M/s R.K. Educational & Social Welfare Society, Mandi V. CIT (Exemptions), Chandigarh

ITA 217/CHANDI/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5031 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 15-09-2016
• Assessment Year: 2014-2015
• Appeal Filed On: 15-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVI SARANGA L
• Assessee Lawyers: R R THAKUR
• Keywords: Opportunity of being heard; Principle of natural justice

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO.217/CHD/2016 ASSESSMENT YEARS: 2014-15 M/S R.K. EDUCATIONAL & SOCIAL VS. CIT(E) WELFARE SOCIETY C.R. BUILDING, 5 TH FLOOR V&P.O. NABAHI THE. SARKAGHAT SECTOR 17-E, CHANDIG ARH DISTT. MANDI(H.P) PAN NO. AABAR9988C (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI. R.R. THAKUR DEPARTMENT BY : SHRI. RAVI SARANGAL DATE OF HEARING : 03/07/2017 DATE OF PRONOUNCEMENT : 13/07/2017 ORDER PER DR. B.R.R. KUMAR, AM THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A GAINST THE ORDER OF THE LD. CIT (E), CHANDIGARH DT. 30/01/2016 PASSED U NDER SECTION 10(23C)(VI) OF THE INCOME TAX ACT, 1961 REJECTING THE REGISTRATION U/S10(23C). 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS O F APPEAL: 1. THAT THE LD. COMMISSIONER OF INCOME TAX (EXEMPTI ON) HAS ERRED IN PASSING THE ORDER U/S 10(23C)(VI) WHICH IS NOT BASED ON FACTS A ND CIRCUMSTANCES WHICH REQUIRES TO BE SET ASIDE TO GRANT REGISTRATION U/S 10(23C) OF THE INCOME TAX ACT 1961. 2. THAT THE LD. COMMISSIONER OF INCOME TAX (EXEMPTI ON) HAS ERRED IN HOLDING THAT THE SOCIETY IS ENGAGED IN PROFIT MAKING BY SELLING OF B OOKS UNIFORMS AND EARNING BY TRANSPORT BUSINESS. THESE FACILITIES ARE PROVIDED TO THE STUD ENTS ONLY. THE ORDER IS MISCONCEIVED AND REQUIRE TO BE SET ASIDE FOR RECONSIDERATION AND GRANT REGIS TRATION 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FI LED AN APPLICATION SEEKING REGISTRATION UNDER SECTION 10(23C)(VI) BEFORE THE C IT(E), CHANDIGARH FOR REGISTRATION UNDER SECTION 10(23C)(VI) OF THE ACT A S ON 01/01/2015. THE LD. CIT(E) 2 REJECTED THE APPLICATION HOLDING THAT ALL THE THRE E CONDITIONS ENUMERATED IN THE SECTION 10(23C) NEED TO BE SATISFIED SIMULTANEOUSLY THE SECTION READS AS (VI) ANY UNIVERSITY OR OTHER EDUCATIONAL INSTITUT ION EXISTING SOLELY FOR EDUCATIONAL PURPOSE AND NOT FOR THE PURP OSE OF PROFIT OTHER THAN THOSE MENTIONED IN SUB CLAUSE (IIIAB) OR SUB CLAUSE (IIIA D) AND WHICH MAY BE APPROVED BY THE PRESCRIBED AUTHORITY THE CIT(E) HELD THAT, IN THE APPLICANTS CASE THER E IS NO SPECIFIC AIM MENTIONED IN THE BY-LAWS/OBJECTS OF THE SOCIETY. IN ADDITION TO THE AIMS OF ESTABLISHING THE EDUCATIONAL INSTITUTION AND ORGANIZING THE SEMINARS ETC, OTHER GENERIC OBJECTS LIKE UNDERTAKING SOCIAL WELFARE ACTIVITIES ETC. HAV E BEEN ENUMERATED AS OTHER AIMS OF THE SOCIETY. 4. FURTHER THE CIT(E) HELD THAT IT WAS ALSO NOT CLA RIFIED HOW THE SOCIETY REDEEMS ITSELF IN SO FAR AS CHARITABLE EDUCATION IS CONCERNED. FAILURE OF THE APPLICANT TO ANSWER QUERIES RAISED DURING THE COURS E OF PROCEEDINGS LEADS ONE TO SAFELY PRESUME THAT IT DID NOT DISCHARGE ITS RES PONSIBILITY TO PROVE HOW ITS INCOME IS NOT EXIGIBLE TO TAXES. THE APPLICANTS CA SE IN THE PAST HAD BEEN REJECTED IN THE PAST BECAUSE OF SIMILAR NON APPEARA NCE. 5. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE PRAY ED THAT SINCE NO PROPER OPPORTUNITY OF BEING HEARD WAS GIVEN TO THE ASSESSE E, THE CASE MAY BE SENT BACK TO THE FILE OF THE CIT(E) TO DECIDE THE ISSUE ON MERITS. 6. THE LD. DR RELIED ON THE ORDER OF THE CIT(E). 7. ON PERUSAL OF THE ORDER OF THE CIT(E), CHANDIGAR H WE OBSERVE THAT IN THE WAS FIXED BEFORE THE LD.CIT(E) ON 04-01-2016,14-01- 2016 AND 18-01-2016. FINALLY HEARING WAS HELD ON 22-01-2016 WHERE IN THE ASSESS EE WAS REQUESTED TO SUBMIT DETAILS OF THE CHARITABLE ACTIVITIES UNDERTAKEN BY THEM BY 25-01-16 .THE ASSESSEE FAILED TO TURN UP ON THE DESIGNATED DATE LEADING TO REJECTION OF THE REGISTRATION. 3 IN VIEW OF THIS WE FIND THAT THE ORDER HAS BEEN PAS SED IN CLEAR VIOLATION OF THE PRINCIPLE OF NATURAL JUSTICE WITHOUT GIVING THE ASS ESSEE A PROPER OPPORTUNITY OF BEING HEARD AND TO FILE RELEVANT DOCUMENTS AND EVID ENCES. IN THIS VIEW, WE FIND IT PROPER TO SENT THE MATTER BACK TO THE FILE OF CI T(E) TO DECIDE THE ISSUE ON MERITS AFTER GIVING NECESSARY PROPER OPPORTUNITY OF BEING HEARD. THE ASSESSEE IS ALSO DIRECTED TO COMPLY WITH THE REQUIREMENTS OF THE CIT (E) PROMPTLY. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED ON 13/07/2017 IN THE OPEN COURT. SD/- SD/- (DIVA SINGH) (DR. B.R.R. KUMA R) JUDICIAL MEMBER ACCOUNTANT MEMBER AG COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DEPARTMENTAL REPRESENTATIVE