Fredom Fighter Baba Gurmukh Singh Educational Welfare Society, Barnala V. CIT(E), Chandigarh

ITA 952/CHANDI/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 4468 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-10-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2019-2020
• Appeal Filed On: 26-06-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C CHANDRAKANTA CIT
• Keywords: Opportunity of being heard; Principle of natural justice; Set aside; Audi alteram partem
• Section: 12A; 12AA

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BE NCH A, CHANDIGARH (VIRTUAL COURT) .., !' '# $, % &' BEFORE: SHRI. N.K.SAINI, VP & SHRI , SANJAY GARG, J M ITA NO.952/CHD/2019 ASSESSMENT YEAR : 2019-20 FRE E DOM FIGHTER BABA GURMUKH SINGH EDUCATIONAL WELFARE SOCIETY GREEN FIELD CONVENT SCHOOL, DHANULA ROAD BARNALA, PUNJAB THE CIT(E) CHANDIGARH PAN NO: AAATF4748A APPELLANT RESPONDENT !' ASSESSEE BY : SHRI RAJIV SALDI, CA #!' REVENUE BY : SMT. C. CHANDRAKANTA, CIT $ %! & DATE OF HEARING : 22/10/2020 '()*! & DATE OF PRONOUNCEMENT : 22/10/2020 &(/ ORDER PER N.K. SAINI, VICE PRESIDENT THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DT. 29/05/2019 OF THE LD. CIT(E), CHANDIGARH. 2. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: 1. THAT THE LD. PRINCIPAL CIT EXEMPTION ARBITRARILY REJECTED THE APPLICATION OF APPELLANT, WHICH IS ILLEGAL AND AGAINST THE FACTS O N RECORD. 2. THAT THE LD. PRINCIPAL CIT EXEMPTIONS WRONGLY RE JECTED THE APPLICATION STATING THAT GENUINENESS OF THE ACTIVITIES CANNOT BE EXAMINED IN THE ABSENCE OF FINANCIAL STATEMENTS OF THE SOCIETY WHEREAS THE FINANCIALS WERE ALREADY ON RECORD. 3. THE ONLY GRIEVANCE OF THE ASSESSEE IN THIS APPEAL RE LATES TO THE REJECTION OF APPLICATION FOR REGISTRATION UNDER SECTION 12A OF THE INC OME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT). 2 4. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE ELE CTRONICALLY FILED AN APPLICATION IN FORM NO. 10 ON 13/11/2018 SEEKING REGISTRATION UND ER SECTION 12A OF THE ACT. THE AIMS AND OBJECTS OF THE SOCIETY ARE TO ADVERTISE ED UCATION IN POOR CHILDREN, TO PROVIDE FREE EDUCATION TO NEEDY CHILDREN, TO MAKE INNOVATIVE EXP ERIMENTS REGARDING EDUCATION, TO SPREAD THE EDUCATION IN SOCIETY, TO ARR ANGE CULTURAL & SPORTS TOURNAMENTS, TO MOTIVATE THE YOUTH & CHILDREN TOWARDS SP ORTS & TRAINING OF COMPUTER AND TO PREPARE SCHEMES FOR SOCIAL WELFARE ETC. 5. LD. CIT(E) IN ORDER TO APPRAISE THE ACTIVITIES, IS SUED THE QUESTIONNAIRE THROUGH ONLINE PORTAL ON 06/02/2019 TO THE ASSESSEE WITH A REQU EST TO PROVIDE CLARIFICATION TO THE QUERIES RAISED. IN RESPONSE, THE ASSESSEE SUBMITTED THE REPLY MANUALLY VIDE LETTER DT. 16/02/2019. THE LD. CIT(E) OBSERVED THAT THE ASSESSEE SOCIETY HAD NOT PROVIDED THE BALANCE SHEET, INCOME & EXPENDITURE ACCOUNT AND RECEIPT & PAYMENT ACCOUNT FOR THE LAST THREE YEARS. HE AGAIN SENT A QUESTIONNAIRE THROUG H ITBA ON 26/04/2019 TO THE ASSESSEE TO FURNISH FURTHER DETAILS BY 03/05/2019. IN RESPONSE, THE ASSESSEE SUBMITTED THE REPLY VIDE LETTER DT. 02/05/2019. LD. CIT(E) HOWEVER DID NOT FIND MERIT IN THE SUBMISSIONS OF THE ASSESSEE AND REJECTED THE APPLICATION FOR REGIST RATION UNDER SECTION 12AA OF THE ACT BY OBSERVING IN PARA 8 OF THE IMPUGNED ORDER AS UNDE R: IN THE ABSENCE OF FINANCIALS STATEMENT OF THE SOC IETY, THE GENUINENESS OF THE ACTIVITIES CANT BE EXAMINED. IN VIEW OF THE ABOVE, THE PRESEN T APPLICATION FOR REGISTRATION U/S 12AA IS ACCORDINGLY REJECTED. 6. NOW THE ASSESSEE IS IN APPEAL. 7. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ALL THE INFORMATIONS ASKED BY THE LD. CIT(E) WERE FURNISHED AND EVEN THE FINANCIAL STATEMENTS W ERE ALSO SUBMITTED TO THE LD. CIT(E) WHO WITHOUT EXAMINING THE SAME AND ASKING THE ASS ESSEE FOR FURTHER DETAILS REJECTED THE APPLICATION WHICH IS AGAINST THE PRINCIPL E OF NATURAL JUSTICE AND THAT NO OPPORTUNITY OF BEING HEARD TO CLARIFY THE DISCREPANCY, IF ANY, WAS PROVIDED TO THE ASSESSEE. 8. IN HER RIVAL SUBMISSIONS THE LD. CIT DR STRONGLY S UPPORTED THE IMPUGNED ORDER PASSED BY THE LD. CIT(E). 3 9. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIE S AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, THE CLAIM OF THE LD. COUNSEL FOR THE ASSESSEE IS THAT ALL THE FINANCIAL STATEMENTS WERE F URNISHED TO THE LD. CIT(E) WHO WRONGLY MENTIONED THAT THE FINANCIAL STATEMENTS WERE NOT FU RNISHED. IN OUR OPINION IF ANY FURTHER CLARIFICATION OR EXPLANATION WAS REQUIRED BY THE LD. CIT(E), HE OUGHT TO HAVE ASKED THE ASSESSEE FOR THE SAME, HOWEVER IN THE PRESENT CASE APPLICATION MOVED BY THE ASSESSEE UNDER SECTION 12AA OF THE ACT HAS BEEN REJEC TED EXPARTE. IT IS WELL SETTLED THAT NOBODY SHOULD BE CONDEMNED, UNHEARD AS PER THE MAXIM , AUDI ALTERAM PARTEM . 10. WE THEREFORE KEEPING IN VIEW THE PRINCIPLE OF NATUR AL JUSTICE DEEM IT APPROPRIATE TO SET ASIDE THIS CASE BACK TO THE FILE OF LD. CIT(E ) TO BE ADJUDICATED AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING DUE AND REASONABL E OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED F OR STATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE OPEN COURT ON 22/10/2020). SD/- SD/- '# $ .., (SANJAY GARG ) ( N.K. SAI NI) % &'/ JUDICIAL MEMBER / VICE PRESIDENT AG DATE: 22/10/2020 (+! ,-.- COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. $ / CIT 4. $ / 01 THE CIT(A) 5. -2 45&456789 DR, ITAT, CHANDIGARH 6. 8:% GUARD FILE