The Marthoma Church Socio Economic Educational & Dev.Society, Kozhencherry V. CIT, Kottayam

ITA 550/COCH/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0985 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 4 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2013
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 28-09-2011
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA; M ANIL KUMAR
• Assessee Lawyers: K I ABRAHAM
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM I.T.A. NO.550/COCH/2011 ASSESSMENT YEAR : - THE MAR THOMA CHURCH SOCIO- ECONOMIC EDUCATIONAL & DEVELOPMENT SOCIETY, ST. THOMAS MAR THOMA CHURCH OFFICE, KOZHENCHERRY. [PAN:AACAT 0635R] VS. THE COMMISSIONER OF INCOME-TAX, KOTTAYAM. (ASSESSEE -APPELLANT) (REVENUE-R ESPONDENT) ASSESSEE BY SHRI K.I. ABRAHAM, CA REVENUE BY SMT. S. VIJAYAPRABHA, JR. DR & SHRI M. ANIL KUMAR, CIT(DR) DATE OF HEARING 18/12/2012 DATE OF PRONOUNCEMENT 15/02/2013 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 01-09-2011 PASSED BY THE LD. CIT, KOTTAYAM, REFUSING TO GRANT REGISTR ATION U/S. 12AA OF THE ACT. AGGRIEVED BY THE SAID ORDER OF LD CIT, THE ASSESSEE HAS FILED THIS APPEAL BEFORE US. 2. THE FACTS RELATING TO THE ISSUE ARE STATED IN BR IEF. THE ASSESSEE-SOCIETY WAS FORMED ON 26-09-1988 AND IT FILED AN APPLICATION IN THE PRESCRIBED FORM NO. 10A BEFORE THE LD. CIT, KOTTAYAM ON 28-03-2011 SEEKING REGISTR ATION U/S. 12AA OF THE INCOME TAX ACT. HOWEVER, THE LD. CIT REJECTED THE APPLICATION WITH THE FOLLOWING OBSERVATIONS:- 3. A REPORT ON THE APPLICATION WAS CALLED FOR FRO M THE ASSESSING OFFICER AND THE JT. COMMISSIONER OF INCOME TAX, THIRUVALLA RAN GE. IN THE REPORTS FURNISHED BY THEM, IT IS STATED THAT AS PER THE ACTIVITY REP ORT FILED BY THE APPLICANT, THE ONLY ACTIVITY OF THE SOCIETY IS MANAGING A SCHOOL AFFIL IATED TO CBSE. BUT AS PER THE INCOME SIDE OF THE INCOME & EXPENDITURE STATEMENT, THE SOCIETY HAS BEEN I.T.A. NO.550/COCH/2011 2 RECEIVING ENTRANCE COACHING FEE FROM VIET AND BRIL LIANT DURING ALL THE PREVIOUS YEARS. FURTHER, THE SOCIETY HAS NO PROPERTY OF IT OWN. NO BUILDING OR ROOM IS TAKEN ON RENT/LEASE FOR THE FUNCTIONING OF THE SOC IETY. 4. FOR THE REASONS STATED IN THE ASSESSING OFFICE RS REPORT, I AM NOT SATISFIED MYSELF ABOUT THE OBJECTS OF THE INSTITUTION AND TH E GENUINENESS OF ITS ACTIVITIES. THEREFORE, THE APPLICATION FILED BY ASSESSEE FOR R EGISTRATION U/S. 12AA OF THE INCOME TAX ACT, 1961 STANDS REJECTED. 3. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE COMMISSIONER OF INCOME- TAX HAS TAKEN THE ADVERSE DECISION AGAINST THE ASSE SSEE ON THE BASIS OF REPORTS OBTAINED BY HIM FROM THE ASSESSING OFFICER AND THE JOINT COMMISSIONER OF INCOME-TAX. HOWEVER, BEFORE TAKING THE DECISION AGAINST THE ASS ESSEE, THE LD CIT SHOULD HAVE PROVIDED AN OPPORTUNITY TO EXPLAIN THE ADVERSE REMA RKS, IF ANY IN THE SAID REPORTS. ACCORDINGLY, THE LD A.R CONTENDED THAT THE IMPUGNED ORDER PASSED BY THE LD. CIT IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE AND THERE FORE, THE SAID ORDER IS LIABLE TO BE QUASHED. IN THIS CONNECTION, THE LD. COUNSEL RELIE D ON THE DECISION OF THE HONBLE JURISDICTIONAL KERALA HIGH COURT IN THE CASE OF ADA RSHA VIDYANIDHI TRUST VS. CIT (292 ITR 465). 4. ON THE OTHER HAND, THE LD. DR SUBMITTED THAT THE ASSESSEE HAS BEEN, INTER ALIA, RECEIVING ENTRANCE COACHING FEE FROM VIET AND BRILL IANT. THE LD. DR SUBMITTED THAT THE EDUCATION CONTEMPLATED U/S. 2(15) OF THE ACT IS ONL Y THE FORMAL EDUCATION. THE LD D.R SUBMITTED THAT THE COACHING GIVEN THROUGH COACH ING CLASSES SHALL NOT FALL IN THE CATEGORY OF FORMAL EDUCATION AND THE SAME WOULD BE OUTSIDE THE SCOPE OF CHARITABLE ACTIVITY AS DEFINED U/S 2(15) OF THE ACT. 5. IN A REJOINDER, THE LD. COUNSEL FOR THE ASSE SSEE SUBMITTED THAT THE ASSESSEE DID NOT CARRY ON THE ACTIVITY OF GIVING COACHING THROUG H THE COACHING CLASSES, BUT IT HAS MERELY COLLECTED THE FEES FROM THE STUDENTS ON BEHA LF OF THE COACHING INSTITUTIONS AND REMITTED THE SAME TO THE CONCERNED COACHING CENTRES . I.T.A. NO.550/COCH/2011 3 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE RECORD. ADMITTEDLY, THE LD. CIT(A) HAS TAKEN AN ADVERSE DEC ISION AGAINST THE ASSESSEE ON THE BASIS OF THE REPORTS OBTAINED FROM THE ASSESSING OF FICER AND THE JT. COMMISSIONER OF INCOME-TAX. THE CASE OF THE ASSESSEE IS THAT THE S AID REPORTS WERE NOT PUT BEFORE IT AND HENCE THE OPPORTUNITY WAS NOT PROVIDED TO IT TO SUBMIT ITS VIEW ON THE ADVERSE REMARKS, IF ANY, MADE BY THE LOWER AUTHORITIES. TH E DEPARTMENT DID NOT SHOW TO US THAT THE ASSESSEE WAS GIVEN NECESSARY OPPORTUNITY O F BEING HEARD. THUS, WE NOTICE THAT THE LD. CIT HAS TAKEN THE DECISION ON THE BASI S OF REPORTS SUBMITTED BY THE LOWER AUTHORITIES WITHOUT GIVING ANY OPPORTUNITY OF BEING HEARD TO THE ASSESSEE TO REBUT THE ADVERSE REMARKS, IF ANY IN THE SAID REPORTS. THUS THE SAID ACTION OF LD CIT VIOLATES THE PRINCIPLES OF NATURAL JUSTICE. UNDER THESE CIRCUMS TANCES, AS OBSERVED IN THE DECISION OF THE HONBLE JURISDICTIONAL KERALA HIGH COURT IN THE CASE OF ADARSHA VIDYANIDHI TRUST VS. CIT, REFERRED SUPRA, THE ORDER PASSED BY THE LD. CI T CANNOT BE TREATED AS A VALID ONE AND IS LIABLE TO BE QUASHED. 7. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LD. C IT AND RESTORE THE MATTER BACK TO HIS FILE WITH A DIRECTION TO CONSIDER THE APPLICATI ON FILED BY THE ASSESSEE AFRESH AFTER AFFORDING NECESSARY OPPORTUNITY OF BEING HEARD TO T HE ASSESSEE; AFTER OBTAINING THE REPLY FROM THE ASSESSEE ON THE REPORTS SUBMITTED BY THE LOWER AUTHORITIES AND THEN TAKE APPROPRIATE DECISION IN ACCORDANCE WITH LAW. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED ACCORDINGLY ON 15-02-20 13. SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 15TH FEBRUARY, 2013 GJ I.T.A. NO.550/COCH/2011 4 COPY TO: 1. THE MAR THOMA CHURCH SOCIO- ECONOMIC EDUCATIONAL & DEVELOPMENT SOCIETY, ST. THOMAS MAR THOMA CHURCH OFFICE, KOZHENCHERRY. 2. THE COMMISSIONER OF INCOME-TAX, KOTTAYAM. 3. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 4. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR ) I.T.A.T, COCHIN