Jan Mangal Pharmacy Foundation, Valsad V. CIT, (Exemption), Ahmedabad

ITA 679/AHD/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3398 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-03-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 02-03-2020
• Assessment Year: misc
• Appeal Filed On: 19-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MEHUL K PATEL
• Keywords: Principle of natural justice; Set aside; Audi alteram partem
• Section: 12A; 12AA

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ I.T.A. NOS.679 & 680/AHD/2018 ( / ASSESSMENT YEARS : - ) JAN MANGAL PHARMACY FOUNDATION C/O.SHRI GHANSHYAM R.PAREKH 203, AAKAR COMPLEX-1 ABOVE MONIKA ICE-CREAM TIOTHAL ROAD, VALSAD-01 / VS. THE COMMISSIONER OF INCOME TAX (EXEMPTION) AHMEDABAD-380 009 ./ ./ PAN/GIR NO. : AADCJ 9244 P ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI MEHUL K. PATEL, AR / RESPONDENT BY : SHRI SAMIR TEKRIWAL, CIT-DR / DATE OF HEARING 02/03/2020 !'# / DATE OF PRONOUNCEMENT 02/03/2020 / O R D E R PER SHRI SANDEEP GOSAIN, JUDICIAL MEMBER : THE ASSESSEE IS IN APPEALS BEFORE US AGAINST THE SE PARATE ORDERS OF LD.COMMISSIONER OF INCOME TAX(EXEMPTIONS), AHMEDABA D [CIT(E) IN SHORT] IDENTICALLY DATED 31/01/2018. ITA NOS.679 & 680 /AHD/2018 JAN MANGAL PHARMACY FOUNDATION VS. CIT(E) - 2 - 2. THE ASSESSEE IN ITA NO.679/AHD/2018 RAISED THE F OLLOWING GROUNDS OF APPEAL: (1) THAT ON FACTS, AND IN LAW, THE LEARNED CIT(EXEMPTIO NS) AHMEDABAD HAS GRIEVOUSLY ERRED IN NOT GRANTING SUFFICIENT AND REA SONABLE OPPORTUNITY TO THE APPELLANT. (2) THAT ON FACTS, AND IN LAW, THE LEARNED CIT(EXEMPTIO NS) AHMEDABAD HAS GRIEVOUSLY ERRED IN REJECTING THE APPLICATION FOR R EGISTRATION U/S.12AA OF THE ACT. (3) THAT ON FACTS, AND IN LAW, THE REGISTRATION OUGHT T O HAVE BEEN GRANTED U/S.12AA OF THE ACT AS PRAYED FOR. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, I N THE PRESENT CASE, HAD APPLIED FOR REGISTRATION OF TRUST U/S.12AA OF T HE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) BEFORE THE LD.CIT(E), AHMEDABAD, HOWEVER THE SAID APPLICATION FOR REGISTR ATION U/S.12AA OF THE ACT WAS REJECTED BY THE CIT(E), AHMEDABAD BY HO LDING THAT ASSESSEE FAILED TO FILE DOCUMENTARY EVIDENCES TO ENABLE HIM TO BRING SATISFACTION ABOUT THE GENUINENESS OF THE ASSESSEE-TRUST ACTIVIT IES. 4. THE LD.AR SUBMITTED BEFORE US THAT ASSESSEE HAD ALREADY SUBMITTED ALL THE REQUIRED DOCUMENTS WHICH WERE NOT CONSIDERED BY LD.CIT(E). IT WAS ALSO SUBMITTED THAT LD.CIT(E) HA D SOUGHT DETAILS OF ACTIVITIES ACTUALLY CARRIED OUT BY THE ASSESSEE-TRU ST AND IN THE ABSENCE OF PROVISIONAL ACCOUNT, IT WAS HELD THAT NATURE OF ACT IVITIES OF THE ASSESSEE WERE NOT CLEAR. HOWEVER, IN THIS RESPECT, LD.AR RE LIED UPON THE DECISION ITA NOS.679 & 680 /AHD/2018 JAN MANGAL PHARMACY FOUNDATION VS. CIT(E) - 3 - OF HONBLE GUJARAT HIGH COURT IN THE CASE OF DIRECT OR OF INCOME-TAX VS. PANNA LALBHAI FOUNDATION REPORTED AT (2013) 35 TAXM ANN.COM 104 (GUJARAT) WHEREIN IT WAS HELD AS UNDER: SECTION 12AA OF THE INCOME-TAX ACT, 1961 CHARITA BLE OR RELIGIOUS TRUST PROCEDURE FOR REGISTRATION [DENIAL OF REGIS TRATION] WHETHER WHERE THERE WAS NO MATERIAL TO CONCLUDE THAT OBJECT S OF TRUST OR ACTIVITIES OF TRUST WERE NOT GENUINE OR ANY DOUBT A ROSE IN RESPECT OF GENUINENESS OF ACTIVITIES, REGISTRATION UNDER SECTI ON 12AA COULD NOT BE DENIED HELD, YES WHETHER ONLY BECAUSE TRUST HAS NOT COMMENCED ACTIVITIES, COMMISSIONER WOULD HAVE NO AUTHORITY TO IPSO FACTO REJECT APPLICATION MADE UNDER SECTION 12A FOR REGISTRATION UNDER SECTION 12AA HELD, YES [PARAS 5 & 6] [IN FAVOUR OF ASSESSEE]. AND SUBMITTED THAT, THE CIT(E) COULD NOT INDICATE ANY MATERIAL TO CONCLUDE THAT THE OBJECTS OF THE TRUST OR THE ACTIV ITIES OF THE TRUST WERE NOT GENUINE. IT WAS ALSO SUBMITTED THAT SINCE THE TR UST HAS NOT COMMENCED ITS ACTIVITIES, THE COMMISSIONER HAD NO AUTHORITY TO IPSO FACTO REJECT APPLICATION FOR REGISTRATION. 5. AFTER HEARING BOTH THE PARTIES AT LENGTH, WE FOU ND THAT ASSESSEE COULD NOT APPEAR BEFORE LD.CIT(E) WHEN THE CASE WAS CALLED FOR AND IN THE ABSENCE OF THE ASSESSEE, THE LD.CIT(E) WHILE RE LYING UPON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CI T VS. DAWOODI BOHARA JAMAT (CIVIL APPEAL NO.2492 OF 2014) HAD DEC IDED THE APPLICATION FOR REGISTRATION OF TRUST U/S.12AA OF T HE ACT FILED BY THE ASSESSEE. ITA NOS.679 & 680 /AHD/2018 JAN MANGAL PHARMACY FOUNDATION VS. CIT(E) - 4 - 6. BE THAT AS IT MAY, AFTER CONSIDERING THE RIVAL S UBMISSIONS, WE ARE OF THE VIEW THAT MATTER REQUIRES RECONSIDERATION AT TH E LEVEL OF LD.CIT(E). SINCE ACCORDING TO ASSESSEE, THE ASSESSEE HAD ALREA DY SUBMITTED THE REQUIRED DOCUMENTS BEFORE LD.CIT(E), BUT THE SAME D O NOT FIND MENTION IN THE ORDER. THEREFORE, IT CAN BE INFERRED THAT THOSE DOCUMENTS FILED BY THE ASSESSEE WERE NOT CONSIDERED. THE PRINCIPLE OF AUDI ALTERAM PARTEM IS THE BASIC CONCEPT OF NATURAL JUSTICE. THE EXPRES SION AUDI ALTERAM PARTEM IMPLIES THAT A PERSON MUST BE GIVEN AN OPPORTUNIT Y TO DEFEND HIMSELF. THIS PRINCIPLE IS SINE QUA NON OF EVERY CIVILIZED SOCIETY. THE RIGHT TO NOTICE, RIGHT TO PRESENT CASE AND EVIDENCE , RIGHT TO REBUT ADVERSE EVIDENCE, RIGHT TO CROSS EXAMINATION, RIGHT TO LEGA L REPRESENTATION, DISCLOSURE OF EVIDENCE TO PARTY, REPORT OF ENQUIRY TO BE SHOWN TO THE OTHER PARTY AND REASONED DECISIONS OR SPEAKING ORDERS. WE TOOK THIS GUIDANCE FOR RIGHT OF HEARING, FROM THE RATIO AS IS LAID DOW N BY THE HON'BLE SUPREME COURT IN THE CASE OF MANEKA GANDHI V. UNION OF INDIA, WHEREIN HON'BLE SUPREME COURT HAS LAID DOWN THAT RULE OF FA IR HEARING IS NECESSARY BEFORE PASSING ANY ORDER. WE FIND THAT IT IS PRE-DECISION HEARING STANDARD OF NORM OF RULE OF AUDI ALTERAM PARTEM. WE ARE, THEREFORE, OF THE VIEW THAT MATTER REQUIRES RECONSI DERATION AT THE LEVEL OF LD.CIT(E). THUS, WHILE SETTING ASIDE THE ORDER OF LD.CIT(E), WE RESTORE IT BACK TO LD.CIT(E) AND DIRECT THAT ALL THE DOCUME NTS FILED BY THE ASSESSEE BE CONSIDERED AND ASSESSEE BE GIVEN ONE MO RE OPPORTUNITY OF ITA NOS.679 & 680 /AHD/2018 JAN MANGAL PHARMACY FOUNDATION VS. CIT(E) - 5 - BEING HEARD AND TO FILE ANY OTHER DOCUMENTS BEFORE THE LD.CIT(E), AHMEDABAD AS CALLED FOR AND THE LD.CIT(E) IS ALSO D IRECTED TO DECIDE THE APPLICATION FOR REGISTRATION FILED BY THE ASSESSEE, KEEPING IN VIEW THE PRINCIPLES LAID DOWN IN THE AFORESAID JUDGEMENTS WH ILE PASSING A FRESH ORDER, IF THE ASSESSEE WANTS TO SUBMIT ANY DOCUMENT , HE IS AT LIBERTY TO SUBMIT BEFORE THE LD.CIT(E). ACCORDINGLY, THE APPE AL OF THE ASSESSEE IS SET ASIDE TO THE FILE OF LD.CIT(E) FOR STATISTICAL PURPOSES. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO. 679/AHD/2018 IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO.680/AHD/2018 8. THE ASSESSEE IN ITA NO.680/AHD/2018 RAISED T HE FOLLOWING GROUNDS OF APPEAL: (1) THAT ON FACTS, AND IN LAW, THE ENTIRE ORDER PASSED BY LEARNED CIT(EXEMPTIONS) IS BAD IN LAW, INVALID AND VOID AB INITIO AS IT IS UNSIGNED. (2) THAT ON FACTS, AND IN LAW, THE LEARNED CIT(EXEMPTI ONS) AHMEDABAD HAS GRIEVOUSLY ERRED IN NOT GRANTING SUFFICIENT AND REASONABLE OPPORTUNITY TO THE APPELLANT. (3) THAT ON FACTS, AND IN LAW, THE LEARNED CIT(EXEMPTIO NS) AHMEDABAD HAS GRIEVOUSLY ERRED IN REJECTING THE APPLICATION F OR APPROVAL U/S.80G(5) OF THE ACT. (4) THAT ON FACTS, AND IN LAW, THE APPROVAL GRANTED U/S .80G(5) OF THE ACT OUGHT TO HAVE BEEN CONTINUED AS PRAYED FOR. ITA NOS.679 & 680 /AHD/2018 JAN MANGAL PHARMACY FOUNDATION VS. CIT(E) - 6 - 9. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE HAD AP PLIED FOR REGISTRATION OF TRUST U/S.80G(5) OF THE INCOME TAX ACT, 1961 BEF ORE THE LD.CIT(E), AHMEDABAD, HOWEVER, THE SAID APPLICATION FOR REGIST RATION U/S.80G(5) OF THE ACT WAS REJECTED BY THE CIT(E), AHMEDABAD BY HO LDING THAT ASSESSEE FAILED TO FILE DOCUMENTARY EVIDENCES TO ENABLE HIM TO BRING SATISFACTION ABOUT THE GENUINENESS OF THE ASSESSEE-RUST ACTIVITI ES. 10. BOTH THE SIDES CONSENTED THAT IDENTICAL ISSUE I S INVOLVED IN THIS APPEAL AS WELL. THUS, FOR PARITY OF REASONS NOTED A BOVE, OUR VIEW IN ITA NO.679/AHD/2018(SUPRA) SHALL APPLY MUTATIS MUTANDIS TO THIS APPEAL CAPTIONED ABOVE. AS A RESULT, THE APPEAL OF THE A SSESSEE IN ITA NO.680/AHD/2018 IS ALSO ALLOWED FOR STATISTICAL PUR POSES. 11. IN THE COMBINED RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 02 -03 -2020 AT AHMEDABAD SD/- SD/- ( AMARJIT SINGH) ( SANDEEP GOSAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 02/ 03 /2020 &.., .(../ T.C. NAIR, SR. PS ITA NOS.679 & 680 /AHD/2018 JAN MANGAL PHARMACY FOUNDATION VS. CIT(E) - 7 - !'#$#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. )*+ , / CONCERNED CIT 4. , ( ) / THE CIT(E), AHMEDABAD 5. /01 ((*+ , *+# , ) / DR, ITAT, AHMEDABAD 6. 145 6 / GUARD FILE. / BY ORDER, / ( //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 2.3.20 (DICTATION-PAD 9-P AGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER ..2.3.20 3. OTHER MEMBER... 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.03.03.20 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 03.03.20 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER