CA S.K. SAXENA CHARITABLE TRUST, SHAHJAHANPUR V. CIT EXEMPTION, LUCKNOW

ITA 180/LKW/2024

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 5818 (ITAT-LUCKNOW)
• Duration Of Justice: 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2024
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: B
• Next Hearing Date: 08-07-2024
• Assessment Year: misc
• Appeal Filed On: 29-03-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEIL JAIN LD.
• Keywords: Charitable institution; Opportunity of being heard; Principle of natural justice; Audi alteram partem
• Section: 80G

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, ‘B’ BENCH LUCKNOW ITAT-Lucknow Page 1 of 4 BEFORE HON’BLE SHRI G. D. PADMAHSHALI, ACCOUNTANT MEMBER AND SHRI SUBHASH MALGURIA, JUDICIAL MEMBER आयकर अपील स ं . / ITA No. 179 & 180/LKW/2024 CA S K Saxena Charitable Trust C/o Sanjay Saxena, Pratap Enclave, GT Road, Shahjhanpur, UP PAN : AADTC0726E . . . . . . . अपीलार्थी / Appellant बनाम / V/s. The Commissioner of Income Tax Exemption, Lucknow . . . . . . . प्रत्यर्थी / Respondent द्वारा / Appearances Assessee by : None for the Assessee Revenue by : Mr Neil Jain [‘Ld. DR’] स ु नवाई की तारीख / Date of conclusive Hearing : 09/07/2024 घोषणा की तारीख / Date of Pronouncement : 11/07/2024 आदेश / ORDER PER G. D. PADMAHSHALI; The present twin appeals of the assessee trust are assailed against separate orders of Ld. Commissioner of Income Tax (Exemption), Lucknow [‘CIT(E)’] both dt. 19/03/2024 passed u/s 12AB(4) & 80G(5) of the Income-tax Act, 1961 [‘the Act’]. 2. These appeals were called twice, none appeared at the bequest of appellant, and record shows no letter seeking adjournment. On the basis of primary briefing from the Ld. DR we deem it to proceeded to adjudicate the matter ex-parte u/s 24 of the Income Tax Appellate Rules, 1963. [‘ITAT- Rules’] with the able assistance from the Revenue. Proceeded accordingly. CA S K Saxena Charitable Trust Vs CIT(E) ITA No.179 & 180/LKW/2014 ITAT-Lucknow Page 2 of 4 3. Since facts and threadbare interconnected issue involved in this bunch of appeals are common & identical, on the request from Revenue, for the sake of brevity these are heard together for a common and consolidated order. 4. Briefly stated common facts borne out of these case records are; the appellant trust was accorded provisional registrations u/s 12AB r.w.s. 12A(1)(ac)(vi) and also 80G of the Act. Pursuant to such provisional registrations the assessee seeking grant of regular registration u/s 12A(1)(ac)(iii) under the category of charitable trust / institution trust e-filed an application in Form No 10AB on 30/09/2023. Further in addition to above the assessee trust by application Form 10AB of even date had also applied for grant of 80G certificate u/s 80G(iii) of the Act. The Ld. CIT(E) in-order to verify objects, activities and to ascertain the fulfilment of conditions for granting registration u/s 12AB and recognition u/s 80G of the Act was put the assessee to two notices dt. 11/01/2024 & dt. 08/02/2024 which remained to be effectively replied, for the reasons both the applications by the impugned orders were rejected for the want of compliances. 5. In so far as the application for 12AB is concerned, for the want of evidences in support of activities purported to be engaged by the assessee, without putting the assessee to show-case notice, the Ld. CIT(E) has rejected the said application and initiated the proceedings for cancellation of provisional registration granted to it u/s 12AB r.w.s. 12A(1)(ac)(iii) of the Act. Consequent to the aforestated denial to grant regular registration u/s 12AB of the Act, as a corollary the application of the appellant trust seeking regular registration for 80G is also rejected by the Ld. CIT(E) by an impugned order of even date. CA S K Saxena Charitable Trust Vs CIT(E) ITA No.179 & 180/LKW/2014 ITAT-Lucknow Page 3 of 4 6. Aggrieved by the aforestated rejections and cancellation of provisional registrations the appellant trust has set-up these twin appeals against respective impugned orders alleging the action of Ld. CIT(E) as arbitrary and violative of principle of audi alteram partem. 7. We have heard the Revenue on former limited issue; and subject to the provisions of rule 18 of ITAT Rules, perused material placed on record which suggests that, the preliminary submission of the appellant did fail to give plausible response to various queries and discrepancies raised by the registering authority and also failed to substantiate its activities with cogent evidences so as enable him to draw a reasonable conclusion about the genuineness of the activities of the appellant. As we note in the event of assessee’s failure the Ld. CIT(E) rejected the former applications without further providing opportunity to make good the deficiency and to negate the adverse findings. This in our consideration view deprived the appellant from reasonable opportunity which is violative of principle of natural justice as commanded by s/c (B) of section 12AB(1)(b)(ii) and clause (ii)(b)(B) of 2 nd proviso to 80G(5) of the Act r.w.p. to rule 11AA(5) of the IT- Rules, 1962. 8. It shall be worthy to underline that the opportunity of being heard should be real, reasonable and effective and same should not be empty formalities, it should not be a paper opportunity. In view of High court of Patna’s decision in ‘St. Paul’s Anglo Indian Education Trust (2003) 262 ITR 377 (Pat)’ in the event the assessee is deprived of reasonable opportunity and time to produce all relevant documents to substantiate its claim for registration u/s 12AB and recognition of 80G, the CA S K Saxena Charitable Trust Vs CIT(E) ITA No.179 & 180/LKW/2014 ITAT-Lucknow Page 4 of 4 rejection of assessee applications by the registering authority is unjustified. It is a trite law as laid down by Hon’ble Supreme Court in case ‘Chandra Kishore Jha Vs Mahavir Prasad’ reported in 8 SCC 266 (SC), that ‘if a statute provides for a thing to be done in a particular manner, then it has to be done in that manner and in no other manner’. 9. In view of the former ratio, in our considered view, the Ld. CIT(E)’s failure to confront his negative satisfaction or his dissatisfaction over the application to the appellant before he could reject twin applications, were against the provisions of statute as the action of rejection suffered from sufficiency of reasonable opportunity to the appellant to negate the adverse observation or dissatisfaction over compliance etc. For the reasons impugned orders passed depriving the assessee from providing reasonable opportunity in our considered view deserves to be set-aside for de-nova adjudication accordance with law. Ergo ordered accordingly with a direction to grant three effective opportunities to the assessee. 10. In result, these twin appeals of the appellant are ALLOWED FOR STATISTICAL PURPOSES. In terms of rule 34 of ITAT Rules, the order pronounced in the open court on this Thursday, 11th day of July, 2024 -S/d- -S/d- SUBHASH MALGURIA G. D. PADMAHSHALI JUDICIAL MEMBER ACCOUNTANT MEMBER Lucknow ; दिना ां क / Dated : 11th day of July, 2024 आदेश की प्रतितलतप अग्रेतिि / Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The CIT(A)-NFAC, Delhi (India) 4. The Concerned CIT 5. DR, ITAT, Bench ‘B’, Lucknow 6. गार्डफ़ाइल / Guard File. आिेशान ु सार / By Order, Asstt. Registrar आयकर अपीलीय न्यायादिकरण, प ु णे / ITAT, Lucknow