SHRI MATA JI EDUCATIONAL TRUST, JAMMU & KASHMIR V. COMMISSIONER OF INCOME TAX(EXEMPTIONS), CHANDIGARH

ITA 581/ASR/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0007 (ITAT-AMRITSAR)
• Duration Of Justice: 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 28-05-2019
• Assessment Year: 2018-2019
• Appeal Filed On: 27-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANDEEP CHOUHAN
• Assessee Lawyers: P N ARORA LD
• Keywords: Opportunity of being heard; Principle of natural justice; Set aside
• Section: 12A; 12AA; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. SANAJY ARORA, ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER ITA NO.581 (ASR)/2018 ASSESSMENT YEAR: 2018-19 SHRI MATA JI EDUCATIONAL TRUST NEW NATIONAL HR. SR. SEC SCHOOL, TALIMORHMIRANSAHAB, R.S. PURA, J & K 181101 [PAN/TAN:AAVTS1646P] VS. CIT (EXEMPTIONS), C.R. BUILDING, 5 TH FLOOR SECTION 17-E, CHANDIGARH (APPELLANT) (RESPONDENT) APPELLANT BY : SH. P N ARORA(LD. ADVOCATE) RESPONDENT BY : SH. SANDEEP CHOUHAN (CIT, DR) DATE OF HEARING : 28-05-2019 DATE OF PRONOUNCEMENT : 30-05-2019 ORDER PER N.K.CHOUDHRY, JM: THIS IS AN APPEAL PREFERRED BY THE ASSESSEE TRUST (HEREINAFTER CALLED AS THE APPELLANT) AGAINST THE ORD ER DATED 29- 09-2018 , IMPUGNED HEREIN, PASSED BY THE LD. CIT (EXEMPTIONS), CHANDIGARH, WHEREBY THE LD. CIT(E) REJ ECTED THE APPLICATION FOR REGISTRATION U/S 12AA OF THE I.T. ACT, 1961 (HEREINAFTER CALLED AS THE ACT). 2. BRIEF FACTS OF THE CASE ARE THAT THE APPELLANT IS AN ONGOING ENTITY AND IS IN OPERATION SINCE 01-12-2017 AND HAD APPLIED FOR REGISTRATION UNDER SECTION 12AA OF THE ACT, ON DATED 30 -03-2018 BEFORE THE LD. CIT(E). THE APPLICATION OF THE APPELL ANT WAS TAKEN INTO CONSIDERATION AND VIDE SHOW CAUSE NOTICE DT.06-08-20 18 ITA NO.581 (ASR)/2018 SHRI MATA JI EDUCATIONAL TRUST VS CIT(E) 2 THE APPELLANT WAS ASKED TO SUBMIT DETAILS/CLARIFICATIO N AS MENTIONED IN PARA 5 OF THE IMPUGNED ORDER, ON OR BE FORE 20/08/2017. THE SAID SHOW CAUSE NOTICE DATED 06-08-2018 WAS REPLIED BY THE APPELLANT BY FILING THE REPLY AND DO CUMENTS. THEREAFTER FURTHER QUERIES HAVE BEEN RAISED VIDE EMAI L DATED 22- 09-2018 AND ASKED TO SUBMIT BY 25-08-2018 AGAINST WHICH THE APPELLANT SUBMITTED THE REPLY ON 24-08-2018. THEREA FTER AGAIN VIDE EMAIL DATED 28-09-2018 (12:10:43PM), THE APPEL LANT WAS ASKED TO SUBMIT FURTHER DOCUMENTS AND DETAILS BY 5:30 PM ON THE VERY SAME DATE, WHICH ALSO COMPLIED AND REPLIED BY THE APPELLANT, HOWEVER THE LD. CIT(E) STILL REJECTED THE APPLICATION UNDER SECTION 12AA OF THE ACT BY CITED THE REASONS THAT T HE APPELLANT FAILED TO PROVIDE EVIDENCE QUA EXISTENCE OF TRUST AS BONAFIDE OR NOT, FURTHER NO EVIDENCE HAS BEEN FILED B Y THE APPELLANT QUA DISSOLUTION OF THE TRUST , FURTHER NO D ETAILS OF PREVIOUS ENTITY HAVE BEEN FILED QUA COVERING UNDER EX EMPTION OR NOT, FURTHER TAKEOVER OF SCHOOL BY THE APPELLANT HAS NOT BEEN CLEARLY BROUGHT OUT IN THE CASE. 3. THE ASSESSEE ON BEING AGGRIEVED PREFERRED THE INSTANT APPEAL AND RAISED THE ISSUE THAT THOUGH ALL THE SHOW CAU SE NOTICES HAVE BEEN PROPERLY REPLIED WITH DOCUMENTS AND E VEN THE LD. CIT (E) VIDE EMAIL DATED 28-09-2018 (12:10:43PM ), GIVEN 04 HOURS ONLY FOR FILLING THE RELEVANT DOCUMENTS AND REPLY BUT STILL THE APPELLANT COMPLIED WITH THE NOTICE AND FILE D THE RELEVANT DOCUMENTS, HOWEVER STILL THE LD. CIT(E) HAS NOT TAKEN NOTE OF LAST REPLY AND DOCUMENTS SUBMITTED BY THE APPELLANT AN D THUS AMOUNTS TO NON-APPLICATION OF MIND AND AGAINST THE RU LE OF AUDI ALTERAMPARTEM , BECAUSE BEFORE REJECTED THE APPLICATION U/S 12A ITA NO.581 (ASR)/2018 SHRI MATA JI EDUCATIONAL TRUST VS CIT(E) 3 OF THE ACT, NO OPPORTUNITY OF BEING HEARD HAS BEEN GI VEN EXCEPT ASKING THE REPLY AND DOCUMENTS BY VARIOUS NOTICES. 4. HAVING HEARD THE PARTIES AT LENGTH AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD, THE LD. AR EMPHASIZ ED THAT THE ORDER UNDER CHALLENGE SUFFERS FROM PERVERSITY, ILLEGALI TY AND IMPROPRIETY AND THEREFORE IS LIABLE TO BE SET ASIDE. O N THE CONTRARY THE LD. CIT DR RELIED UPON THE ORDER PASSED B Y THE LD. CIT(E) AND SUBMITTED THAT THE LD. CIT(E) HAS PASSED TH E WELL REASONED ORDER AND THEREFORE DOES NOT REQUIRE ANY IN TERFERENCE AND CONSEQUENTLY THE APPEAL FILED BY THE APPELLANT IS LIABLE TO BE DISMISSED. 4.1 FROM THE ORDER IT REFLECTS THAT IN PARA NOS. 3 AND 4 , THE LD. CIT (E) CONSCIOUSLY OBSERVED THAT WHILE CONSIDERING TH E CASE FOR REGISTRATION U/S 12AA OF THE ACT, THE OBJECTS OF TH E TRUST/SOCIETY AND GENUINENESS OF THE ACTIVITIES ARE TO BE EXAMINED. 4.2 FROM THE ORDER IT ALSO REFLECTS THAT THE LD. CIT(E) SOUGHT CERTAIN EXPLANATIONS/DOCUMENTS, WHICH HAVE BEEN SPECIFI CALLY CLARIFIED AND REPLIED BY THE APPLICANT BY FILLING THE RELEVANT INFORMATION AND DOCUMENTS. THEREAFTER, NO OPPORTUNITY WAS PROVIDED TO THE APPLICANT EITHER FOR CORROBORATION/CO NFRONTATION AND/OR FOR ESTABLISHING ITS CASE FOR GRANT OF REGISTRATI ON, HOWEVER ON THE BASIS OF THE REPLY ITSELF, THE REGISTRATION APPL ICATION WAS REJECTED. 4.3 IT IS TRITE TO SAY THAT EVERY PERSON HAS THE RIGHT TO SPEAK AND BE HEARD WHEN ALLEGATIONS ARE BEING PUT TOWARDS H IM OR HER . ITA NO.581 (ASR)/2018 SHRI MATA JI EDUCATIONAL TRUST VS CIT(E) 4 IF NO OPPORTUNITY HAS BEEN GIVEN TO THE PARTY EFFECTE D, THEN IT SHALL AMOUNT TO VIOLATIONS OF THE PRINCIPLES OF NATURAL JUSTICE, WHICH EMBEDDED IN LATIN WORDS AUDI ALTERAMPARTEM W HICH MEANS HEAR THE OTHER SIDE, OR NO MAN SHOULD BE CONDE MNED UN-HEARD OR BOTH THE SIDES MUST BE HEARD BEFORE PASSIN G ANY ORDER. THE PRINCIPLE OF AUDI ALTERAMPARTEM IS THE BA SIC CONCEPT OF THE PRINCIPLE OF NATURAL JUSTICE AND HAS NOT EVOLVED FROM THE CONSTITUTION BUT EVOLVED THROUGH CIVILIZATION AND MAN KIND AND IS THE CONCEPT OF COMMON LAW, WHICH IMPLIES FAIRNESS, REASONABLENESS, EQUALITY AND EQUITY. IN INDIA, THE PRI NCIPLES OF NATURAL JUSTICE ARE THE GROUNDS OF ARTICLE 14 AND 21 O F THE CONSTITUTION. ARTICLE 14 ENSHRINES THAT EVERY PERSON SHOU LD BE TREATED EQUALLY. IN THE LANDMARK CASE OF MANEKA GANDHI VS. THE UNION OF INDIA (1978 AIR 597) , IT HAS BEEN HELD BY CONSTITUTION BENCH OF THE APEX COURT THAT THE LAW AND PROCEDURE MU ST BE OF A FAIR, JUST AND REASONABLE KIND. THE DOCTRINE ENSURES A FAIR HEARING AND FAIR JUSTICE TO BOTH THE PARTIES. UNDER T HIS DOCTRINE, BOTH THE PARTIES HAVE THE RIGHT TO SPEAK. THE AIM OF THIS PRINCIPLE IS TO GIVE AN OPPORTUNITY TO THE PARTIES TO DEFEND TH EMSELVES. BEFORE THE COURT, BOTH THE PARTIES ARE EQUAL AND AR E ENTITLEMENT OF EQUAL OPPORTUNITY TO REPRESENT THEM. I F THE ORDER IS PASSED BY THE AUTHORITY WITHOUT PROVIDING THE REASONABLE OPPORTUNITY OF BEIN G HEARD TO THE PERSON AFFECTED BY IT ADVERSELY WILL BE INVALID AN D SHALL BE LIABLE TO BE SET ASIDE. 4.4 AS PER THE PROVISIONS OF SECTION 12AA OF THE ACT, BEFOR E PASSING THE ORDER FOR REFUSING TO REGISTER THE TRUST OR INSTITUTION, A REASONABLE OPPORTUNITY OF BEING HEARD IS REQUIRED TO BE GIVEN, FOR THE SAKE OF BREVITY AND READY REFERENCE THE PROVI SIONS ARE REPRODUCED HEREIN BELOW: ITA NO.581 (ASR)/2018 SHRI MATA JI EDUCATIONAL TRUST VS CIT(E) 5 SECTION 12AA OF THE INCOME TAX ACT READS AS FOLLOWS: '12AA. PROCEDURE FOR REGISTRATION.--(1) THE COMMISS IONER, ON RECEIPT OF AN APPLICATION FOR REGISTRATION OF A TRU ST OR INSTITUTION MADE UNDER CLAUSE (A) OR CLAUSE (AA) OF SUB-SECTION (1)OF SECTION 12A , SHALL-- (A) CALL FOR SUCH DOCUMENTS OR INFORMATION FROM THE TRUST OR INSTITUTION AS HE THINKS NECESSARY IN ORDER TO SATI SFY HIMSELF ABOUT THE GENUINENESS OF ACTIVITIES OF THE TRUST OR INSTI TUTION AND MAY ALSO MAKE SUCH INQUIRIES AS HE MAY DEEM NECESSARY I N THIS BEHALF; AND (B) AFTER SATISFYING HIMSELF ABOUT THE OBJECTS OF T HE TRUST OR INSTITUTION AND THE GENUINENESS OF ITS ACTIVITIES, HE -- (I) SHALL PASS AN ORDER IN WRITING REGISTERING THE TRUST OR INSTITUTION; (II) SHALL, IF HE IS NOT SO SATISFIED, PASS AN ORDE R IN WRITING REFUSING TO REGISTER THE TRUST OR INSTITUTION, AND A COPY OF SUCH ORDER SHALL BE SENT TO THE APPLICANT: PROVIDED THAT NO ORDER UNDER SUB-CLAUSE (II) SHALL BE PASSED UNLESS THE APPLICANT HAS BEEN GIVEN A REASONABLE OPPORTUNITY OF BEING HEARD. 4.5 COMING TO THE INSTANT CASE, ADMITTEDLY BEFORE DECLININ G THE REGISTRATION U/S 12 OF THE ACT, NO REASONABLE OPPORTUNI TY OF BEING HEARD WAS PROVIDED TO THE APPELLANT, WHICH IS MANDATOR Y, HENCE ON THIS GROUND ITSELF, THE ORDER UNDER CHALLENGE IS LIA BLE TO BE SET ASIDE. 4.6 IN OUR CONSIDERED VIEW, TO MEET THE SUBSTANTIAL JUSTI CE, APPROPRIATE COURSE WOULD BE TO SET ASIDE THE ORDER IMPU GNED AND REMAND BACK THE CASE TO THE FILE OF THE LD. CIT(E) FOR A DECISION AFRESH. CONSEQUENTLY, THE CASE IS REMANDED TO TH E FILE OF THE LD. CIT(E) FOR DECISION AFRESH WITHIN 03 MONTHS OF THE ITA NO.581 (ASR)/2018 SHRI MATA JI EDUCATIONAL TRUST VS CIT(E) 6 RECEIPT OF THIS ORDER, SUFFICE TO SAY DUE OPPORTUNITIES OF BEING HEARD SHOULD BE GIVEN TO THE APPELLANT. AS WE HAVE DE CIDED TO SET ASIDE THE IMPUGNED ORDER AND REMANDED THE CASE TO T HE FILE OF THE LD. CIT (E), HENCE NOT DWELLING INTO THE MERI TS OF THE CASE. THE LD. CIT(E) SHALL BE AT LIBERTY TO RE-CONSIDER ALL ISSUES ALREADY RAISED OR TO BE RAISED FURTHER AND OTHERWISE FEEL, FIT AND APPROPRIATE FOR CONSIDERATION FOR PROPER ADJUDICATIO N OF APPLICATION FOR REGISTRATION U/S 12AA OF THE ACT. 5. IN THE RESULT, THE APPEAL FILED BY THE APPELLANT/AS SESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH DAY OF MAY 2019. SD/- SD/- (SANJAY ARORA) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 30 TH OF MAY, 2019 COPY OF THE ORDER FORWARDED TO: (1) APPELLANT/ASSESSEE (2) THE CIT (EXEMPTION), CHANDIGARH (3) THE SR. DR, I.T.A.T., AMRITSAR