Panaskhala Anchalika Water Users Association, V. CIT, Bhubaneswar

ITA 394/CTK/2011

• Counselvise Citation: 39422114 RSA 2011
• Duration Of Justice: 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2011
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 29-11-2011
• Assessment Year: misc
• Appeal Filed On: 09-09-2011
• Court: TRIBUNAL
• Department Lawyers: A BHATTACHARJEE
• Assessee Lawyers: B S SUBUDHI
• Keywords: Opportunity of being heard; Principle of natural justice

Judgement Text

IN THE INC O ME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE : SHRI K.K.GUPTA, AM , AND SHRI K.S.S.PRASAD RAO, JM ITA NO. 394/CTK/2011 PANASKHALA A N HCHALIKA WATER USERS ASSOCIATION, AT/P.O.PAHADAJHOLA, DIST. NAYAGARH, ORISSA PAN: AATP 56692 F VERSUS COMMISSIONER OF INCOME - TAX, BHUBANESWAR. (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI B.S.SUBUDHI, AR FOR THE RESPONDENT SHRI A.BHATTACHARJEE, DR DATE OF HEARING : 29.11.2011 DATE OF PRONOUNCEMENT : 22.12.2011 ORDER SHRI K.S.S. PRASAD RAO, JM : THIS APPEAL IS BY THE ASSESSEE HAVING BEEN AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX DT.30.5.2011. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL. (1) THE CIT HAS ERRED IN REJECTING THE APPLICATION OF THE ASSESSEE U/S.12AA OF THE I.T.ACT WITHOUT GIVING ADEQUATE OPPORTUNITY TO THE ASSESSEE TO PRESENT ITS CASE. (2) THE CIT HAS ERRED IN REJECTING THE REVIEW PETITION FILED BY THE ASSESSEE FOR RECONSIDERATION OF HIS DECISION AND REQUESTED FOR AN OPPORTUNIT Y TO HEAR THE CASE ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. BOTH THE PARTIES WERE HEARD REGARDING THE ISSUES RAISED IN THE RESPECTIVE APPEALS AND THEIR LEGAL IMPLICATIONS. 4. ON CAREFUL CONSIDERATION OF THE MATERIAL MADE AVAILABLE TO THE TRIBUNAL A ND ANALYZING THE SAME IN THE LIGHT OF THE SUBMISSIONS OF BOTH THE PARTIES, THE UNDISPUTED FACTS RELATING TO THE ISSUES ARE THAT THE ASSESSEE HAS FILED A PETITION U/S.12AA OF THE INCOME - TAX ACT,1961 FOR REGISTRATION. THE LEARNED CIT FIXED THE CASE FOR HEARI NG ON 14.4.2011. THE DAY OF 14.4.2011 WAS A PUBLIC HOLIDAY AS PER THE LIST OF HOLIDAYS OF THE I.T.DEPARTMENT BEING THE BIRTH DAY OF DR.B.R.AMBEDKAR. THE LEARNED CIT PASSED THE ORDER U/S.12AA OF THE ACT ITA NO.394/CTK/2011 2 WITHOUT GIVING FURTHER OPPORTUNITY TO THE ASSESSEE. AF TER RECEIVING THE ORDER, THE ASSESSEE HAS FILED REVIEW PETITION BEFORE THE LEARNED CIT FOR GIVING AN OPPORTUNITY OF BEING HEARD AND RECONSIDER THE ORDER U/S.12AA. THE LEARNED CIT HAS DECLINED TO GIVE OPPORTUNITY AND REJECTED THE REVIEW PETITION ALSO. HENC E, THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 5. DURING THE COURSE OF HEARING, THE LEARNED AR OF THE ASSESSEE HAS VEHEMENTLY ARGUED CONTENDING INTERALIA THAT THE LEARNED CIT WHILE CONSIDERING THE APPLICATION OF THE ASSESSEE U/S.12AA OF THE ACT AS A QUASHI - JUDICIAL AUTHORITY, HE IS EXPECTED TO FOLLOW THE PRINCIPLES OF NATURAL JUSTICE. IN THE ORDER PASSED BY THE LEARNED CIT(A), IT IS CLEAR THAT THE APPLICATION WAS FILED ON 22.11.2010 FOR GRANT OF REGISTRATION U/S.12AA OF THE ACT., THE LEAR NED CI?T HAS FIXED THE HEARING ON 14.4.2011 AND ASKED THE ASSESSEE TO PRODUCE THE DOCUMENTS AND BOOKS OF ACCOUNTS MAINTAINED IN SUPPORT OF ITS CLAIM THAT IT IS ENGAGED IN CHARITABLE ACTIVITIES HOWEVER, ON THE STIPULATED DATE NEITHER COMPLIANCE WAS MADE BY THE ASSESSEE NOR ADJOURNMENT PETITION WAS FILED. IN THE LIGHT OF THE ABOVE, THE GENUINENESS OF THE ACTIVITIES OF THE SOCIETY COULD NOT BE ESTABLISHED BEYOND REASONABLE DOUBT DUE TO NON - COMPLIANCE OF TO THE NOTICE AND IN THE ABSENCE OF BOOKS OF ACCOUNT. THU S OBSERVING THE LEARNED CIT(A) REJECTED THE APPLICATION FILED BY THE ASSESSEE FOR REGISTRATION U/S.12AA OF THE I.T.ACT. THE ORDER THUS DISCLOSED THAT THE LEARNED CIT HAS GIVEN ON LY NE HEARING THAT TOO ON A PUBLIC HOLIDAY OF THE I.T.DEPARTMENT. EVEN THEN TH E LEARNED CIT HAS NOT EVEN GIVEN ANOTHER OPPORTUNITY FIXING THE CASE ON ANY WORKING DAY FOR HEARING TO THE ASSESSEE AND SUBMISSION OF RECORDS AS REQUIRED BY HIM. THE ACT OF THE LEARNED CIT(A) , AS CAN BE SEEN FROM THE ORDER ITSELF, IS NOT ALL IN COMPLIANCE WITH THE PRINCIPLES OF NATURAL JUSTICE WHICH THE AUTHORITY UNDER THE I.T.ACT IS EXPECTED TO FOLLOW. THEREFORE, THE ORDER PASSED ITA NO.394/CTK/2011 3 BY THE LEARNED CIT IS NOT SUSTAINABLE FOR LEGAL SCRUTINY AND HE, THEREFORE, SOUGHT FOR SETTING ASIDE THE SAME BY ALLOWING THE APPEAL OF THE ASSESSEE. 6. CONTRARY TO THIS, THE LEARNED DR HAS ARGUED THAT THE ASSESSEE IF REALLY INTERESTED IN PROSECUTING OF ITS APPLICATION IT WOULD HAVE BROUGHT TO THE NOTICE OF THE LEARNED CIT THAT HEARING DATE FIXED FOR HEARING WAS A CLOSED HOLIDAYS OF THE I.T. DEPARTMENT AND HENCE, OUGHT TO HAVE SOUGHT ANOTHER DATE OF HEARING ON WHICH HE COULD PRODUCE THE DOCUMENTS ETC., AS REQUIRED BY THE NOTICE OF THE LEARNED CIT. INSTEAD OF DOING THAT, THE ASSESSEE HAS REMAINED SILENT AND AFTER RECEIVING THE ORDE R, FILED A REVIEW PETITION BEFORE THE LEARNED CIT. THE LEARNED CIT IS WELL WITHIN HIS POWER IN REJECTING THE REVIEW PETITION BECAUSE THE ASSESSEE HAS NOT COMPLIED WITH THE NOTICE OF HEARING SENT BY THE LEARNED CIT. THEREFORE, IN THESE FACTS AND CIRCUMSTAN CES OF THE CASE, THE ORDER PASSED BY THE LEARNED CIT IS NOT ALL INFIRMED ANYWAY REQUIRING ANY INTERFERENCE AND HE SOUGHT FOR DISMISSAL OF THE APPEAL FILED BY THE ASSESSEE BY UPHOLDING THE ORDER OF THE LEARNED CIT. 7. ON CAREFUL ANALYSIS OF THE ORDER PASSED BY THE LEARNED CIT, IT IS FOUND THAT UNDISPUTEDLY THE ASSESSEE HAS FILED AN APPLICATION FOR REGISTRATION U/S.12AA OF THE I.T.ACT AND THE LEARNED CIT HAS ISSUED NOTICE OF HEARING OF THE SAID APPLICATION FIXING THE DATE ON 14.4.2011 AND REQUIRED THE ASSESSE E TO PRODUCE THE BOOKS OF ACCOUNT ETC., AS NOTED IN THE SAID NOTICE. AS CAN BE SEEN FROM THE GAZETTE EXTRACT DT.21.3. 2011, IT IS DECLARED DT.14.4.201 1 AS A CLOSED HOLIDAY ON ACCOUNT OF THE BIRTHDAY OF DR.B. R.AMBEDKAR. THEREFORE, THE LEARNED CIT OUGHT NOT HAVE FIXED THAT DATE FOR HEARING OF THE CASE. AS DT.14.4.2011 WAS A HOLIDAY, THE ASSESSEE HAS NOT APPEARED BEFORE THE LEARNED CIT WITH THE REQUIRED DOCUMENTS AS PER THE NOTICE ISSUED BY THE LEARNED CIT. THE LEARNED CIT HAS PASSED THE IMPUGNED ORDER OBSERV ING THAT AS THE ASSESSEE HAS NOT COMPLIED WITH THE NOTICE NOR PRODUCED THE ITA NO.394/CTK/2011 4 DOCUMENTS AS REQUIRED IN THE NOTICE, IT IS DIFFICULT FOR HIM TO COME TO A CONCLUSION AS TO THE ACTIVITIES OF THE ASSESSEE ARE BEING CHARITABLE OR NOT. ACCORDINGLY, HE REJECTED THE A PPLICATION OF THE ASSESSEE FOR REGISTRATION U/S.12AA. AFTER RECEIVING THE ORDER, UNDISPUTEDLY THE ASSESSEE HAS MOVED A REVIEW PETITION BEFORE THE LEARNED CIT VENTILATING THAT THE DATE OF HEARING 14.4.2011 FIXED BY THE LEARNED CIT WAS HAPPENED TO BE A HOLID AY AND HENCE, THE ASSESSEE COULD NOT APPEAR BEFORE THE LEARNED CIT ANDPRODUCE THE REQUIRED DOCUMENTS AND SOUGHT FOR REVIEW OF ITS ORDER. BUT THE LEARNED CIT HAS NOT ACCEPTED THAT APPLICATION ALSO. HENCE, THE ASSESSEE FILED THIS APPEAL BEFORE THE TRIBUNAL. 8. ON CAREFUL CONSIDERATION OF THE FACTUAL ASPECTS, IT IS FOUND THAT THE LEARNED CIT BEING A QUASHI - JUDICIAL AUTHORITY IS UNDOUBTEDLY IS EXPECTED TO FOLLOW THE RULES OF PRINCIPLES OF NATURAL JUSTICE WHICH REQUIRES THE AUTHORITY TO GIVE REASONABLE AND PRO PER OPPORTUNITY OF BEING HEARD TO THE APPLICANT. AS CAN BE SEEN FROM THE TENOR OF THE IMPUGNED ORDER, IT IS FOUND THAT THE LEARNED CIT HAS FIXED ONLY ONE DATE FOR HEARING THE ASSESSEE ON THE APPLICATION FILED BY THE ASSESSEE U/S.12AA AND THAT BEING A CLOSE D HOLIDAY, THE ASSESSEE HAS NOT APPEARED UNDER THE IMPRESSION THAT BEING A CLOSED HOLIDAY, THE LEARNED CITS OFFICE WILL NOT BE FUNCTIONING TO RECEIVE THE DOCUMENTS AS WELL AS THE REPRESENTATIVE OF THE ASSESSEE. THIS IS A NATURAL EXPECTATION OF A HUMAN BE ING THAT THE LEARNED CIT(A) HAS PASSED THE IMPUGNED ORDER ON THE APPLICATION OF THE ASSESSEE OBSERVING THAT AS THE ASSESSEE HAS NOT COMPLIED WITH THE NOTICES ISSUED BY HIM, HE IS NOT ABLE TO ADJUDICATE THE ELIGIBILITY OF THE ASSESSEE FOR REGISTRATION U/S.1 2AA. BUT THE ASSESSEE HAS FILED A REVIEW PETITION REQUESTING FOR REVIEW OF THE ORDER OF THE LEARNED CIT. EVEN THAT APPLICATION WAS ALSO NOT ACCEPTED BY THE LEARNED CIT. THEREFORE, WE ARE OF CONSIDERED VIEW THAT THE ACTION OF THE CIT IN PASSING THE ITA NO.394/CTK/2011 5 IMPUGNED ORDER IS NOT IN ACCORDANCE WITH THE PRINCIPLES OF NATURAL JUSTICE. HENCE, WE ARE OF THE CONSIDERED VIEW THAT THIS IS A FIT CASE TO SET ASIDE THE ORDER OF THE LEARNED CIT AND RESTORE THE CASE TO THE FILE OF THE LEARNED CIT FOR DE NOVO CONSIDERATION OF THE APPLICATION OF THE ASSESSEE BY AFFORDING REASONABLE AND PROPER OPPORTUNITY OF BEING HEARD TO MAKE OUT A CASE BEFORE HIM. WITH THIS DIRECTION, THE MATTER IS RESTORED TO THE FILE OF THE LEARNED CIT FOR DE NOVO CONSIDERATION OF THE APPLICATION FILED BY THE AS SESSEE U/S.12AA STRICTLY FOLLOWING THE PRINCIPLES OF NATURAL JUSTICE AND PASS NECESSARY CONSEQUENTIAL ORDER AS PER LAW . 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. S D/ - S D/ - (K.K.GUPTA) ACCOUNTANT MEMBER ( K.S.S.PRASAD RAO) JUDICIAL MEMBER DATE: 22.12.2011 H.K.PADHEE, SENIOR PRIVATE SECRETARY. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT: PANASKHALA AHCHALIKA WATER USERS ASSOCIATION, AT/P.O.PAHADAJHOL A, DIST. NAYAGARH, ORISSA 2. THE RESPONDENT: COMMISSIONER OF INCOME - TAX, BHUBANESWAR. 3. THE CIT, 4. THE CIT(A), 5. THE DR, CUTTACK 6. GUARD FILE (IN DUPLICATE) TRUE COPY, BY ORDER, SENIOR PRIVAT E SECRETARY.