Shrimati Prakashvati Ramesh Chandra Shukla Janseva Trust, Lucknow V. CIT(E), Lucknow

ITA 238/LKW/2020

AI Insights

The case involves the Shrimati Prakashvati Ramesh Chandra Shukla Janseva Trust, which appealed against the decision of the Commissioner of Income Tax (Exemption), Lucknow, rejecting their application for registration under section 12AA of the Income Tax Act, 1961. The CIT (Exemption) had rejected the application on the grounds that the trust did not provide sufficient evidence to prove the genuineness of its activities and the charitable nature of its objects. The Tribunal found that the CIT (Exemption) had not adequately notified the trust of the hearing or provided a reasonable opportunity for them to present their case, thus violating the principles of natural justice.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 123050 (ITAT-LUCKNOW)
• Duration Of Justice: 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: A
• Next Hearing Date: 27-11-2022
• Assessment Year: misc
• Appeal Filed On: 19-03-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Principle of natural justice; Set aside
• Section: 12A; 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH “A”, LUCKNOW BEFORE SHRI. MAHAVIR SINGH, VICE PRESIDENT AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA No.238/LKW/2020 Assessment Year: N.A. Shrimati Prakashvati Ramesh Chandra Shukla Janseva Trust 421B, Sector K, Aashiyana Colony Lucknow v. The CIT (Exemption) Lucknow TAN/PAN:AAWTS7684N (Appellant) (Respondent) Appellant by: Shri Jitendra Kumar Yadav, Advocate Respondent by: Shri S. H. Usmani, CIT (DR) Date of hearing: 28 11 2022 Date of pronouncement: 29 11 2022 O R D E R PER BENCH: This appeal by the assessee is arising out of the order of the Commissioner of Income Tax (Exemption), Lucknow, dated 3.2.2020, rejecting the assessee’s application for registration under section 12A of the Income Tax Act, 1961 (hereinafter, ‘the Act’), filed by the assessee on 12.8.2019. 2. The only issue in this appeal of the assessee is against the order of the CIT (Exemption), rejecting the application of the assessee for registration under section 12AA of the I.T. Act, without providing reasonable opportunity of being heard to the assessee and without putting the assessee to notice. For this, the assessee has raised the following grounds, i.e., grounds No.4 & 5: Page 2 of 4 “4. Because, on the facts and in the circumstances of the case, the Ld. CIT(Exemption) further erred in law and on facts in passing the impugned order and without putting the assessee to notice of default of not having attended the hearing, particularly as the assessee was not aware of any hearing in the matter thus violating the principle of natural justice and on which count the impugned order is liable to be quashed and set-aside. 5. Because, on the facts and in the circumstances of the case, the learned Commissioner of Income Tax (Exemption) decided the application of the assessee without affording due opportunity of hearing to the assessee thus violating the principle of natural justice and on which count the impugned order is liable to be quashed and set-aside. 3. We have heard the rival contentions and gone through the facts and circumstances of the case. On behalf of the ld. Counsel for the assessee, Shri Abhinav Mehrotra, Advocate, Shri Jitendra Kumar Yadav, Advocate represented the assessee. On behalf of the Revenue, Shri S. H. Usmani, CIT (DR) was present. We notice that the assessee-trust moved an application under section 12A of the I.T. Act on 12.8.2019, which was fixed for hearing vide letter dated 24.1.2020 through Speed Post as well as through e-filing portal, for compliance on 30.1.2020. On that date, nobody attended nor any adjournment application was received by the CIT (Exemption) and accordingly the CIT (Exemption) proceeded to decide the application without hearing the assessee. The CIT (Exemption) rejected the application of the assessee by observing in paras 3 to 6, as under: “3. On perusal of the material available on record, it is observed that: Page 3 of 4 a. The applicant has not produced original trust deed and other relevant documents required for verification to prove the objects of the trust and the genuineness of the activities. b. No proof/documents regarding activities have been submitted by the applicant. c. No books of accounts were produced or details of the expenditure have been submitted for verification. 4. The section 12AA(1) (a) of the Income-Tax Act, 1961 states that "The Commissioner shall call for such documents or information from the trust or institution as he thinks necessary in order to satisfy himself about the genuineness of the trust or institution". Thus it becomes imperative on the part of the applicant society to provide corroborating evidences regarding the genuineness of the activities of the applicant which is mandated by law. In the absence of such satisfaction, the applicant looses its eligibility for consideration for registration u/s 12A of the Act. 5. In view of the forgoing discussion, it is seen that the applicant has not chosen to file the details required and so it is presumed that the applicant has nothing to say in this regard. Therefore, the registration u/s 12AA cannot be granted for want of required information. 6. In view of the above, it is evident that the applicant has failed to provide the sufficient material to corroborate the charitable nature of the objects and genuineness of the activities. Therefore, the applicant is not considered is eligible to registration u/s 12AA of the Income-tax Act, 1961.” 4. We noted that the CIT (Exemption) rejected the application for registration of the Trust under section 12AA of the I.T. Act only on the premise that the assessee failed to file any evidence, as noted above in the reproduced portion of the CIT(Exemption)’s order. In our view, the CIT (Exemption) only provided one opportunity and that also by sending notice through Speed Post or e-filing portal. It is not evident from the Page 4 of 4 order of the CIT (Exemption) that whether the assessee has received the notice or not and the CIT (Exemption) without allowing reasonable opportunity of being heard, rejected the assessee’s application. In our view, this is not fair and hence we set aside the order of the CIT (Exemption) and remand the matter back to his file for fresh adjudication. Needless to say, the CIT (Exemption) will allow reasonable opportunity of being heard to the assessee and the assessee will file details as called for by the CIT (Exemption) during the course of hearing. In terms of the above, the assessee’s appeal is allowed for statistical purposes. 5. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 29/11/2022. Sd/- Sd/- [GIRISH AGRAWAL] [MAHAVIR SINGH] ACCOUNTANT MEMBER VICE PRESIDENT DATED:29/11/2022 JJ: Copy forwarded to: 1. Appellant 2. Respondent 3. CIT(A) 4. CIT 5. DR