D.A.V. College Hoshiarpur Soceity, Hoshiarpur V. CIT(Exemption), Chandigarh

ITA 178/CHANDI/2020

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 0800 (ITAT-CHANDIGARH)
• Duration Of Justice: 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 17-02-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Principle of natural justice; Set aside
• Section: 80G; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH A, CHANDIGARH (VIRTUAL COURT) BEFORE: SHRI. N.K.SAINI, VICE PRESIDENT AND SHRI R.L. NEGI, JUDICIAL MEMBER ITA NO. 178/CHD/2020 ASSESSMENT YEAR : D.A.V. COLLEGE HOSHIARPUR SOCIETY NEAR MINI SECRETARIAT HOSHIARPUR, PUNJAB THE CIT(EXEMPTION) CHANDIGARH ./ PAN NO. AAAAD8450G / APPELLANT / RESPONDENT / ASSESSEE BY : SHRI SURINDER MAHAJAN, C.A. / REVENUE BY : SMT. C. CHANDRAKANTA, CIT ! ' # / DATE OF HEARING : 16/12/2020 $%&'() # / DATE OF PRONOUNCEMENT : 16/12/2020 / ORDER PER N.K. SAINI, VICE PRESIDENT: THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DT. 24/01/2020 OF LD. CIT(E), CHANDIGARH. 2. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEA L: 1. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE, LD COMMISSIONER OF INCOME TAX (EXEMPTION), CHANDIGARH HAS GROSSLY ERRED IN LAW IN REJECTING THE APPLICATION FOR GRANT OF APPROVAL U/S 80G OF THE ACT ON FLIMSY GROUNDS. 2. THAT THE ORDER PASSED BY LD COMMISSIONER OF INC OME TAX (EXEMPTION), CHANDIGARH IS OPPOSED TO JUDGMENT OF JURISDICTIONAL P&H HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX (EXEMPTION) VS. SANT GIR DHAR ANAND PARMHANS SANT ASHRAM (2018)305 CTR 0099 ((P&H)) WHEREIN IT HAS BEEN HELD THAT ONCE REGISTRATION U/S 12AA STANDS VALIDATED, A PPROVAL U/S 80G ITSELF MERITS ACCEPTANCE. 3. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE, LD COMMISSIONER OF INCOME TAX (EXEMPTION) HAS GROSSLY ERRED IN LAW IN REJECTING T HE APPLICATION FOR GRANT OF APPROVAL U/S 80G OF THE ACT ONLY ON THE GROUND THAT SOCIETY HAS ACCUMULATED A LARGE FUND IN THE FORM OF CURRENT ASSETS AND FIXED ASSETS. ORDER PASSED BY THE LD COMMISSIONER OF INCOME TAX (EXEMPTION), CHANDIGARH LACKS PRINCIPLES OF NATURAL JUSTICE. 2 4. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE, LD COMMISSIONER OF INCOME TAX (EXEMPTION), CHANDIGARH HAS GROSSLY ERRED IN RE JECTING APPLICATION U/S 80G OF THE ACT WITHOUT GIVING OPPORTUNITY TO EXPLAIN PURPO SE BEHIND OBTAINING APPROVAL U/S 80G OF THE ACT. 5. THAT THE APPELLANT REQUESTS FOR LEAVE TO ADD OR AME ND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD OR DISPOSED OFF. 3. FROM THE AFORESAID GROUNDS IT IS GATHERED THAT O NLY GRIEVANCE OF THE ASSESSEE RELATES TO THE REJECTION OF APPLICATION FO R GRANT OF APPROVAL UNDER SECTION 80G OF THE INCOME TAX ACT, 1961 (HEREINAFTE R REFERRED TO AS ACT). 4. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE FILED AN APPLICATION IN FORM NO. 10G ON 30/07/2019 FOR APPROVAL UNDER SECTION 80 G OF THE ACT. THE LD. CIT(E) ASKED THE ASSESSEE TO RESPOND TO THE QUERIES WHICH ARE MENTIONED IN PARA 2 OF THE IMPUGNED ORDER, FOR THE COST OF REPETITION THE SAME ARE NOT REPRODUCED HEREIN. 5. THE LD. CIT(E) AGAIN ASKED THE ASSESSEE TO FURNI SH THE CLARIFICATION AND ALSO RAISED THE ADDITIONAL QUERIES ON OR BEFORE 20/12/20 19. IN RESPONSE TO THE LETTER DT. 01/10/2019 THE ASSESSEE FURNISHED THE REPLY. TH E LD. CIT(E) AGAIN ASKED THE ASSESSEE TO SUBMIT THE REPLY ON THE ADDITIONAL QUER IES ON OR BEFORE 06/01/2020. 5.1 THE LD. CIT(E) AFTER CONSIDERING THE REPLY OF T HE ASSESSEE OBSERVED THAT THE QUANTUM OF THE CURRENT ASSETS AND THE ADDITION IN T HE FIXED ASSETS WERE HUGE AMOUNT DURING THE ACCOUNTING PERIOD ENDING ON MARCH 2016 TO MARCH 2019. HE MENTIONED THAT THE ASSESSEE FAILED TO PROVIDE THE C OGENT RATIONALE FOR SEEKING DONATION THAT SUBSTANTIATE THE NEED OF DONATION. LD . CIT(E) ALSO MENTIONED THAT EVEN THOUGH THE ASSESSEE HAD 12 AA REGISTRATION, TH AT BEING PROPER CONDITION BUT NOT A SUFFICIENT CONDITION FOR PROVIDING THE EX EMPTION TO DONATION. HE ACCORDINGLY DENIED THE APPROVAL TO THE APPLICANT SO UGHT UNDER SECTION 80G OF THE ACT. 6. NOW THE ASSESSEE IS IN APPEAL. 3 7. LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBM ISSIONS FURNISHED TO THE LD. CIT(E) AND FURTHER SUBMITTED THAT THE LD. CIT(E) NE VER ASKED THE ASSESSEE TO PROVIDE THE RATIONALE FOR SEEKING THE DONATION AND ALL THE INFORMATION WHICH WERE ASKED FOR WERE PROVIDED BY THE ASSESSEE, THERE FORE, THE REJECTION OF APPROVAL UNDER SECTION 80G WAS NOT JUSTIFIED. 8. IN HER RIVAL SUBMISSIONS THE LD. CIT DR STRONGLY SUPPORTED THE IMPUGNED ORDER PASSED BY THE LD. CIT(E). 9. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CA SE IT IS NOTICED THAT THE LD. CIT(E) REJECTED THE APPLICATION MOVED BY THE ASSESS EE FOR APPROVAL UNDER SECTION 80G OF THE ACT BY MENTIONING THAT THE ASSES SEE FAILED TO PROVIDE COGENT RATIONALE FOR SEEKING DONATION AND THE NEED FOR THE DONATION. HOWEVER IT IS NOT CLEAR AS TO WHETHER THOSE INFORMATIONS WERE ASKED F ROM THE ASSESSEE BY THE LD. CIT(E) OR NOT. WE THEREFORE CONSIDERING THE TOTALIT Y OF THE FACTS OF THE PRESENT CASE, DEEM IT APPROPRIATE TO SET ASIDE THIS CASE BA CK TO THE FILE OF THE LD. CIT(E) TO BE ADJUDICATED AFRESH IN ACCORDANCE WITH LAW AFT ER PROVIDING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 16/12/2020 . SD/- SD/- (R.L. NEGI) (N.K. SAINI) JUDICIAL MEMBER VICE PRESIDENT DATED : 16/12/2020 AG *% +,-. -( / 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