Kolkata Classics Trust, Kolkata V. CIT(EXEMPTIONS), KOLKATA, Kolkata

ITA 1733/KOL/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1709 (ITAT-KOLKATA)
• Duration Of Justice: 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-06-2017
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 30-08-2016
• Court: TRIBUNAL
• Department Lawyers: J V D LANGSTICH
• Assessee Lawyers: ARVIND AGARWAL
• Keywords: Principle of natural justice
• Section: 12A; 12AA

Judgement Text

1 ITA NOS. 1733-1734/KOL/2016 KOLKATA CLASSICS TRUST , B , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA () BEFORE .., /AND ... , ) [BEFORE SHRI A. T. VARKEY, JM & DR. A. L. SAINI, A M] I.TA NOS. 1733 & 1734/KOL/2016 ASSESSMENT YEAR: NA KOLKATA CLASSICS TRUST (PAN: AACTK6083H) VS. COMMISSIONER OF INCOME-TAX (EXEMPTION), KOLKATA. APPELLANT RESPONDENT DATE OF HEARING 29.03.2017 DATE OF PRONOUNCEMENT 09.06.2017 FOR THE APPELLANT SHRI ARVIND AGARWAL, ADVOCATE FOR THE RESPONDENT SHRI J.V.D LANGSTICH, CIT, DR ORDER PER SHRI A.T.VARKEY, JM BOTH THESE APPEALS PREFERRED BY THE ASSESSEE ARE AG AINST THE SEPARATE ORDERS PASSED ON THE SAME DAY I.E. 12.07.2016 BY THE CIT(E ), KOLKATA U/S. 12AA AND U/S. 80(G)(5)(VI) OF THE INCOME-TAX ACT, 1961 (HEREINAFT ER REFERRED TO AS THE ACT) WHEREBY HE REJECTED THE APPLICATION FOR GRANT OF REGISTRATI ON U/S. 12AA AND DENIED APPROVAL U/S. 80(G)(5)(VI) OF THE ACT RESPECTIVELY. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E TRUST CAME INTO EXISTENCE VIDE TRUST DEED DATED 01.04.2015 AND HAD FILED AN APPLIC ATION IN FORM 10A ON 30.03.2016 BEFORE THE LD. CIT(E), KOLKATA. THE LD. CIT(E) NOT ES THAT THE NOTICE ISSUED TO THE TRUST DATED 26.05.2016 FIXING THE CASE FOR HEARING ON 10.06.2016 WAS RETURNED BACK UNSERVED BY THE POSTAL DEPARTMENT . THEREAFTER, HE EXAMINED THE DOCUMENTS SUBMITTED ALONG WITH THE APPLICATION AND HE FOUND THAT THE DE ED OF TRUST HAS NOT BEEN REGISTERED WITH THE REGISTRAR/SUB-REGISTRAR ETC. AND ALSO THE APPLICANT/ASSESSEE HAS NOT SUBMITTED 2 ITA NOS. 1733-1734/KOL/2016 KOLKATA CLASSICS TRUST ANY NOTE/PROOF OF ITS ACTIVITIES. THEREAFTER, THE L D. CIT(E) AFTER REPRODUCING SECTION 12A WAS OF THE OPINION THAT THE ACTIVITIES OF THE T RUST COULD NOT BE ASCERTAINED IN ABSENCE OF NOTE/PROOF OF ACTIVITIES AND ALSO THE E XISTENCE OF THE TRUST COULD NOT BE DETERMINED. THEREFORE, HE REJECTED THE APPLICATION FOR REGISTRATION FILED U/S. 12AA OF THE ACT AND CONSEQUENT TO THE SAID ACTION, THE LD. CIT(E) ALSO DENIED APPROVAL TO ASSESSEE U/S. 80(G)(5)(VI) OF THE ACT. AGGRIEVED B Y THE AFORESAID DECISION OF THE LD. CIT(E) THE ASSESSEE TRUST IS BEFORE US. 3. THE MAIN GRIEVANCE OF THE ASSESSEE TRUST AS POIN TED OUT TO US BY THE LD. COUNSEL WAS THAT THE TRUSTEE DID NOT RECEIVE ANY NOTICE DAT ED 26.05.2016 AS MENTIONED BY THE LD. CIT(E) AND, THEREFORE, NO ONE COULD REPRESENT O N BEHALF OF THE ASSESSEE TRUST ON THE DATE OF HEARING BEFORE THE LD. CIT(E). IT WAS POINT ED OUT BY THE LD. COUNSEL THAT THE REJECTION ORDER WHICH IS IMPUGNED BEFORE US WAS COR RECTLY SERVED UPON THE ASSESSEE AT THE VERY SAME ADDRESS AS MENTIONED IN THE APPLICATI ON, THEREFORE, ACCORDING TO LD. COUNSEL, THE IMPUGNED ORDER PASSED BY THE LD. CIT(E ) IS IN VIOLATION PRINCIPLES OF NATURAL JUSTICE AND, THEREFORE, IS BAD IN LAW. IT WAS ALSO URGED BEFORE US BY THE LD. COUNSEL THAT THE ASSESSEE TRUST CAME INTO EXISTENCE ONLY ON 01.04.2015 AND HAD FILED THE APPLICATION FOR REGISTRATION U/S. 12AA OF THE A CT ON 30.03.2016 AND THEY HAD COMMENCED ITS FUNCTIONING IN CONSONANCE WITH THE OB JECTIVES ENSHRINED IN THE TRUST DEED AND DREW OUR ATTENTION TO PAGES 8 TO 19 WHEREI N THE TRUST DEED HAS BEEN ANNEXED IN THE PAPER BOOK. ACCORDING TO LD. COUNSEL, THE LD . CIT(E) ERRED IN FINDING THAT THE ACTIVITIES OF THE TRUST CANNOT BE ASCERTAINED IN TH E ABSENCE OF NOTE/PROOF OF ITS ACTIVITIES AND THAT THE EXISTENCE OF THE TRUST CANNOT BE DETER MINED WHEN THE FACTS REMAIN THAT THE ASSESSEE HAD FILED THE PAN OF THE SETTLERS AND OTHE R TWO TRUSTEES AND THE LIST OF TRUSTEES WITH THEIR PAN AND THE BANK STATEMENTS WITH ALLAHAB AD BANK AND THE VERY FACT THAT THE IMPUGNED REJECTION ORDERS HAVE BEEN RECEIVED IN THE ADDRESS GIVEN IN THE APPLICATION GOES ON TO SHOW THAT THE PURPORTED NOTICE ISSUED BY THE LD. CIT(E) DATED 26.05.2016 COULD HAVE BEEN A WRONG ADDRESS. SO, THEREFORE, TH E ORDER OF THE LD. CIT(E) IS BAD IN LAW AND IT NEEDS TO BE SET RIGHT. THE LD. DR SUPPO RTED THE ORDER OF THE LD. CIT(E). 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND GONE THR OUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE NOTE THAT THE ASSESSEE TRUST CAME INTO EXISTENCE VIDE TRUST DEED DATED 3 ITA NOS. 1733-1734/KOL/2016 KOLKATA CLASSICS TRUST 01.04.2015 AND HAD FILED AN APPLICATION IN FORM 10A ON 30.03.2016 FOR REGISTRATION U/S. 12AA OF THE ACT AS WELL AS FOR APPROVAL U/S. 8 0G(5)(VI) OF THE ACT. WE NOTE THAT THE LD. CIT(E) HAS MENTIONED THAT A NOTICE WAS ISSU ED ON 26.05.2016 INFORMING THE ASSESSEE ABOUT THE HEARING ON 10.06.2016 AND ACCORD ING TO THE LD. CIT(E), THE SAID NOTICE HAS BEEN RETURNED UNDELIVERED TO THE ASSESSE E. THEREAFTER, HE FOUND FAULT WITH THE ASSESSEE FOR NOT REGISTERING THAT THE DEED OF T RUST WITH THE REGISTRAR/SUB-REGISTRAR ETC. AND THAT THE APPLICANT FOR NOT SUBMITING ANY P ROOF OF ITS ACTIVITIES. THEREFORE, HE WAS OF THE OPINION THAT HE COULD NOT ASCERTAIN THE ACTIVITIES OF THE TRUST IN THE ABSENCE OF THE NOTES/PROOF OF ACTIVITIES AND HE WAS OF THE OPI NION THAT THE EXISTENCE OF THE TRUST ITSELF IS NOT DETERMINABLE. SO, HE REJECTED THE AP PLICATION FOR REGISTRATION U/S. 12AA OF THE ACT. SIMILARLY, THE LD. CIT(E) HAS ALSO REJECTE D THE APPLICATION OF ASSESSEE FOR APPROVAL U/S. 80(G)(5)(VI) OF THE ACT AS HE REJECTE D THE APPLICATION OF ASSESSEE FOR GRANT OF REGISTRATION U/S. 12AA OF THE ACT. WE DO NOT S UBSCRIBE TO THE SAID ACTIONS OF THE LD. CIT(E). WE ARE OF THE VIEW THAT SO FAR AS GRANT O F REGISTRATION U/S. 12AA OF THE ACT IS CONCERNED, THE LD. CIT(E)S JURISDICTION IS ONLY TO VERIFY THE OBJECTIVES OF THE INSTITUTION AND GENUINITY OF THE ACTIVITIES, MEANIN G THEREBY THAT, HE HAS TO SATISFY HIMSELF THAT THE OBJECTS ARE CHARITABLE IN NATURE A ND THE ACTIVITIES BEING CARRIED ON OR TO BE CARRIED ON ARE GENUINE, MEANING THEREBY THAT, TH EY ARE IN CONSONANCE FOR ACHIEVING OF CHARITABLE OBJECT AND NOTHING ELSE. WE NOTE THAT THE MAIN GRIEVANCE OF THE ASSESSEE IS THAT IT WAS NOT GIVEN AN OPPORTUNITY TO PRESENT ITS CASE BEFORE THE LD. CIT(E). THE PLEA OF THE ASSESSEE TRUST IS THAT WHEN IT CAN RECEIVE T HE IMPUGNED REJECTION ORDER IN THE ADDRESS GIVEN IN THE APPLICATION, THE QUESTION OF T HE NOTICE DATED 26.05.2016 NOT BEING ABLE TO BE SERVED DOES NOT ARISE AND THAT IT MIGHT HAVE BEEN WRONGLY ADDRESSED. REJECTION OF ITS APPLICATION BEFORE THE LD. CIT(E), CAUSES CIVIL CONSEQUENCES AND HEARING THE ASSESSEE BEFORE PASSING ADVERSE ORDER A GAINST IT IS A MUST AND NOT AN EMPTY FORMALITY. ADMITTEDLY, THE LD. CIT(E) ONLY ISSUED ONE NOTICE ON 26.05.2016, FIXING THE HEARING ON 10.06.2016 AND THEREAFTER PASSED THE IMP UGNED ORDER ON 12.07.2016. FROM THE IMPUGNED ORDER IT IS NOT DISCERNABLE AS TO WHET HER ANY NOTICE OF HEARING ON 12.07.2016 WAS ISSUED TO THE ASSESSEE TRUST AND WHA T WAS THE FATE OF IT IS NOT EMANATING FROM THE IMPUGNED ORDER. SO, IN THE AFORESAID CIRC UMSTANCES, WE HOLD THE IMPUGNED 4 ITA NOS. 1733-1734/KOL/2016 KOLKATA CLASSICS TRUST ORDER BAD IN LAW FOR VIOLATION OF NATURAL JUSTICE. IN SUCH A SCENARIO, WE ARE OF THE OPINION THAT FOR THE ENDS OF JUSTICE THE ASSESSEE T RUST NEEDS TO BE GIVEN AN OPPORTUNITY TO REPRESENT ITS CASE BEFORE THE LD. CIT(E). THERE FORE, WE ARE INCLINED TO SET ASIDE THE ORDER OF THE LD. CIT(E) AND REMAND THE MATTER BACK TO HIS FILE WITH A DIRECTION TO CONSIDER THE APPLICATION U/S. 12AA OF THE ACT AND P ASS A SPEAKING ORDER AFTER GIVING ADEQUATE OPPORTUNITY TO THE ASSESSEE TRUST. THE AS SESSEE TRUST IS DIRECTED TO COOPERATE WITH THE LD. CIT(E). SINCE WE HAVE ALLOWED THE APP EAL OF THE ASSESSEE FOR STATISTICAL PURPOSE IN RESPECT TO REGISTRATION U/S. 12AA OF THE ACT CONSEQUENTLY, THE APPLICATION FOR APPROVAL U/S. 80G(5)(VI) OF THE ACT IS ALSO RESTORE D BACK TO THE FILE OF THE LD. CIT(E) TO PASS A FRESH ORDER IN ACCORDANCE TO LAW. 5. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER IS PRONOUNCED IN THE OPEN COURT ON 09.06.201 7 SD/- SD/- (DR. A. L. SAINI) (ABY. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 9 TH JUNE, 2017 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT KOLKATA CLASSICS TRUST, C/O G. P. AGRAW AL & ASSOCIATES, 7A, KIRAN SHANKAR RAY ROAD, 2 ND FLOOR, KOLKATA-700 001. 2 RESPONDENT CIT(EXEMPTION), KOLKATA. 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, SENIOR PRIVATE SECRETARY