De Paul Educational Society, Eluru V. Income tax officer (Exemption), Rajahmundry

ITA 229/VIZ/2021

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 7351 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 04-11-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SHERRY SAMUEL OOMMEN
• Keywords: Opportunity of being heard
• Section: 12A; 12AA

Judgement Text

आयकर अपीऱीयअधिकरण, विशाखापटणम पीठ, विशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM श्री द ु व्ि ू रु आर एऱ रेड्डी, न्याययक सदस्य एिं श्री एस बाऱाक ृ ष्णन, ऱेखा सदस्य के समक्ष BEFORE SHRI DUVVURU RL REDDY, HON’BLE JUDICIAL MEMBER & SHRI S BALAKRISHNAN, HON’BLE ACCOUNTANT MEMBER आयकर अऩीऱ सं./ I.T.A. No.229/Viz/2021 (ननधधारण वषा / Assessment Year :) De Paul Educational Society, Eluru, West Godavari District, Andhra Pradesh PAN: AAAAD 7299 K Vs. CIT (Exemptions), Hyderabad. (अऩीऱधथी/ Appellant) (प्रत्यथी/ Respondent) अऩीऱधथी की ओर से/ Appellant by : Sri Sherry Samuel Oommen, Advocate प्रत्यधथी की ओर से / Respondent by : Sri MN Murthy Naik, CIT-DR स ु नवधई की तधरीख / Date of Hearing : 18/05/2022 घोषणध की तधरीख/Date of Pronouncement : 14/07/2022 O R D E R PER DUVVURU RL REDDY, Judicial Member : This appeal filed by the assessee is against the order of the Ld. CIT (Exemptions), Hyderabad in DIN & Order No. ITBA/Exm/S/EXM1/2020-21/1031842421(1), dated 28/03/2021 passed U/s. 12AA(1)(b)(ii) of the Income Tax Act, 1961. 2 2. In this appeal, there is a delay of 152 days in filing the instant appeals before the Tribunal. The assessee has filed condonation petition. However, as per the decision of the Hon’ble Supreme Court in SMW(A) No.3 of 2020, the period of limitation for filing the appeals under general laws and all special laws falling between 15/3/2020 and 28/02/2022 shall be excluded for calculating the delay. Considering the same, we hereby condone the delay of 152 days in filing the present appeal before the Tribunal and proceed to adjudicate the case on merits. 3. In this appeal the assessee has raised the following concise of grounds of appeal: “1. The Ld. CIT has passed the impugned order in gross violation of natural justice, without application of mind and against the doctrine of f airness. 2. The Ld. Cit has passed the impugned order without granting the appellant an opportunity of being heard and thereby procedurally irregular. 3. The Ld. CIT has passed the impugned order without granting an opportunity of affording necessary explanation on the grounds stated in the impugned order. 4. The impugned order has been passed in violation of the tax payers charter as stipulated under section 119A of the Act. 5. The impugned order has been passed without issuance of a valid show cause notice. The notices issued suffer f rom various procedural inf irmities thereby being bad in law. 6. The impugned order has been passed without f ollowing the procedure prescribed in law. It is trite law that when such procedure is not followed, the act of the authority is a nullity in the eyes of law. 7. The impugned order is a product of a colourable exercise of power apart f rom being manif estly arbitrary. 8. The Ld. CIT has passed the impugned order on grounds alien to section 12AA of the Act and Rule 17A of the Rules. 3 9. The Ld. CIT has f ailed to acknowledge the presumption of genuineness of a document as stated in section 76, 78, 79 of the Evidence Act, 1872. 10. The Ld. CIT has erred in holding that the non-f iling of returns can be a ground f or rejection of application seeking registration having regard to section 12AA(1)(b) of the Act, especially when such offences can be condoned.” 4. Brief facts of the case are that the assessee is an educational society registered under Societies Registration Act XXI of 1860 with Reg No.215/1994. The assessee filed an appeal in Form 10A seeking registration U/s. 12A of the Income Tax Act, 1961 on 25/05/2020. Subsequently, the a notice dated 6/7/2020 was issued to the assessee through ITBA portal as well as speed post to submit its Memorandum of Association/Trust Dee for verification. In response the assessee has furnished certain documents and evidence as called for by the Ld. CIT(Exemptions). On perusal of the documents furnished by the assessee, the Ld. CIT(E) found some discrepancy and therefore the assessee was asked to furnish the details of donations & contributions received with full particulars, receipt books, copy of returns of income filed, computation of income, complete books of accounts, PAN particulars of office bearers for verification vide letter dated 6/67/2020 and 10/02/2021. In the absence of any books of account, documentary evidence and proper explanation in support of the assessee’s claim, the Ld. CIT 4 (E) came to the conclusion that the assessee-society is not fit for grant of registration U/s. 12AA of the Act and accordingly rejected the application in Form 10A filed by the assessee. Aggrieved by the order of the Ld. CIT(E), the assessee is appeal before us. 5. At the outset, the Ld. AR submitted before us that the Ld. CIT (E) has passed the order without providing proper opportunity to the assessee of being heard. The Ld. AR further submitted that if the assessee had been provided a physical hearing / virtual hearing before denying the assessee’s application for registration U/s. 12A of the Act, the assessee would have presented his case effectively along with the supportive documents. It was therefore pleaded that the matter may be remitted back to the file of the Ld CIT (E) in order to provide one more opportunity to the assessee of being heard. Ld. DR, on the other hand, vehemently opposed to the submissions of the Ld. AR and argued that sufficient opportunities had been provided to the assessee however, the assessee could not substantiate its claim for registration U/s. 12A of the Act with cogent documentary evidence. It was further submitted that the Ld. CIT (E) had no other option but to pass order based on the materials available on record. Hence, it was pleaded that the order passed by the Ld. CIT(E) does not call for any interference. 5 6. We have heard the rival submissions and carefully perused the materials on record. On examining the facts of the case, we of the view that if the Ld. CIT (E) finds any discrepancy in the MoA filed by the assessee, wants to clear off his doubts and needs any further documents from the assessee, the assessee should have been given a proper opportunity of being heard physically / virtually to substantiate its claim with supporting documentary evidence following the principles of natural justice. But the Ld. CIT (E) decided the case and denied the grant of registration U/s. 12AA of the Act only based on the documentary evidence whatsoever is available on record. In this situation, we find strength in the arguments advanced by the ld. AR. Therefore, considering the prayer of the Ld. AR, and in the interest of justice, we hereby remit the matter back to the file of Ld. CIT (E) in order to consider the appeal afresh on merits by providing one more opportunity to the assessee of being heard. At the same breath, we also hereby caution the assessee to promptly co-operate before the Ld. CIT (E) in the proceedings failing which the Ld. CIT (E) shall be at liberty to pass appropriate order in accordance with law and merits based on the materials on the record. It is ordered accordingly. 7. In the result, appeal filed by the assessee is allowed for statistical purposes as indicated hereinabove. 6 Pronounced in the open Court on the 14 th July, 2022. Sd/- Sd/- (एस बाऱाक ृ ष्णन) (द ु व्ि ू रु आर.एऱ रेड्डी) (S.BALAKRISHNAN) (DUVVURU RL REDDY) ऱेखा सदस्य/ACCOUNTANT MEMBER न्याययकसदस्य/JUDICIAL MEMBER Dated : 14.07.2022 OKK - SPS आदेश की प्रतिलिपि अग्रेपिि/Copy of the order forwarded to:- 1. ननधधाररती/ The Assessee – De Paul Educational Society, Mssrs Omega Alliance, Advocates and Solicitors, 72/1292 A5 & a6, Ashoka Road, Kaloor Kochi -682017. 2. रधजस्व/The Revenue – The Commissioner of Income Tax (Exemptions), 2 nd Floor, Aayakar Bhawan, Basheer Bagh, Hyderabad, Telangana – 500 004. 3. The Principal Commissioner of Income Tax, 4. आयकर आय ु क्त (अऩीऱ)/ The Commissioner of Income Tax 5. ववभधगीय प्रनतननधध, आयकर अऩीऱीय अधधकरण, ववशधखधऩटणम/ DR, ITAT, Visakhapatnam 6. गधर्ा फ़धईऱ / Guard file आदेशधन ु सधर / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam