M/S SHRI NARAYANWELFARE SOCIETY REGD., FAZILKA V. COMMISSIONER OF INCOME TAX, (EXAMPTION), CHANDIGARH

ITA 606/ASR/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3338 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 6 month(s) 29 day(s)
• Appeal Type: Income Tax (International Taxation) Appeal
• Pronouncement Date: 20-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 13-06-2018
• Assessment Year: 2017-2018
• Appeal Filed On: 21-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARWIND ER KAUR LD
• Assessee Lawyers: SUDHIR SEH GAL LD
• Keywords: Principle of natural justice; Reasonable cause
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRI BUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER ITA NO.606(ASR)/2017 ASSESSMENT YEAR:2017-18 M/S SHRI NARAYAN WELFARE SOCIETY REGD., C/O PRADUMAN SHARMA, SHARMA OPTICALS, COURT ROAD, OPP. CANARA BANK, FIZILKA, 152123 (PUNJAB) PAN:AAFAS5402A VS. THE CIT, (EXEMPTION) CHANDIGARH (APPELLANT) (RESPONDENT) APPELLANT BY: SH SUDHIR SEHGAL (LD. CA) RESPONDENT BY: SMT. PARWINDER KAUR (LD. DR) DATE OF HEARING: 13.06.2018 DATE OF PRONOUNCEMENT: 21 .06.2018 ORDER PER N.K.CHOUDHRY, JM: THE INSTANT APPEAL HAS BEEN PREFERRED BY THE ASSESSEE/APPELLANT, ON FEELING AGGRIEVED AGAINST THE ORD ER DATED 22.08.2017, IMPUGNED HEREIN, PASSED BY THE LD. CIT, (EXEMPTIONS), CHANDIGARH, U/S 12AA(1)(B)(II) OF THE I.T. ACT, 1961 (HEREINAFTER CALLED AS THE ACT). 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: ITA NO.606/ASR/2017 (A.Y:2017-18) M/S SHRI NARAYAN WELFARE SOCIETY REGD. VS. CIT(E) 2 1. THAT THE WORTHY CIT (EXEMPTIONS), CHANDIGARH HAS ERRED IN NOT GRANTING REGISTRATION U/S.12AA(1)(B)(II) OF THE INCOM E TAX ACT,1961 TO THE ASSESSEE SOCIETY. 2. THAT THE REJECTION OF APPLICATION U/S 12AA(1)(B)( II) IS AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THAT NO SUFFICIENT OR REASONABLE OPPORTUNITY HAV E BEEN AFFORDED TO THE ASSESSEE SOCIETY TO SUBMIT THE DOCUMENTS AS DES IRED BY THE CIT (EXEMPTIONS) AND, THUS, THERE WAS REASONABLE CAUSE FOR NOT SUBMITTING THE DOCUMENTS AS DESIRED BY THE WORTHY CIT ( EXEMPTIONS ), CHANDIGARH. 4. THAT THE ASSESSEE HAD FILED THE APPLICATION FOR REGISTRATION ON 23 RD OF FEBRUARY 2017 AND THE FIRST AND THE ONLY QUERY A SKING FOR DETAIL AND CLARIFICATION WAS MADE ON 4 TH OF AUGUST 2017 AND THE ORDER WAS PASSED BY THE WORTHY CIT (EXEMPTIONS) ON 22 ND OF AUGUST 2017 (WRONGLY TYPED AS 22.08.2018) AND, THUS, NO REASONABLE/SUFFICIENT OPP ORTUNITY HAVE BEEN AFFORDED. 5. THAT THE SOCIETY IS A GENUINE SOCIETY, ENGAGED I N THE CHARITABLE ACTIVITIES AND IS REGISTERED WITH REGISTRAR OF SOCIE TIES AT FEROZEPUR AND HENCE REJECTION OF APPLICATION BY THE CIT (EXEMPTIO NS) IS NOT PROPER. 3 THE BRIEF FACTS OF THE CASE ARE THAT AN APPLICATION FOR REGISTRATION U/S 12AA WAS FILED ONLINE BY THE ASSESSEE SOCIE TY ON DATED 23 RD FEB. 2017. FOR CONSIDERATION OF THE APPLICATION, AN OPPORTUNITY OF PERSONAL HEARING WAS AFFORDED TO THE A SSESSEE SOCIETY, FIXING THE DATE OF HEARING ON 19.07.2017 AND THE ASSESSEE WAS FURTHER REQUESTED TO FILE ON 04.08.2017, THE DETAILS/CLARIFICATION AS MENTIONED IN PARA NO.5 OF THE ORDER. ON 04.08.2017 NO ONE ATTENDED ON BEHALF OF THE ASSESSEE SO CIETY, HOWEVER, ONE UNDATED LETTER SIGNED BY C.A MR. NANVI GUPTA WAS RECEIVED BY THE LD. CIT(E) FOR ADJOURNMENT AND, ACCORD INGLY, THE CASE WAS ADJOURNED FOR 10 TH AUGUST, 2017. HOWEVER, ON 10 TH AUGUST, 2017 AS WELL C.A. SH. NANVI GUPTA THE COUNSEL OF THE ASSESSEE SOCIETY ATTENDED AND REQUESTED FOR ANOTHER ADJOURNMENT WHICH WAS ALSO GRANTED BY FIXING THE CASE OF ITA NO.606/ASR/2017 (A.Y:2017-18) M/S SHRI NARAYAN WELFARE SOCIETY REGD. VS. CIT(E) 3 HEARING ON NEXT DATE I.E., 11 TH AUGUST, 2017. ON 11.08.2017 NEITHER ANY ONE ATTENDED NOR ANY WRITTEN REPLY FILE D ON BEHALF OF THE ASSESSEE, THEREFORE, THE LD. CIT(E) WAS CONSTRAINED TO PASS THE IMPUGNED ORDER DATED 22.02.2018 BY DECLINING THE REGISTRATION U/S 12AA OF THE ACT TO THE ASSESSEE SOCIETY. THE LD. COUNSEL HAVE TAKEN US TO THE ORDER IMPUGNED HEREIN AS WELL DISSOLUTION CLAUSE INCORPORATED AND IN SUPPORT OF ITS CASE SUBMITTED THAT NO REASONABLE AND PROPER OPPORTUNITIES WERE PROVIDED TO THE ASSESSEE SOCIETY FOR REPRESENTING AND ESTABLISHING ITS CASE, HENCE, THERE IS A DENIAL OF NATU RAL JUSTICE AND THEREFORE PRAYED FOR SETTING ASIDE OF THE ORDER. 4. ON THE OTHER HAND, THE LD. DR RELIED UPON THE ORDER PASSED BY THE LD. CIT(E). 5. WE HAVE GONE THROUGH THE IMPUGNED ORDER AND REALIZE D THAT IN THE INSTANT CASE, AN APPLICATION FOR REGISTRATIO N WAS FILED ON 23 RD FEB. 2017 BUT THE SAME WAS TAKEN INTO CONSIDERATION WHILE AFFORDING AN OPPORTUNITY OF PERSONAL HEARING ON 19 TH JULY, 2017, WHICH WAS MUCH LATER I.E. ALMOST FIVE MONTHS AFTE R FILING OF APPLICATION AND THEREAFTER, THE ASSESSEE SOCIETY WAS REQUEST ED TO FILE THE DETAILS/CLARIFICATION AS ENUMERATED IN PAR A NO.5 OF THE ORDER ON OR BEFORE 04-08-2017. ON 04-08-2017, A REQ UEST FOR ADJOURNMENT WAS MADE, WHICH WAS ALLOWED ONLY FOR A SH ORT PERIOD I.E. UPTO 10 TH AUGUST, 2017. AGAIN ON 10 TH AUGUST, 2017 AN ADJOURNMENT WAS SOUGHT BY THE COUNSEL OF THE ASSESSEE SOCIETY WHICH WAS ALSO ALLOWED BUT ONLY UP TO THE NEXT DAY . ITA NO.606/ASR/2017 (A.Y:2017-18) M/S SHRI NARAYAN WELFARE SOCIETY REGD. VS. CIT(E) 4 FROM THE ORDER, IT CLEARLY REFLECTS THAT ALTHOUGH THE APPLICATION FOR REGISTRATION U/S 12AA OF THE ACT WAS TAKEN UP FOR CONSIDERATION AFTER 05 MONTHS OF ITS FILING, HOWEVER, T HEREAFTER, WITHIN SEVEN DAYS ITSELF I.E., FROM 4 TH AUGUST, 2017 TO 11 TH AUGUST, 2017 THE PROCEEDINGS CONCLUDED AND FINALLY THE ORDER WAS PASSED ON 20 TH AUGUST, 2018 WHICH IN OUR CONSIDERED OPINION SUBSTANTIATE THE CONTENTION OF THE ASSESSEE SOCIETY TO THE EFFECT THAT REASONABLE AND PROPER OPPORTUNITY WAS NOT ACCORDED TO THE ASSESSEE FOR ESTABLISHING ITS CASE, WHICH IN O UR CONSIDERED VIEW NOT ONLY AMOUNTS TO DENIAL OF JUSTICE BU T ALSO AMOUNTS TO CONTRAVENTION TO THE PRINCIPLE OF NATURAL JUSTICE. WE REALIZED FROM THE ORDER THAT THE LD. CIT(E) ALT HOUGH CONSIDERED THE APPLICATION OF THE ASSESSEE IN THE ABSENCE OF THE ASSESSEE SOCIETY, HOWEVER, DECLINED TO GRANT THE REGISTRATI ON ON THE GROUNDS INTER-ALIA THAT THERE IS NO DISSOLUTION CL AUSE IN THE MOA AND SECONDLY NO EVIDENCE HAS BEEN ADDUCED IN FAVOUR OF THE ENTITY EXISTING FOR BENEFIT OF THE GENERAL PUBL IC EXCEPT SEEKING ADJOURNMENTS TIME AND AGAIN. THIRDLY THE APPL ICANT DID NOT SUBMIT THE REPLY TO THE QUERY RAISED TILL THE DA TE OF PASSING THE ORDER DESPITE SUFFICIENT OPPORTUNITIES HAVING BEEN PROVIDED. DURING THE COURSE OF HEARING, OUR ATTENTION WAS DRAWN TO THE IN-CORPORATION OF DISSOLUTION CLAUSE, THEREFORE, TH E ONE REASON WITH REGARD TO THE DISSOLUTION CLAUSE STANDS MET. ITA NO.606/ASR/2017 (A.Y:2017-18) M/S SHRI NARAYAN WELFARE SOCIETY REGD. VS. CIT(E) 5 WITH REGARD TO THE SECOND OBJECTION THAT NO EVIDENCE HA S BEEN ADDUCED IN FAVOUR OF THE ENTITY EXISTING OF THE BENEFIT OF GENERAL PRINCIPAL AS WELL AS NON-SUBMISSIONS OF REPLY TO T HE QUERY RAISED, WE ARE OF THE CONSIDERED OPINION THAT BE CAUSE THE ASSESSEE DID NOT GET THE PROPER OPPORTUNITIES, THEREFORE , IT WAS PREVENTED FROM ESTABLISHING ITS CASE IN A PROPER AND BO NAFIDE MANNER. ON THE AFORESAID CONSIDERATION, WE ARE OF THE CONSIDERE D OPINION THAT JUSTICE WOULD BE MET IF THE CASE BE REMAN DED TO THE FILE OF THE LD. CIT(E) FOR DECIDING AFRESH WITH OBSERV ATION THAT THE LD. CIT(E) SHALL PASS AN ORDER AFRESH ON THE APPLICA TION OF THE ASSESSEE AFTER GIVING PROPER AND REASONABLE OPPORTUN ITIES OF BEING HEARD TO THE ASSESSEE SOCIETY WITHIN SIX MONTHS WITHO UT BEING INFLUENCED BY ANY OBSERVATION IN THIS ORDER AND/ OR IMPUGNED ORDER DATED 22.08.2017, HENCE ORDERED. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE SOCIETY I S ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 21.06.2018. SD/- SD/- (SANJAY ARORA) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JUDIC IAL MEMBER DATED: 21.06.2018 /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) M/S SHRI NARAYAN WELFARE SOCIETY REGD., FAZI LKA (2) THE CIT(EXEMPTIONS), CHANDIGARH (3) THE SR DR, I.T.A.T., AMRITSAR TRUE COPY BY ORDER