SHRI BAWA BRAHAM DEV JI , JAMMU V. COMMISSIONER OF INCOME TAX (EXEMPTIONS), CHANDIGARH

ITA 729/ASR/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4405 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 14-05-2019
• Assessment Year: misc
• Appeal Filed On: 25-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARWINDER KAUR
• Keywords: Charitable institution; Opportunity of being heard; Principle of natural justice; Set aside; Audi alteram partem
• Section: 12A; 12AA; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. N.S. SAINI, ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER ITA NO.729 (ASR)/2017 ASSESSMENT YEAR: 2017-18 SHRI BAWA BRAHAM DEV JI TRUST VILL: CHAK JADELI P.O. TALOOR, TEHSIL & DISTRICT: SAMBHA, JAMMU (J&K) [PAN/TAN:AANTS8425N] VS. CIT (EXEMPTIONS), C.R. BUILDING, 5 TH FLOOR SECTION 17-E, CHANDIGARH (APPELLANT) (RESPONDENT) APPELLANT BY : SH. VINAMAR GUPTA CA) RESPONDENT BY : SMT. PARWINDER KAUR (CIT, DR) DATE OF HEARING : 14.05.2019 DATE OF PRONOUNCEMENT : 14.05.2019 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 26.09.2017, 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 FOR THE LAST 15 YEARS AND HAD APPLIED FOR REGI STRATION UNDER SECTION 12AA OF THE ACT, ON DATED 31/03/2017 BEF ORE THE LD. CIT(E). THE APPLICATION OF THE APPELLANT WAS TAKE N INTO CONSIDERATION AND VIDE SHOW CAUSE NOTICE DT. 02/08/2017 T HE ITA NO. 729 (ASR)/2017 SHRI BABA BRAHAM DEV JI TRUST VS CIT(E) 2 APPELLANT WAS ASKED TO SUBMIT DETAILS/CLARIFICATION AS M ENTIONED IN PARA 5 OF THE IMPUGNED ORDER, ON OR BEFORE 16/08 /2017. THE SAID SHOW CAUSE NOTICE DATED 02/08/2017 WAS REPLIED BY TH E APPELLANT BY FILING THE REPLY AND DOCUMENTS WHICH HAV E BEEN TAKEN INTO CONSIDERATION BY THE LD. CIT(E) AND ON THE BASIS OF THE REPLY AND DOCUMENTS, THE LD. CIT(E) REJECTED THE A PPLICATION UNDER SECTION 12AA OF THE ACT. 3. THE ASSESSEE ON BEING AGGRIEVED PREFERRED THE INSTANT APPEAL AND RAISED THE FOLLOWING GROUNDS: 1. THAT LEARNED CIT (E) HAS ERRED IN LAW AND FACTS AND CIR CUMSTANCES OF THE CASE BY REJECTING APPLICATION FOR GRANT OF REGISTRA TION TO THE ASSESSE TRUST U/S 12AA. 2. THAT THE LEARNED CIT (E) HAS ERRED IN LAW AND FACTS AND CIRCUMSTANCES OF THE CASE IN SPITE OF THE OBJ ECTS OF THE ASSESSE BEING WHOLLY FOR RELIGIOUS AND CHARITABLE PURPOSE S AND THE ACTIVITIES BEING GENUINE AND IN ACCORDANCE WITH THE OBJECTS OF THE TRUST. 3. THAT THE LEARNED CIT (E) HAS ERRED IN LAW AND FACTS AND CIRCUMSTANCES OF THE CASE BY DENYING REGISTRA TION ON PRESUMPTIONS AND SURMISES WHICH HAVE NO RELEVANCE TO THE R EGISTRATION OF THE TRUST 4. THAT THE LEARNED CIT (E) HAS ERRED IN LAW AND FACTS AND CIRCUMSTANCES OF THE CASE WITHOUT APPRECIATIN G THE PROVISIONS U/S 12AA AND ON THE GROUNDS EVEN BEYOND THE PURVIEW OF SCOPE OF ENQUIRY FOR REGISTRATION OF TRUST ENVISAGED UNDER T HE PROVISIONS OF THE LAW. 5. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AME ND OR VARY THE GROUNDS OF APPEAL HERE IN ABOVE AT OR BEFORE HEARING OF APPEAL. 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. ITA NO. 729 (ASR)/2017 SHRI BABA BRAHAM DEV JI TRUST VS CIT(E) 3 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 NO. 3, THE LD. CIT (E) CONSCIOUSLY OBSERVED THAT WHILE CONSIDERING THE CASE FO R REGISTRATION U/S 12AA OF THE ACT, THE OBJECTS OF THE TR UST/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 . 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 ALTERAM PARTEM WHICH 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 ALTERAM PARTEM IS THE B ASIC 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, ITA NO. 729 (ASR)/2017 SHRI BABA BRAHAM DEV JI TRUST VS CIT(E) 4 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: 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 ITA NO. 729 (ASR)/2017 SHRI BABA BRAHAM DEV JI TRUST VS CIT(E) 5 (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 DECISION AFRESH. CONSEQUENTLY, THE CASE IS REMANDED TO TH E FILE OF THE LD. CIT(E) FOR DECISION AFRESH WITHIN 06 MONTHS OF THE 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. ITA NO. 729 (ASR)/2017 SHRI BABA BRAHAM DEV JI TRUST VS CIT(E) 6 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE/APPELLA NT STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 14 DAY OF MAY 2019. SD/- SD/- (N.S. SAINI) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 14/05/2019 AG,CHD (ON TOUR). COPY OF THE ORDER FORWARDED TO: (1) SHRI BAWA BRAHAM DEV JI TRUST VILL: CHAK JADELI P.O. TALOOR, TEHSIL & DISTRICT: SAMBHA, JAMMU (J &K) (2) THE CIT (EXEMPTION), CHANDIGARH (3) THE SR. DR, I.T.A.T., AMRITSAR