Developing Countries Vaccine Manufactures Network, Hyd, Hyderabad V. CIT(Exemptions), Hyd, Hyderabad

ITA 87/HYD/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6365 (ITAT-HYDERABAD)
• Duration Of Justice: 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 04-05-2016
• Assessment Year: misc
• Appeal Filed On: 25-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R B NAIK
• Assessee Lawyers: E S RANGANATH
• Keywords: Opportunity of being heard
• Section: 12A; 12AA

Judgement Text

ITA NO 87 OF 2016 DEV COUNTRIES VACCINE MANUFACTURE RS NETWORK HYDERABAD PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SMT. P.MADHAVI DEVI, JUDICIAL MEMBER & SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO.87/HYD/2016 (ASSESSMENT YEAR: NA) DEVELOPING COUNTRIES VACCINE MANUFACTURERS NETWORK, HYDERABAD PAN: AAAD4463 D VS. COMMISSIONER OF INCOME TAX (EXEMPTIONS) HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI E.S. RANGANATH FOR REVENUE : SHRI R.B. NAIK, DR DATE OF HEARING : 04.05.2016 DATE OF PRONOUNCEMEN T : 1 .0 8 .2016 O R D E R PER SMT. P. MADHAVI DEVI, J.M. THIS IS ASSESSEES APPEAL AGAINST THE REJECTION OF ASSESSEES APPLICATION FOR REGISTRATION U/S 12AA OF THE I.T. A CT. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A SOCIEY. IT FILED AN APPLICATION IN FORM NO.10A ON 31.03.2015 S EEKING REGISTRATION U/S 12AA OF THE I.T. ACT, 1961. A NOTI CE WAS ISSUED TO THE ASSESSEE VIDE LETTER DATED 23.06.2015 FIXING THE CASE FOR HEARING ON 17.07.2015 REQUESTING THE ASSESSEE TO PR ODUCE ITS ORIGINAL MEMORANDUM OF ASSOCIATION (MOA) FOR VERIFI CATION AND ALSO TO FILE DETAILED REPLY ON SPECIFIC POINTS. THE AUTHORISED REPRESENTATIVE OF THE ASSESSEE APPEARED AND FILED T HE INFORMATION. AFTER GOING THROUGH THE SAID INFORMATI ON, THE CIT (E) HELD THAT THE ASSESSEE HAS NOT FILED ANY EVIDENCE O F CHARITABLE ITA NO 87 OF 2016 DEV COUNTRIES VACCINE MANUFACTURE RS NETWORK HYDERABAD PAGE 2 OF 4 ACTIVITY BEING CARRIED OUT BY THE ASSESSEE THOUGH T HE SOCIETY WAS STARTED IN THE YEAR 2005. HE ALSO OBSERVED THAT THE ASSESSEE IS REQUIRED TO FILE ACCOUNTS OF THE THREE FINANCIAL YE ARS PRIOR TO THE FINANCIAL YEAR IN WHICH THE APPLICATION FOR REGISTR ATION IS MADE AS PER RULE 17(A)(B) OF THE I.T. RULES, 1962. HE OBSER VED THAT THE ASSESSEE HAS FAILED TO FILE THE ACCOUNTS OF THE EAR LIER YEARS AND ALSO DID NOT FILE RETURN OF INCOME FOR THE A.Y 2014 -15. HE ALSO OBSERVED FROM THE OBJECTIVE CLAUSE (1) AND AS PER T HE AMENDED MOA, THAT THE SOCIETY INTENDED TO CARRY ON ACTIVITI ES OUTSIDE INDIA WHICH IS IN VIOLATION OF THE PROVISIONS OF SECTION 11(1) (A) OF THE I.T. ACT. IN VIEW OF THESE, THE CIT (E) REFUSED TO GRANT REGISTRATION U/S 12AA OF THE ACT. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ASSESSEE HAS FILED ALL THE RELEVANT DETAILS BEFORE THE CIT (E). BEFORE US, THE ASSESSEE ALSO FILED AN AFFIDAVIT OF THE CHARTERED ACCOUNTANT WHO HAD APPEARED BEFORE THE ASSESSEE TO AFFIRM THAT ALL THE RELEVANT INFORMATION, DOCUMENTS AND EXPLANA TION INCLUDING THOSE PLACED BEFORE THE TRIBUNAL AND INCL UDING THE FINANCIAL STATEMENTS OF THE SOCIETY FOR THE YEARS 2012-13, 2013- 14 & 2014-15 WERE FILED BEFORE THE CIT (E) DURING T HE PROCEEDINGS U/S 12A OF THE I.T. ACT. BEFORE US THE ASSESSEE HAS ALSO FILED ORIGINAL AS WELL AS AMENDED MOA , RULES & REGULATIONS OF THE SOCIETY, THE LETTER OF THE ASSESSEE SOCIETY DATED 18.09.2015 IN REPLY TO THE LETTER OF THE CIT (E) DATED 26.03.2 015 AND THE FINANCIAL STATEMENTS OF THE ASSESSEE FOR THE YEARS ENDING 31.03.2013, 31.3.2014 AND 31.3.2015. FURTHER, THE L EARNED COUNSEL FOR THE ASSESSEE ALSO SUBMITTED THAT THE CI T (E) HAS NOT GIVEN ANY OPPORTUNITY OF HEARING TO THE ASSESSEE BE FORE REJECTING ITA NO 87 OF 2016 DEV COUNTRIES VACCINE MANUFACTURE RS NETWORK HYDERABAD PAGE 3 OF 4 THE ASSESSEES APPLICATION. THIS IN OUR VIEW IS CLE ARLY IN VIOLATION OF THE PROVISIONS OF THE ACT. SUB SECTION (1) OF S ECTION 12AA OF THE ACT PROVIDES AS UNDER: 12AA. (1) THE [ PRINCIPAL COMMISSIONER OR ] COMMISSIONER, 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 INSTITUTI ON AND MAY ALSO MAKE SUCH INQUIRIES AS HE MAY DEEM NECESSARY IN THIS BEH ALF; 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 APPLI CANT : PROVIDED THAT NO ORDER UNDER SUB-CLAUSE (II) SHALL BE PASSE D UNLESS THE APPLICANT HAS BEEN GIVEN A REASONABLE OPPORTUNITY O F BEING HEARD. [(1A) ALL APPLICATIONS, PENDING BEFORE THE [ PRINCIPAL CHIEF COMMISSIONER OR ] CHIEF COMMISSIONER ON WHICH NO ORDER HAS BEEN PASSED UNDER CLAUSE (B) OF SUB-SECTION (1) BEFORE T HE 1ST DAY OF JUNE, 1999, SHALL STAND TRANSFERRED ON THAT DAY TO THE [ PRINCIPAL COMMISSIONER OR ] COMMISSIONER AND THE [ PRINCIPAL COMMISSIONER OR ] COMMISSIONER MAY PROCEED WITH SUCH APPLICATIONS UN DER THAT SUB-SECTION FROM THE STAGE AT WHICH THEY WERE ON TH AT DAY.] (2) EVERY ORDER GRANTING OR REFUSING REGISTRATION U NDER CLAUSE (B) OF SUB-SECTION (1) SHALL BE PASSED BEFORE THE EXPIRY O F SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE APPLICATION WAS R ECEIVED UNDER CLAUSE (A) [OR CLAUSE (AA) OF SUB-SECTION (1)] OF S ECTION 12A .] [(3) WHERE A TRUST OR AN INSTITUTION HAS BEEN GRAN TED REGISTRATION UNDER CLAUSE (B) OF SUB-SECTION (1) [OR HAS OBTAINE D REGISTRATION AT ANY TIME UNDER SECTION 12A [AS IT STOOD BEFORE ITS AMENDMENT BY THE FINANCE (NO. 2) ACT, 1996 (33 OF 1996)]] AND SUBSEQ UENTLY THE [ PRINCIPAL COMMISSIONER OR ] COMMISSIONER IS SATISFIED THAT THE ACTIVITIES OF SUCH TRUST OR INSTITUTION ARE NOT GEN UINE OR ARE NOT BEING CARRIED OUT IN ACCORDANCE WITH THE OBJECTS OF THE T RUST OR INSTITUTION, AS THE CASE MAY BE, HE SHALL PASS AN ORDER IN WRITI NG CANCELLING THE REGISTRATION OF SUCH TRUST OR INSTITUTION: PROVIDED THAT NO ORDER UNDER THIS SUB-SECTION SHALL BE PASS ED UNLESS SUCH TRUST OR INSTITUTION HAS BEEN GIVEN A REASONAB LE OPPORTUNITY OF BEING HEARD.] ITA NO 87 OF 2016 DEV COUNTRIES VACCINE MANUFACTURE RS NETWORK HYDERABAD PAGE 4 OF 4 4. FROM THE ABOVE IT IS CLEAR THAT IT IS THE PRINCI PAL COMMISSIONER OR COMMISSIONER WHO HAS BEEN GRANTED T HE POWER TO CONSIDER THE MERITS OF AN APPLICATION FOR REGIST RATION U/S 12AA AND THE POWER TO GRANT OR REJECT THE ASSESSEES APP LICATION FOR REGISTRATION CAN BE EXERCISED BY HIM ALONE. IN THE CASE BEFORE US, IT IS NOTICED THAT THOUGH THE ASSESSEE HAS FILED AL L THE RELEVANT DETAILS BEFORE THE CIT (E), NOTHING HAS BEEN TAKEN INTO CONSIDERATION BY HIM. THEREFORE, FOR THE ABOVE REAS ONS, WE DEEM IT FIT AND PROPER TO SET ASIDE THE IMPUGNED ORDER A ND REMIT THE MATTER TO THE FILE OF THE CIT (E) FOR RE-CONSIDERAT ION IN ACCORDANCE WITH THE LAW AFTER GIVING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 5. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 1 ST AUGUST, 2016. S D/ - S D/ - ( S.RIFAUR RAHMAN ) (P. MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 1 ST AUGUST, 2016. VNODAN/SPS COPY TO: 1. NATRAJA IYER & CO. CAS, 1-10-126, ASHOKNAGAR, HYDER ABAD 500020 2. COMMISSIONER OF INCOME TAX (EXEMPTIONS), VTH FLOOR, POSNETT BHAVAN, TILAK ROAD, HYDERABAD 500001 3. INCOME TAX OFFICER (EXEMPTIONS) WARD-1 HYDERABAD 4. THE DR, ITAT, HYDERABAD 5. GUARD FILE BY ORDER