DHARAM SINGH JI V. CIT(E) 2 2. IT APPEARS FROM THE IMPUGNED ORDER THAT THE APPLIC ATION FOR REGISTRATION U/S 12A OF THE ACT WAS FILED ON 06-03- 2020 WHICH WAS TAKEN INTO CONSIDERATION AND QUESTIONNAIRE WAS ISSUED THROUGH ONLINE PORTAL ON 29-05-2020 WITH THE REQUEST TO PROVIDE CLARIFICATIONS TO THE QUERIES RAISED BY 15-06-2020. TH E APPELLANT REPLIED ONLINE ON ITBA WHICH WAS TAKEN INTO CONSIDERATI ON BY THE COMMISSIONER AND IT WAS NOTICED THAT FINANCIAL STATEMENTS SUBMITTED BY THE APPELLANT IS NOT CLEARLY SCANNED AND HALF PORTION OF THE FINANCIAL STATEMENTS IS CUT OUT IN THE P ROCESS OF SCANNING OF PAPERS. IT WAS FURTHER OBSERVED BY THE LD. COMMISSIONER THAT THE OTHER ANNEXURES SUBMITTED BY THE APPELLANT ARE ALSO NOT OPENING. ULTIMATELY THE LD. C IT(E) LD. CIT(E) REJECTED THE APPLICATION FOR GRANT OF REGISTRAT ION U/S 12A OF THE ACT, WHILE OBSERVING THAT IN ABSENCE OF PROPER FINANCIAL STATEMENTS AND DOCUMENTARY PROOF OF EXISTENCE OF EX PENSES IN THE FORM OF BILLS & VOUCHERS REGARDING ACTIVITY OF THE SOCIETY, THERE IS NO WAY THE GENUINENESS OF ACTIVITIES OF THE SOCIETY CA N BE CORROBORATED WITH THE STATED AIMS AND OBJECTS. 3. HAVING HEARD THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. FROM THE ORDER IT ALSO REFLECTS TH AT THE LD. CIT(E) SOUGHT CERTAIN EXPLANATIONS/DOCUMENTS, WHICH HAV E BEEN CLARIFIED AND REPLIED BY THE APPLICANT BY FILLING THE RELEVANT INFORMATION AND DOCUMENTS. THEREAFTER, NO OPPORTUNITY WAS PROVIDED TO THE APPLICANT EITHER FOR CORROBORATION/ CO NFRONTATION AND/OR FOR ESTABLISHING ITS CASE FOR GRANT OF REGISTRATI ON, HOWEVER ON THE BASIS OF THE REPLY ITSELF WHICH WAS FOUND INCOMP LETE BY ITA NO. 151/ASR/2020 BHAI D AYA SINGH JI BHAI DHARAM SINGH JI V. CIT(E) 3 THE LD. COMMISSIONER, THE REGISTRATION APPLICATION WAS R EJECTED WITHOUT GIVING ANY FURTHER OPPORTUNITY. 4. IT IS TRITE TO SAY THAT EVERY PERSON HAS THE RIGHT TO SP EAK AND BE HEARD WHEN ALLEGATIONS ARE BEING PUT TOWARDS H IM OR HER. IF NO OPPORTUNITY HAS BEEN GIVEN TO THE PARTY EFFECTE D, THEN IT SHALL AMOUNT TO VIOLATIONS OF THE PRINCIPLES OF NATURAL JUSTICE, WHICH EMBEDDED IN LATIN WORDS AUDI ALTERAMPARTEM WH ICH MEANS HEAR THE OTHER SIDE, OR NO MAN SHOULD BE CONDE MNED UN-HEARD OR BOTH THE SIDES MUST BE HEARD BEFORE PASSIN G ANY ORDER. THE PRINCIPLE OF AUDI ALTERAMPARTEM IS THE BA SIC CONCEPT OF THE PRINCIPLE OF NATURAL JUSTICE AND HAS NOT EVOLVE D FROM THE CONSTITUTION BUT EVOLVED THROUGH CIVILIZATION AND MAN KIND AND IS THE CONCEPT OF COMMON LAW, WHICH IMPLIES FAIRNESS, REASONABLENESS, EQUALITY AND EQUITY. IN INDIA, THE PRI NCIPLES OF NATURAL JUSTICE ARE THE GROUNDS OF ARTICLE 14 AND 21 O F THE CONSTITUTION. ARTICLE 14 ENSHRINES THAT EVERY PERSON SHOU LD BE TREATED EQUALLY. IN THE LANDMARK CASE OF MANEKA GANDHI VS. THE UNION OF INDIA (1978 AIR 597), IT HAS BEEN HELD BY CONSTITUTION BENCH OF THE APEX COURT THAT THE LAW AND PROCEDURE MU ST BE OF A FAIR, JUST AND REASONABLE KIND. THE DOCTRINE ENSURES A FAIR HEARING AND FAIR JUSTICE TO BOTH THE PARTIES. UNDER T HIS DOCTRINE, BOTH THE PARTIES HAVE THE RIGHT TO SPEAK. THE AIM OF THIS PRINCIPLE IS TO GIVE AN OPPORTUNITY TO THE PARTIES TO DEFEND TH EMSELVES. BEFORE THE COURT, BOTH THE PARTIES ARE EQUAL AND ARE ENTITLEMENT OF EQUAL OPPORTUNITY TO REPRESENT THEM. IF THE ORDER IS PASSED BY THE AUTHORITY WITHOUT PROVIDING THE REASONABLE OPPOR TUNITY OF BEING HEARD TO THE PERSON AFFECTED BY IT ADVERSELY WIL L BE INVALID AND SHALL BE LIABLE TO BE SET ASIDE. ITA NO. 151/ASR/2020 BHAI D AYA SINGH JI BHAI DHARAM SINGH JI V. CIT(E) 4 5. AS PER THE PROVISIONS OF SECTION 12AA OF THE ACT, BEFOR E PASSING THE ORDER FOR REFUSING TO REGISTER THE TRUST OR INSTITUTION, A REASONABLE OPPORTUNITY OF BEING HEARD IS REQUIRED TO BE GIVEN, FOR THE SAKE OF BREVITY AND READY REFERENCE THE PROVI SIONS ARE REPRODUCED HEREIN BELOW: SECTION 12AA OF THE INCOME TAX ACT READS AS FOLLOWS: 12AA. PROCEDURE FOR REGISTRATION.--(1) THE COMMISS IONER, ON RECEIPT OF AN APPLICATION FOR REGISTRATION OF A TRUST OR IN STITUTION MADE UNDER CLAUSE (A) OR CLAUSE (AA) OF SUB-SECTION (1) OF SEC TION 12A , SHALL-- (A) CALL FOR SUCH DOCUMENTS OR INFORMATION FROM THE TRUST OR INSTITUTION AS HE THINKS NECESSARY IN ORDER TO SATISFY HIMSELF ABOUT THE GENUINENESS OF ACTIVITIES OF THE TRUST OR INSTITUTI ON AND MAY ALSO MAKE SUCH INQUIRIES AS HE MAY DEEM NECESSARY IN THIS BEH ALF; AND (B) AFTER SATISFYING HIMSELF ABOUT THE OBJECTS OF T HE TRUST OR INSTITUTION AND THE GENUINENESS OF ITS ACTIVITIES, HE-- (I) SHALL PASS AN ORDER IN WRITING REGISTERING THE TRUS T OR INSTITUTION; (II) SHALL, IF HE IS NOT SO SATISFIED, PAS AN ORDER IN WRITING REFUSING TO REGISTER THE TRUST OR INSTITUTION, AND A COPY OF SU CH ORDER SHALL BE SENT TO THE APPLICANT: PROVIDE THAT NO ORDER UNDER SUB-CLAUSE (II) SHALL BE P ASSED UNLESS THE APPLICANT HAS BEEN GIVEN A REASONABLE OPPORTUNITY OF BEING HEARD. 6. COMING TO THE INSTANT CASE, INDISPUTABLY BEFORE DECLINI NG THE REGISTRATION U/S 12A OF THE ACT, NO REASONABLE OPPO RTUNITY OF BEING HEARD WAS PROVIDED TO THE APPELLANT, WHICH IS MANDATORY, HENCE ON THIS GROUND ITSELF, THE ORDER UNDER CHALLENGE IS LIABLE TO BE SET ASIDE. ITA NO. 151/ASR/2020 BHAI D AYA SINGH JI BHAI DHARAM SINGH JI V. CIT(E) 5 7. IN OUR CONSIDERED VIEW, TO MEET THE SUBSTANTIAL JUSTI CE, APPROPRIATE COURSE WOULD BE TO SET ASIDE THE ORDER IMPU GNED AND REMAND BACK THE CASE TO THE FILE OF THE LD. CIT(E) FOR A DECISION AFRESH. CONSEQUENTLY, THE CASE IS REMANDED TO TH E FILE OF THE LD. CIT(E) FOR DECISION AFRESH, SUFFICE TO SAY DUE OPPORTUNITIES OF BEING HEARD SHOULD BE GIVEN TO THE A PPELLANT. 8. WE ALSO FEEL IT APPROPRIATE TO DIRECT THE APPELLANT TO EXTEND ITS FULL CO-OPERATION AND PARTICIPATION IN THE PROCEED INGS BEFORE THE LD. CIT(E) AS AND WHEN WOULD BE REQUIRED AND IN CASE OF FURTHER DEFAULT, THE APPELLANT SHALL NOT BE SUBJECTED TO ANY LENIENCY. 9. IN THE RESULT, THE APPEAL FILED BY THE APPELLANT IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 25.1 1.2020. SD/- SD/- ( N. K. SAINI ) (N.K.CHOUDHRY) VICE PRESIDENT JUDICIAL MEMBER GP/SR.PS. COPY OF THE ORDER FORWARDED TO: (1) APPELLANT (2) THE RESPONDENT (3) THE CIT (E) (4) THE CIT CONCERNED (5) THE SR DR, I.T.A.T., AMRITSAR TRUE COPY BY ORDER