Univentis Foundation, Panchkula V. The CIT (Exemptions), Chandigarh

ITA 70/CHANDI/2023

AI Insights

Univentis Foundation appealed against the orders of the CIT (Exemptions), Chandigarh, which had rejected their applications for registration under sections 12AB and 80G of the Income Tax Act, 1961, respectively. The Tribunal found that the CIT (Exemptions) had dismissed the appeals without considering the merits and material on record, solely based on non-prosecution and non-compliance by the assessee. The Tribunal emphasized the need for a decision on merits and adherence to the principles of natural justice, leading to the remittance of the case back to the CIT (Exemptions) for a fresh evaluation.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 127802 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-05-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 30-04-2023
• Assessment Year: 2022-2023
• Appeal Filed On: 14-02-2023
• Other Referred Cases: S. Velu Palandar Vs. DCIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice
• Section: 80G; 12A; 12AA

Judgement Text

आयकर अपील य अ धकरण,च डीगढ़ यायपीठ, च डीगढ़ I N T H E I N C O M E T A X A P P E L L A T E T R I B U N A L C H A N D I G A R H B E N C H , ‘ B ’ , C H A N D I G A R H BEFORE SHRI A.D. JAIN, VICE PRESIDENT & SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER आयकर अपील सं./ ITA Nos. 69 & 70/Chd/2022 नधा रण वष / Assessment Year : 2022-23 Univentis Foundation #227, Sector 6, Sector 8 S.O., Panchkula Vs. बनाम The DCIT (Exemptions), Chandigarh थायी लेखा सं./PAN NO: AABTU1343B अपीलाथ /Appellant यथ /Respondent नधा रती क ओर से/Assessee by : Sh. Tej Mohan Singh, Advocate राज व क ओर से/ Revenue by : Sh. Sarabjeet Singh, CIT DR स ु नवाई क तार$ख/Date of Hearing : 01.05.2023 उदघोषणा क तार$ख/Date of Pronouncement : 02. 05.2023 आदेश/Order Per A.D. Jain, Vice President: These are Assessee’s appeals against the respective orders each dated 30.01.2023 and 23.01.2023 of the ld. CIT (Exemptions), Chandigarh for A.Y. 2022-23. 2. Since the issues involved in both the appeals are identical, they have been heard together and are being disposed of by this common order. The Assessee in ITA No. 70/Chd/2023 has taken following grounds of appeal: ITA No.70/Chd/2023 1. That the Ld. Commissioner of Income Tax (Exemptions) has erred in law in passing an ex-parte order rejecting the registration sought under section 12AB which is 69 & 70-Chd-2023 – Univentis Foundation, Panchkula 2 against the Principals of Natural Justice and as such the order passed is arbitrary and unjustified. 2. That the Ld. Commissioner of Income Tax (Exemptions) has erred in rejecting the registration ex-parte only on the basis of alleged non-compliance on part of the assessee when in fact no email/notice was received by the assessee to check the portal and as such the order passed is arbitrary and unjustified. 3. Without prejudice to the above, the Ld. Commissioner of Income Tax (Exemptions) has erred in law as well as on facts in rejecting registration under section 12AB of the Act which is arbitrary & unjustified. 4. That the registration has been refused only on the basis of suspicion, conjectures and surmises stating that the applicant is not interested in pursuing the matter which is factually incorrect and as such the order refusing registration is illegal, arbitrary and unjustified. 5. That the order of the Ld. Commissioner of Income Tax is erroneous, arbitrary, opposed to law and facts of the case and is, thus, untenable. 3. Briefly, the facts of the case are that the Assessee filed an application for registration u/s 12A (1)(ac)(iii) of the Income Tax Act, 1961 (hereinafter called 'the Act') on 30.09.2022. In order to examine and verify the objects of the Assessee Trust and the genuineness of its activities, a detailed questionnaire was issued electronically to the Assessee on 10.11.2022 requiring the Assessee to furnish the details and documents on-line through e-proceedings on e-filing portal, by 25.11.2022. However, the Assessee neither furnished any submissions nor requested for adjournment in this behalf. Later on, 69 & 70-Chd-2023 – Univentis Foundation, Panchkula 3 opportunities were also granted on the Assessee through letter issued on 13.12.2022 for furnishing reply by the date fixed, i.e., 21.12.2022 and thereafter, a final opportunity was afforded to the Assessee vide letter dated 28.12.2022, fixing the matter on 04.01.2023. However, no compliance in any form was made by the Assessee on the aforesaid occasions. The ld. CIT (E) observed that in the absence of any submissions made by the Assessee, it is very difficult to verify both the nature of objects and the genuineness of the activities of the applicant and concluded that the queries raised had not been answered satisfactorily by the Assessee. The ld. CIT(E), by placing reliance on various case laws, has rejected the application of the Assessee for registration u/s 12AB of the Act, observing that this rejection and consequent lack of registration will apply for the F.Y. 2022-23 onwards and will also supersede any registration granted u/s 12AB or 12AA of the Act by any authority at any earlier time. 4. At the outset, it has been submitted by the ld. Counsel for the Assessee that the ld. CIT(E) has dismissed the appeal of the Assessee without going into the merits of the case and even without considering the material available on record. It has further been submitted that the order passed by the ld. CIT(E) is a non-speaking order. It is prayed that keeping in view the principles of natural justice, the Assessee may be given a reasonable opportunity of hearing of the 69 & 70-Chd-2023 – Univentis Foundation, Panchkula 4 appeal before the ld. CIT(E) and the appeal may be directed to be decided on merits. The ld. Counsel for the Assessee, in this behalf, has also placed on record an Affidavit dated 26.4.2023. 5. The ld. DR, on the other hand, has placed reliance on the order of the ld. CIT(E). 6. Heard. We have gone through the order of the ld. CIT(E), wherein, the appeal of the Assessee has been dismissed merely on the basis of the non-prosecution by relying on various decisions. We find that the ld. CIT (E), Chandigarh has dismissed the appeal without considering the material available on record, as also without going into the merits of the case. As such, an opportunity of hearing requires to be given to the assessee to represent his case fully before the ld. CIT(E). Even otherwise, it is trite [‘S. Velu Palandar Vs. DCIT’ 83 ITR 683 (Mad.)] and incumbent on the authority to decide an appeal on merit. 7. In view of the above, finding force in the grievance raised by the Assessee, the matter is remitted to the file of the ld. CIT (E), to be decided afresh on merit, in accordance with law, on affording due and adequate opportunity of hearing to the assessee. The assessee, no doubt, shall cooperate in the fresh proceedings before the ld. CIT (E). All pleas available under the law shall remain so available to the assessee. Ordered accordingly. 69 & 70-Chd-2023 – Univentis Foundation, Panchkula 5 ITA No. 69/Chd/2022 8. The Assessee in this appeal has taken following grounds of appeal: 1. That the Ld. Commissioner of Income Tax (Exemptions) has erred in law in passing an ex-parte order rejecting the approval sought under section 80G which is against the Principals of Natural Justice and as such the order passed is illegal, arbitrary and unjustified. 2. Without prejudice to the above, the Ld. Commissioner of Income Tax has erred in law as well as on facts in rejecting the approval sought under section 80G of the Act only on the basis that the application u/s 12AB stands rejected on the basis of non-compliance which is arbitrary & unjustified. 3. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off. 4. That the order of the Ld. Commissioner of Income Tax is erroneous, arbitrary, opposed to law and facts of the case and is, thus, untenable. 9. The Assessee filed an application for approval u/s 80G(5), through an application under Form 10AB. The ld. CIT(E), however, declined the registration vide order dated 21.01.2023 in the absence of any registration u/s 12AB or 10(23) / 10(23C), by observing that it did not meet the requirement for approval as mandated by section 80G(5) of the Income-tax Act, 1961 and Rule 11AA of the I.T. Rules, 1961. As in the case of rejection of Assessee’s application for 69 & 70-Chd-2023 – Univentis Foundation, Panchkula 6 registration, here also, the ld. CIT(E) rejected the application ex-parte qua the Assessee without going into merits of the case. 10. Our findings recorded while disposing of ITA No. 70/Chd/2023 are mutatis-mutandis, squarely applicable to the present appeal also and this appeal is also disposed in the same terms. 11. In the result, for statistical purposes, both the appeals are treated as allowed. Order pronounced on 02.05.2023. Sd/- Sd/- (VIKRAM SINGH YADAV) ( A.D. JAIN ) Accountant Member Vice President Dated : 02.05.2023 “आर.के.” आदेश क त*ल+प अ,े+षत / Copy of the order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent 3. आयकर आय ु 1त/ CIT 4. +वभागीय त न5ध, आयकर अपील$य आ5धकरण, च7डीगढ़/ DR, ITAT, CHANDIGARH 5. गाड फाईल/ Guard File आदेशान ु सार/ By order, सहायक पंजीकार/ Assistant Registrar