Hyderabad Science Society , Hyderabad V. Commissioner of Income Tax, (Exemptions), Hyderabad

ITA 361/Hyd/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6963 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 16-07-2021
• Assessment Year: misc
• Appeal Filed On: 18-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P MURALI MOHANA RAO
• Keywords: Set aside
• Section: 12AA; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER I.T.A. NO. 361/HYD/2019 HYDERABAD SCIENCE SOCIETY, HYDERABAD [PAN: AAATH3789F] VS THE COMMISSIONER OF INCOME TAX (EXEMPTIONS), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI P.MURALI MOHANA RAO, AR FOR REVENUE : SHRI RAJENDRA KUMAR, DR DATE OF HEARING : 16-07-2021 DATE OF PRONOUNCEMENT : 07-09-2021 O R D E R PER S.S.GODARA, J.M. : THIS ASSESSEES APPEAL ARISES FROM THE CIT(EXEMPTION S)- HYDERABADS ORDER DATED 31-12-2018 PASSED IN F.NO. C IT(E) / HYD / 12AA(3) / 2018-19, IN PROCEEDINGS U/S.12AA(3) R.W.S.12AA(4) OF THE INCOME TAX ACT, 1961 [IN SHORT, THE ACT]. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. THE ASSESSEE HAS PLEADED THE FOLLOWING SUBSTANTIVE GROUNDS IN THE INSTANT APPEAL: 1.THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (EXEMPTIONS) HYD. DT.31-12-2018 PASSED U/S12AA(3) AND 12AA(4) CA NCELLING REGISTRATION IS CONTRARY TO LAW AND FACTS. 2.THE LEARNED COMMISSIONER OF INCOME TAX (EXEMPTION S) ERRED IN CONCLUDING THAT THE APPELLANT SOCIETY HAS INDULGED IN PROMOTING ITA NO. 361/HYD/2019 :- 2 -: FRAUDULENT TRANSACTIONS. THE APPELLANT SOCIETY DENI ES THE SAID ALLEGATION. 3.THE LEARNED COMMISSIONER OF INCOME TAX (EXEMPTION S) ERRED IN NOT APPRECIATING THAT THE APPELLANT HAS CARRIED ON ACTI VITIES ONLY IN PROMOTING SCIENCE AND TECHNOLOGY FOR CHARITABLE PUR POSES AND HAS NOT CARRIED ON ANY ACTIVITY CONTRARY TO THE OBJECTS . 4.THE APPELLANT CONTENDS THAT THE ASSUMPTIONS MADE BY THE LEARNED COMMISSIONER OF INCOME TAX (EXEMPTIONS) IN ARRIVING AT THE CONCLUSION THAT THE TRANSACTIONS RELATING TO THE RECEIPT OF DO NATIONS ARE FRAUDULENT, IS ERRONEOUS AND UNTENABLE. 5.THE APPELLANT DENIES ANY VIOLATION OF SECTION 13 OF THE I.T ACT. THE LEARNED COMMISSIONER OF INCOME TAX(EXEMPTION) WAS I N ERROR IN CONCLUDING THAT THERE WAS VIOLATION OF SECTION 13 O F THE I.T ACT. 6.THE APPELLANT CONTENDS THAT THE LEARNED COMMISSIO NER OF INCOME TAX (EXEMPTIONS) ERRED IN CONCLUDING THAT THE APPEL LANT SOCIETY FRAUDULENTLY CLAIMED EXEMPTION U/S.35. NO SUCH CLAI M OF APPROVAL U/S 35(1)(II) OF THE - I.T ACT WAS MADE. THE SAID A LLEGATION IS DENIED BY THE APPELLANT. 7.THE LEARNED COMMISSIONER OF INCOME TAX (EXEMPTION S) ERRED IN CONCLUDING THAT THE ACTIVITIES ARE NOT AS PER THE O BJECTS AND THE APPELLANT SOCIETY HAS UNDERTAKEN FRAUDULENT ACTIVIT Y OF PROVIDING THE SO CALLED DONATIONS/PROJECT. THE SAID ALLEGATION IS DENIED. 8.THE LEARNED COMMISSIONER OF INCOME TAX (EXEMPTION S) ERRED IN NOT CONSIDERING THAT THE APPELLANT SOCIETY ACTED BONAFI DE AT ALL TIMES AND HAS NOT KNOWINGLY INDULGED ANY ACT ILLEGAL OR FRAUD ULENT. THE APPELLANT SOCIETY ONLY CARRIED ON THE OBJECTS FOR W HICH IT WAS INCORPORATED AND SPENT THE MONEYS. 9.THE ORDER PASSED U/S 12AA(3) READ WITH AND / OR S ECTION 12AA(4) OF THE I.T ACT IS UNTENABLE AND THE SAME DESERVES T O BE SET ASIDE. 10.THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTE R ANY OF THE AFORESAID GROUND AS THE OCCASION MAY REQUIRE. FOR THESE AND OTHER REASONS THAT WILL BE SUBMITTED AT THE TIME OF HEARING IT IS PRAYED THAT THE IMPUGNED ORDER DT.31- 12-2018 PASSED U/S 12AA(3) READ WITH AND / OR SECTION 12AA(4) OF T HE I.T ACT BE SET ASIDE AND THE REGISTRATION OF THE APPELLANT BE REST ORED. 3. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RIVAL CONTENTIONS AGAINST AND IN SUPPORT OF THE CORRECTNESS OF THE CIT(E)S ORDER UNDER CHALLENGE CANCELLING THE ASSESS EES SECTION 12AA REGISTRATION. WE FIND NO REASON TO EXPRES S OUR AGREEMENT WITH THE REVENUES ARGUMENTS SUPPORTING THE ITA NO. 361/HYD/2019 :- 3 -: SAME. THIS IS FOR THE PRECISE REASON THAT THE CIT(E) PASSED HIS IMPUGNED ORDER IN FURTHERANCE TO THE CORRESPONDING SHO W CAUSE NOTICE DT.08-02-2018 (PAGE NOS.20 TO 22) WHICH H AD IN FACT BEEN ISSUED BY THE DCIT(E) ONLY. THIS LATTER AUTHO RITY HAS NOWHERE BEEN VESTED ANY JURISDICTION TO ISSUE SUCH A S HOW CAUSE NOTICE U/S.12AA OF THE ACT. CASE LAW CIT VS. MODERN SCHOOL SOCIETY (2020) [114 TAXMANN.COM 587] (SC) HOL DS THAT WHILST AFFIRMING THE CORRESPONDING HON'BLE HIGH COURT S JUDGMENT (2018) [99 TAXMANN.COM 379] (RAJ) THAT ANY ORD ER PASSED UNDER THE PROVISIONS OF THE ACT BY AN AUTHORITY WITHOUT HAVING ANY JURISDICTION IS A NON EST ACTION ONLY. 4. LEARNED CIT-DR FAILS TO DISPUTE THAT THE CIT(E) HAD NOT ISSUED ANY OTHER SHOW CAUSE NOTICE PROPOSING TO FINAL ISE THE IMPUGNED ACTION. WE THEREFORE HOLD THAT THE CIT(E)S IMPUGNED ORDER IS NOT SUSTAINABLE ON LAW SINCE BASED ON AN INVALID SHOW CAUSE NOTICE. QUASHED ACCORDINGLY. ALL OTHER PLEADINGS ON MERITS ARE RENDERED ACADEMIC. 5. THIS ASSESSEES APPEAL IS ALLOWED IN ABOVE TERMS. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH SEPTEMBER, 2021 SD/- SD/- (LAXMI PRASAD SAHU) (S.S.G ODARA) ACCOUNTANT MEMBER JUDICIAL MEM BER HYDERABAD, DATED: 07-09-2021 TNMM ITA NO. 361/HYD/2019 :- 4 -: COPY TO : 1.HYDERABAD SCIENCE SOCIETY, C/O.P.MURALI & CO., CHARTERED ACCOUNTANTS, 6-3-655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD. 2.THE COMMISSIONER OF INCOME TAX (EXEMPTIONS) , HYDERABAD. 3.ADD.CIT(EXEMPTIONS)-HYDERABAD. 4.D.R. ITAT, HYDERABAD. 5.GUARD FILE.