Siddhashram, Kolhapur V. CIT-II, Kolhapur, Kolhapur

ITA 93/PUN/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4312 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 18-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KUMAR
• Assessee Lawyers: S N DOSHI
• Keywords: Charitable institution; Opportunity of being heard; Principle of natural justice; Cancellation of registration
• Section: 12A; 12AA; 92

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE BEFORE: SHRI R.S. PADVEKAR, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO S . 92 & 93 / P N/ 20 12 ASSESSMENT YEAR : SIDDHASHRAM, 7/50, 1 ST FLOOR, TRAMBAKES H NAGAR, E - WARD, NAGALA PARK, KOLHAPUR VS. COMMISSIONER OF INCOME - TAX - II KOLHAPUR (APPELLANT) (RESPONDENT) PAN NO. AABTS3845E APPELLANT BY: SHRI S.N. DOSHI RESPONDENT BY: SHRI NARENDRA KUMAR DATE OF HEARING : 27 - 06 - 2013 DATE OF PRONOUNCEMEN T : 27 - 06 - 2013 ORDER P ER R.S. PADVEKAR , JM : - THESE TWO APPEALS ARE FILED BY THE ASSESSEE CHALLENGING THE TWO SEPARATE IMPUGNED ORDER S OF THE LD. CIT(A) - II, KOLHAPUR PASSED U/S. 12AA(3) OF THE INCOME - TAX ACT DATED 21 - 11 - 2011 , CANCELLING THE REGISTRAT ION GRANTED TO THE ASSESSEE AND THE ORDER PASSED U/S. 80G(5)(VI) OF THE INCOME - TAX ACT R.W. RULE 11AA (5) OF THE INCOME - TAX RULES, 1962 RESPECTIVELY . 2. WE FIRST TAKE UP THE APPEAL BEING ITA NO.92/PN/2012 , THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE HON'BLE COMMISSIONER OF INCOME - TAX HAS ERRED IN CANCELLING OF APPROVAL U/S. 12A OF THE ACT, 1961. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE HON'BLE COMMISSIONER OF INCOME - TAX HAS ERRED IN HOLDING THAT ALL THE POWERS ARE VESTED WITH THE PRESIDENT SUGGESTING THAT AS IF THE APPELLANT TRUST IS HIS PERSONAL INSTITUTION. 2 ITA NOS. 92 & 93/PN/2012, SIDDHASHRAM, KOLHAPUR 3. THE FACTS WHICH REVEALED FROM THE RECORD ARE AS UNDER. THE ASSESSEE IS STATED TO BE A CHARITABLE TRUST. THE ASSESSEE W AS GRANTED REGISTRATION U/S. 12AA ON 24 - 08 - 1999 VIDE CERTIFICATE NO. S 692/133/73/34/189/99 - 2000. THE LD. CIT INITIATED THE PROCEEDINGS U/S. 12 AA (3) OF THE INCOME - TAX ACT FOR CANCELLING THE REGISTRATION. AS OBSERVED IN THE IMPUGNED ORDER T HE LD. CIT VE RIFIED THE T RUST D EED AND IT WAS NOT ICED THAT THE PRESIDENT WHO IS THE SETTLOR HAS NOT SURRENDERED HIS RIGHT FOR THE CORPUS OF THE TRUST. THE LD. CIT HAS OBSERVED THAT THE PRESIDENT/SETTLOR GOT UNCONTROLLED POWERS DURING HIS LIFE TIME OVER THE FUNCTIONS O F THE TRUST AND ITS FINANCIAL AFFAIRS AND IN CASE OF HIS DEATH ALSO HIS HEIRS GOT EVERY RIGHT OVER THE MANAGEMENT OF TRUST . LD. CIT ACCORDINGLY CO NCLUDED THAT THE ASSESSEE TRUST CANNOT BE SAID TO BE A PUBLIC CHARITABLE TRUST. THE LD. CIT ISSUED NOTICE TO THE TRUST ASKING FOR CERTAIN DETAILS. THE LD. CIT HAS NOTED THAT THE PRESIDENT OF THE TRUST ATTENDED ON 08 - 11 - 2011 AND DENIED RECEIPT OF THE LETTER ISSUED TO HIM DATED 28 - 10 - 2011. HE WAS ALLOWED THE TIME FOR SUBMISSION UPTO 15 - 11 - 2011. THE LD. CIT OBSE RVED THAT IN SPITE OF GIVING THE TIME NEITHER ANY EXPLANATION IS FILED NOR ANY INFORMATION IS FURNISHED CALLED FOR. THE LD. CIT CANCELLED THE REGISTRATION GRATED TO THE ASSESSEE TRUST/INSTITUTION U/S. 12 AA DATED 24 - 08 - 1999 VIDE ORDER DATED 21 - 11 - 2011. N OW BEING AGGRIEVED , THE ASSESSEE HAS FILED THE APPEAL BEFORE US. 4. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD. IN OUR OPINION THE DECISION TAKEN BY THE LD. CIT - II, KOLHAPUR FOR CANCELLING OF THE REGISTRATION GRANTED TO THE ASSESSEE TRUST U/S. 12 AA IS WITH UNDUE HASTE AND IN CROSS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. WE FURTHER FIND THAT FOR THE FIRST TIME THE MATTER WAS FIXED FOR HEARING ON 08 - 11 - 2011 AND ONLY 7 DAYS TIME WAS GIVEN AND ORDER WAS PASSED ON 21 - 11 - 2011. THE LD. CIT HAS NOT RECORDED THE URGENCY FOR PASSING THE IMPUGNED ORDER U/S . 12 AA (3) OF THE ACT. WE , THEREFORE , SET ASIDE THE 3 ITA NOS. 92 & 93/PN/2012, SIDDHASHRAM, KOLHAPUR ORDER OF THE LD. CIT(A) PASSED U/S. 12 AA (3) AND RESTORE THE MATTER BACK TO HIS FILE FOR FRESH CONSIDERATION DE NOVE. THE LD. CIT - II, KOLHAPUR IS DIRECTED TO GIVE REASONABLE OPPORTUNITY OF BEING HEARD AS PER THE PRINCIPLES OF NATURAL JUSTICE AND AFTER CONSIDERING THE SUBMISSIONS AND CONTENTIONS OF THE ASSESSEE , TO PASS THE ORDER DECIDING THE FAITH OF THE ASSESSEE TRUST U/S. 12 AA (3) OF THE INCOM E - TAX ACT. IN THE RESULT, APPEAL IS ALLOWED FOR THE STATISTICAL PURPOSE. 5. NOW WE TAKE UP APPEAL BEING ITA NO. 93/PN/2012 . THE ASSESSEE HAS TAKEN FOLLOWING GROUND IN THE APPEAL: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE HON'BLE COMMISSIO NER OF INCOME - TAX HAS ERRED IN WITHDRAWING THE APPROVAL GIVEN U/S. 80G(5)(IV) OF THE INCOME - TAX ACT, 1961 OVERLOOKING THE FACT THAT IT IS PERPETUAL. 6. THE ASSESSEE IS AGGRIEVED BY THE ORDER PASSED BY THE LD. CIT - II, KOLHAPUR WITHDRAWING THE APPROVAL G RANTED U/S. 80G(5)(VI). THE ASSESSEE WAS GRANTED THE REGISTRATION/APPROVAL UPTO 31 - 03 - 2011 WHICH WAS EXTENDED IN PERPETUITY FOLLOWING THE CBDT CIRCULAR NO. 7/2010 DATED 27 - 10 - 2010 . A S THE REGISTRATION GRANTED TO THE ASSESSEE U/S. 12 AA WAS CANCELLED BY T HE LD. CIT VIDE ORDER U/S. 12 AA (3) DATED 21 - 11 - 2011 , I N CONSEQUENCE , THE APPROVAL GRANTED TO THE ASSESSEE U/S. 80G(5)(VI) HAS BEEN WITHDRAWN WHICH IS A CONSEQUENTIAL ACTION ON CANCELLATION OF REGISTRATION GRANTED U/S. 12AA. IN THIS CASE ALSO EX - PARTE OR DER IS PASSED GIVING VERY SHORT TIME TO THE ASSESSEE. WE , THEREFORE , SET ASIDE THE ORDER PASSED BY THE LD. CIT - II , KOLHAPUR U/S. 80G(5)(VI) OF THE INCOME - TAX ACT R.W. RULE 11 AA (5) AND RESTORE THE MATTER TO HIS FILE FOR DE NOVO CONSIDERATION. NEEDLES S T O SAY THAT LD. CIT - II, KOLHAPUR IS DIRECTED TO CONSIDER ALL THE SUBMISSIONS AND CONTENTIONS OF THE ASSESSEE AND THEN TO DECIDE THE FAITH OF THE ASSESSEE. T HE ASSESSEE SHOULD BE GIVEN REASONABLE OPPORTUNITY OF BEING HEARD AS PER THE PRINCIPLES OF NATURAL J USTICE. 4 ITA NOS. 92 & 93/PN/2012, SIDDHASHRAM, KOLHAPUR 7. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. PRONOUNCED IN THE OPEN COURT ON 27 - 06 - 20 1 3 SD/ - SD/ - ( R.K. PANDA ) ( R.S. PADVEKAR ) ACCOUNTANT MEMBER JUDICIAL MEMBER RK /PS PUNE , DATED : 27 TH JUNE, 20 1 3 COPY TO 1 ASSESSEE 2 DEPARTMENT 3 THE CIT - II, KOLHAPUR 4 THE JT. CIT, RANGE - 2, KOLHAPUR 5 THE DR, ITAT, A BENCH, PUNE . 6 GUARD FILE. //TRUE COPY// BY ORDER PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE