Release Trust, Secunderabad, Hyderabad V. CIT (Exemptions), Hyderabad, Hyderabad

ITA 1655/HYD/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2564 (ITAT-HYDERABAD)
• Duration Of Justice: 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 21-06-2017
• Assessment Year: misc
• Appeal Filed On: 06-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K.P.C. RAO
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 12; 12A; 12AA

Judgement Text

ITA NO 1655 OF 2016 RELEASE TRUST HYDERABAD. PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S.RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO.1655/HYD/2016 (ASSESSMENT YEAR: NA ) RELEASE TRUST HYDERABAD PAN: AABTR 9375 A VS COMMISSIONER OF INCOME TAX (EXEMPTIONS) HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI SAMUEL NAGADESI FOR REVENUE : SHRI K.P.C. RAO, CIT (DR) O R D E R PER SMT. P. MADHAVI DEVI, J.M. THIS IS ASSESSEES APPEAL AGAINST THE ORDER OF THE CIT (EXEMPTIONS), HYDERABAD, DATED 30.09.2016. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE TR UST HAD FILED AN APPLICATION IN FORM NO.10A ON 24.03.2016 SE EKING REGISTRATION U/S 12AA OF THE ACT. THE CIT (E) VIDE ORDER DATED 30.09.2016 REJECTED THE SAID APPLICATION BY OBSERVI NG THAT SOME OF THE OBJECTS OF THE ASSESSEE ARE NOT CHARITABLE A ND ARE NOT FOR THE BENEFIT OF THE PUBLIC AT LARGE. AGAINST THIS OR DER OF THE CIT (E), THE ASSESSEE IS IN APPEAL BEFORE US RAISING THE FOL LOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ORDER OF THE LEARNED COMMISSIONER OF DATE OF HEARING : 27.09.2017 DATE OF PRONOUNCEMENT : 29.09.2017 ITA NO 1655 OF 2016 RELEASE TRUST HYDERABAD. PAGE 2 OF 4 INCOME TAX (EXEMPTIONS) IS ERRONEOUS IN LAW AND FACTS OF THE CASE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX (EXEMPTIONS) IS ERRED IN LAW AND FACTS OF THE CASE IN REJECTING THE APPELLANT'S APPLICATION FOR REGISTRATION WITHOUT GRANTING AN OPPORTUNITY OF BEING HEARD AND NOT CONDUCTING THE HEARING HIMSELF, NOT FOLLOWED THE PRINCIPLES OF NATURAL JUSTICE. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER (EXEMPTIONS) ERRED IN LAW AND FACTS OF THE CASE IN APPRECIATING THE CONTENTS OF CLAUSE 4. IX (C) STATING IT IS NOT AN OBJECT OF CHARITABLE BENEFIT OF THE PUBLIC AT LARGE AND IS OF POLITICAL IMPORT RATHER CHARITABLE. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE LEARNED COMMISSIONER EXEMPTIONS IS ERRED IN LAW AND FACTS OF THE CASE IN APPRECIATING THE CLAUSE 4. IX (D) IS COMMERCIAL IN NATURE AND NOT CHARITABLE AND SIMILARLY, THE OBJECT IN CLAUSE (E) IS GENERAL IN NATURE. 5. THE APPELLANT CRAVE LEAVE TO ADD TO/ ALTER/ MODIFY/ SUBSTITUTE/ AMEND/ WITHDRAW ALL OR ANY OF THE ABOVE GROUNDS WITH THE PERMISSION OF THE HON'BLE BENCH. PRAYER: THE APPELLANT PRAYS FOR RELIEF IN TERMS OF THE ABOVE GROUNDS 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ASSESSEE IS A TRUST, CARRYING ON ACTIVITIES OF CHARITABLE NATURE AND ITS MAIN OBJECTS ARE FOR THE BENEFIT OF THE PUB LIC AT LARGE AND THE OBJECTS REFERRED TO BY THE CIT (E) IN HIS ORDER ARE ONLY ANCILLARY OBJECTS AND THEY ARE ALSO FOR THE PUBLIC AT LARGE. HE FURTHER DREW OUR ATTENTION TO THE PROVISIONS OF SECTION 12AA(1) OF THE ACT AND PARTICULARLY THE PROVISO THEREUNDER WHEREIN IT HAS BEEN PROVIDED ITA NO 1655 OF 2016 RELEASE TRUST HYDERABAD. PAGE 3 OF 4 THAT NO ORDER UNDER CLAUSE (B) SUB SECTION (1) SHAL L BE PASSED UNLESS APPLICANT HAS BEEN GIVEN A REASONABLE OPPORT UNITY OF BEING HEARD. HE SUBMITTED THAT CLAUSE (B) OF SUB-SECTION 1 PROVIDES THAT CIT(E) AFTER SATISFYING HIMSELF ABOUT THE OBJECTS O F THE TRUST/INSTITUTION AND GENUINENESS OF ITS ACTIVITIES (I) SHALL PASS AN ORDER IN WRITING REGISTERING THE TRUST OR INSTITUTI ON; OR (II) SHALL, IF HE IS NOT SO SATISFIED, PASS AN ORDER IN WRITING RE FUSING TO REGISTER THE TRUST OR INSTITUTION. THE PROVISO THEREUNDER PR OVIDES THAT NO ORDER UNDER SUB-CLAUSE (II) SHALL BE PASSED UNLESS THE ASSESSEE HAS BEEN GIVEN A REASONABLE OPPORTUNITY OF BEING HE ARD. HE SUBMITTED THAT AS IS EVIDENT FROM THE ORDER OF THE CIT (E), THE CIT (E) HAS ONLY CALLED FOR CERTAIN INFORMATION AND HAS REJECTED THE ASSESSEES APPLICATION WITHOUT GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEAR AS PROVIDED UNDER THE PROVISO TO CLAU SE (B) OF SUB- SECTION (1) OF SECTION 12AA OF THE ACT. 4. THE LEARNED DR, ON THE OTHER HAND, SUBMITTED THA T THE ASSESSEE WAS GIVEN AN OPPORTUNITY TO PRESENT ITS CA SE BY ISSUING A NOTICE DATED 4.7.2016 AND THEREFORE, THERE IS NO VI OLATION OF ANY OF THE PROVISIONS OF THE ACT. THE LEARNED DR ALSO SUBM ITTED THAT SOME OF THE ASSESSEES OBJECTS ARE ALSO PERTAINING TO THE ACTIVITIES OF HELPING SOME OF THE ORGANIZATIONS ABROAD I.E. OU TSIDE INDIA AND THEREFORE, IT CANNOT BE CONSIDERED AS A CHARITABLE ACTIVITY. HE ALSO DREW OUR ATTENTION TO THE OTHER FACTORS WHICH DISEN TITLE THE ASSESSEE FOR REGISTRATION BUT WHICH WERE NOT CONSID ERED BY THE CIT (E) FOR REJECTING THE ASSESSEES APPLICATION U/S 12 AA OF THE ACT. 5. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, WE FIND THAT THE PROCEDURE FOR REGISTRAT ION U/S 12A IS LAID DOWN U/S 12AA OF THE ACT AND UNDER SUB-SECTION (1), CLAUSE ITA NO 1655 OF 2016 RELEASE TRUST HYDERABAD. PAGE 4 OF 4 (B) THEREOF, THE CIT (E) SHALL SATISFY HIMSELF ABOU T THE OBJECTS OF THE TRUST AND SHALL PASS AN ORDER IN WRITING REGIST ERING THE TRUST OR INSTITUTION WHERE HE IS SO SATISFIED. BUT IF HE IS NOT SATISFIED, HE SHALL PASS AN ORDER IN WRITING REFUSING TO REGISTER THE TRUST OR INSTITUTION AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD. IN THE CASE BEFORE US, THE CIT (E) HAS CALLED FOR INFORMATION, BUT WHEN HE IS NOT SATISFIED, HE DID N OT GIVE THE ASSESSEE AN OPPORTUNITY OF BEING HEARD. IN VIEW OF THE SAME, WE DEEM IT FIT AND PROPER TO REMAND THE ISSUE TO THE F ILE OF THE CIT (E) FOR RECONSIDERATION OF THE ISSUE DE NOVO IN ACCORDA NCE WITH THE LAW. IF THE CIT (E) IS STILL NOT SATISFIED WITH THE GENUINENESS OF THE ACTIVITIES OF THE ASSESSEE OR OBJECTS OF THE ASSESS EE, HE SHALL GIVE AN OPPORTUNITY TO THE ASSESSEE IN ACCORDANCE WITH T HE PROVISO TO SUB-CLAUSE (II) OF CLAUSE (B) OF SUB-SECTION (1) OF SECTION 12AA OF THE ACT. 6. IN THE RESULT, ASSESSEES APPEAL IS TREATED AS A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH SEPTEMBER, 2017. SD/- SD/- (S.RIFAUR RAHMAN) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 29 TH SEPTEMBER, 2017. VINODAN/SPS COPY TO: 1 SHRI SAMUEL NAGDESI, CA, 408, SRI RAMAKRISHNA TOW ERS, BESIDES IMAGE HOSPITALS, NAGARJUNA NAGAR, AMEERPET, HYDERAB AD 500073 2 COMMISSIONER OF INCOME TAX (EXEMPTIONS) POSSNETT BHAVAN, TILAK ROAD, HYDERABAD 500001 3 INCOME TAX OFFICER (EXEMPTION) WARD 3 HYDERABAD 4 THE DR, ITAT HYDERABAD 5 GUARD FILE BY ORDER