Shri Trimbakeshwar Devsthan Trust, Nashik V. Commissioner of Income Tax (Exemption), Pune, Pune

ITA 888/PUN/2022

• Counselvise Citation: [2023] 100 COUNSELVISE.COM (IT) 5869 (ITAT-PUNE)
• Duration Of Justice: 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-11-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 22-08-2023
• Assessment Year: misc
• Appeal Filed On: 08-12-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SARDAR SINGH MEENA LD.
• Assessee Lawyers: PRAMOD SHINGTE LD.
• Keywords: Principle of natural justice
• Section: 80G; 12A

Judgement Text

॥ आयकर अपीलीय न्यायाधिकरण, पुणे ‘बी’ न्यायपीठ, पुणे में ॥ ITAT-Pune Page 1 of 5 IN THE INCOME TAX APPELLATE TRIBUNAL, PUNE ‘B’ BENCH, PUNE BEFORE HON’BLE SHRI S. S. VISWANETHRA RAVI, JUDICIAL MEMBER AND SHRI G. D. PADMAHSHALI, ACCOUNTANT MEMBER आयकर अपील स ं . / ITA No. 888/PUN/2022 Sri Trimbakeshwar Devsthan Trust, At Post Trimbakeshwar Pesha Trimbakeshwar Devsthan Trust Office, Nashik – 422 212 PAN: AACTS1456Q . . . . . . . अपीलार्थी / Appellant बनाम / V/s The Commissioner of Income Tax (Exemption), Pune . . . . . . . प्रत्यर्थी / Respondent द्वारा / Appearances Assessee by : Mr Pramod Shingte [‘Ld. AR’] Revenue by : Mr Sardar Singh Meena [‘Ld. DR’] स ु नवाई की तारीख / Date of conclusive Hearing : 23/08/2023 घोषणा की तारीख / Date of Pronouncement : 20/11/2023 आदेश / ORDER PER G. D. PADMAHSHALI; The present appeal of the assessee instituted against DIN & Order No. ITBA/EXM/F/EXM45/2022-23/10465666153(1) dt. 31/10/2022 passed by Ld. CIT(E) u/s 80G(5) of the Income Tax Act [‘the Act’ hereinafter]. 2. We have heard the rival contentions of both parties; subject to provisions of rule 18 of Income Tax Appellate Rules, 1963 [‘ITAT Rules’ hereinafter] perused material placed on records. Sri Trimbakeshwar Devsthan Trust ITA No. 888/PUN/2022 ITAT-Pune Page 2 of 5 3. We note that; 3.1 The assessee is public trust registered u/s 50(3) of the Maharashtra Public Trust Act, 1950 [‘MPT Act’ hereinafter] as ‘Religions Trust’ and has been holding a certificate of registration u/s 12A of the Act since 03/12/1973. 3.2 Under newly amended provisions of the Act, the assessee was granted a regular registration u/s 12A(1)(ac)(i) of the Act on 06/10/2021 which is in force and valid upto Assessment Year [‘AY’ hereinafter] 2026-27. As a corollary, the assessee applied for registration u/s 80G(5) of the Act, which was provisionally approved for a period 08/02/2022 to AY 2024-25. 3.3 For seeking 80G regularisation, the assessee trust filed an application to the respondent vide application No. CIT EXEMPTION. PUNE/2022- 23/12AA/10039 dt. 28/04/2022 in Form No.10AB under clause (iii) of first proviso to sub-section (5) of section 80G of the Act. 3.4 By the impugned order, said application of the assessee trust was rejected by the Ld. CIT(E) quoting various observation which are precisely marshalled into followings; (1) Assessee Trust is purely a religious trust and prime objects as listed in 1 to 7 of its registered trust deed are religious in nature, besides having very few ancillary objectives, hence the assessee is hit by provisions of clause (ii) of section 80G(5) of the Act (2) The objects and purposes of the assessee are confined to a particular ‘Hindu religion’ or ‘Hindu communities’ thus are violative of provisions of clause (iii) of 80G(5) Sri Trimbakeshwar Devsthan Trust ITA No. 888/PUN/2022 ITAT-Pune Page 3 of 5 of the Act (3) Assessee’s religious expenditure for preceding three financial year exceeded the cap of five percent (5%) as prescribed by sub-section (5B) of section 80G of the Act and (4) The whole or substantially whole purpose of assessee trust is of religious in nature, thus exterior to ‘charitable purpose’ by virtue of explanation 3 to section 80G of the Act. 3.5 Aggrieved by the impugned order, the assessee brought up this case challenging cancellation of provisional registration granted to it and denial for regular registration as an institution / fund u/s 80G(2)(iv) of the Act. 4. We observed that, after careful consideration of records the Ld. CIT(E) has noted certain categorical findings which in his opinion de-fact were sufficient to cancel the provisional registration granted earlier and to reject the application made for regular registration/approval u/s 80G(5) of the Act. The matter of fact as solidified by the Ld. DR from point 10 placed at page 1 of impugned order is that, while doing so the appellant was never called upon to refute these negative findings by the Ld. CIT(E). 5. Note well, in terms of clause (ii)(b)(B) of 2nd proviso to 80G(5) of the Act r.w. proviso to rule 11AA(5) of the Income Tax Rules, 1962 the Ld. CIT(E) was duty bound to provide an opportunity in the form of show cause before he could reject application and cancel the provisional registration previously granted to the assessee. Admittedly in the present case, the appellant was never confronted with negative findings on the basis of which its application is rejected and provisional registration is cancelled by the Ld. CIT(E). Sri Trimbakeshwar Devsthan Trust ITA No. 888/PUN/2022 ITAT-Pune Page 4 of 5 6. It is a trite law as laid down by Hon’ble Supreme Court in case ‘Chandra Kishore Jha Vs Mahavir Prasad’ reported in 8 SCC 266 (SC), that ‘if a statute provides for a thing to be done in a particular manner, then it has to be done in that manner and in no other manner’. And this proposition we find been followed their Lordships from ‘UP Vs Singhara Singh’ reported in AIR 1964 SC 358. 7. The clause (ii)(b)(B) of 2nd proviso to 80G(5) of the Act r.w. proviso to rule 11AA(5) of the Income Tax Rules, 1962 specifically provided the manner in which application for registration can be rejected and provisional registration granted can be cancelled. As per this mandate the registering authority was under obligation to put the assessee to notice as soon he arrives at a negative conclusion while exercising his jurisdiction over application for registration. Therefore, his action of rejection without following the forgoing mandate, in our considered view is contra-legem as it suffered from sufficiency of reasonable opportunity to the appellant to refute the findings. 8. The mandate of providing an opportunity before rejecting the application is to safeguard the appellant against arbitrary rejection by the registering authority. This opportunity of being heard to the assessee should be real, reasonable and effective and same should not be empty formalities, it should not be a paper opportunity, the doctrine of natural justice is a facet of fair play in action as no person shall be saddled with a liability without being heard. Sri Trimbakeshwar Devsthan Trust ITA No. 888/PUN/2022 ITAT-Pune Page 5 of 5 9. In the light of decision of High court of Patna in ‘St. Paul’s Anglo Indian Education Trust (2003) 262 ITR 377 (Pat)’ we hold that, rejection of application is unjustified as the assessee deprived of reasonable opportunity and time to produce all relevant documents to refute negative findings and to substantiate its eligibility and claim for registration /recognition of 80G of the Act. 10. Faced with the situation, without commenting on the merits of the case, we deem it fit to remand this matter back to the file of Ld. CIT(E) for according effective opportunities to the assessee to represent and refute the reasons of rejection of its application and cancellation of provisional registration granted to it. 11. In result, the appeal is ALLOWED FOR STATISTCIAL PURPOSE. In terms of rule 34 of ITAT Rules, the order pronounced in the open court on this Monday 20 th day of November, 2023. -S/d- -S/d- S S VISWANETHTRA RAVI G. D. PADMAHSHALI JUDICIAL MEMBER ACCOUNTANT MEMBER प ु णे / PUNE ; ददना ां क / Dated : 20 th day of November, 2023. आदेश की प्रतितलतप अग्रेतिि / Copy of the Order forwarded to : 1.अपीलाथी / The Appellant. 2. प्रत्यथी / The Respondent. 3. The PCIT (E), Pune 4. The CIT, Concerned, Pune 5. DR, ITAT, Bench ‘A’, Pune 6. गार्डफ़ाइल / Guard File. Ashwini आदेशान ु सार / By Order वररष्ठ दनजी सदिव / Sr. Private Secretary आयकर अपीलीय न्यायादधकरण, प ु णे / ITAT, Pune.