M/S TULSI GRAMODYOG SEVA SAMITI LKO. THRU. ITS PRESIDENT V. PRINCIPAL CHIEF COMMISSIONER OF INCOME TEX LKO. AND OTHERS

/96/2022

AI Insights

The case involves M/S Tulsi Gramodyog Seva Samiti, a petitioner, challenging the cancellation of their registration under Sections 12-AA and 18-G of the Income Tax Act by the Commissioner of Income Tax (Exemption). The petitioner argued that they were not given a reasonable and sufficient opportunity to cross-examine a key witness, Shri Paras Mal Daga, as required by a previous appellate tribunal's remand order. The respondents contended that multiple opportunities were provided, which the petitioner failed to avail. The court found that the notices for cross-examination were not adequately communicated, leading to a denial of natural justice, and thus quashed the impugned orders.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 732945 (HC-LUCKNOW)
• Appeal Type: Others
• Pronouncement Date: 18-05-2022
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Applicant
• Court: HIGH COURT
• Department Lawyers: MANISH MISRA
• Assessee Lawyers: PRADEEP AGRAWAL; AMAR MANI TIWARI
• Keywords: Charitable Trust; Cross Examination; Cross-examination; Income Tax; Natural Justice; Registration cancellation
• Section: 12-AA; 18-G

Judgement Text

"Court No. - 2 Case :- WRIT TAX No. - 96 of 2022 Petitioner :- M/S Tulsi Gramodyog Seva Samiti Lko. Thru. its President Respondent :- Principal Chief Commissioner Of Income Tax Lko. and others Counsel for Petitioner :- Pradeep Agrawal,Amar Mani Tiwari Counsel for Respondent :- Manish Misra Hon'ble Devendra Kumar Upadhyaya,J. Hon'ble Subhash Vidyarthi,J. Heard Shri Pradeep Agrawal, learned counsel representing the petitioner and Shri Manish Misra, learned counsel representing the respondents. By means of this petition, challenge has been made to the orders dated 29.04.2022 and 04.05.2022 whereby the registration granted to the petitioner under Section 12-AA of the Income Tax Act has been cancelled and the registration for acceptance of donation under Section 18-G of the said Act has also been cancelled. Earlier, orders cancelling the registration as Charitable Trust and also cancelling the registration for acceptance of donation by the petitioner was challenged in appeal which was decided by means of the appellate order dated 07.12.2018 and the matter was remitted to the Commissioner of Income Tax (Exemption) for reconsideration. The appellate tribunal while passing the said order dated 07.12.2018 remitted the matter to the Commissioner of Income Tax (Exemption) with a direction to afford reasonable and sufficient opportunity to the petitioner for cross-examining one Shri Paras Mal Daga and decide the issue afresh. It appears that since the matter in terms of the said remand order dated 07.12.2018 was not being decided, the petitioner preferred Writ Petition No. 15145 (M/B) of 2021 which was disposed of with the observation and direction that the Commissioner of Income Tax (Exemption) shall dispose of the proceedings pending before him pursuant to the appellate remand order dated 07.12.2018 preferably within three months. It is in pursuance of the aforesaid appellate order dated 07.12.2018 that now the matter has been decided and the orders impugned in this writ petition dated 29.04.2022 and 04.05.2022 have been passed. It has been submitted by learned counsel for the petitioner that the order passed by the appellate tribunal, dated 07.12.2018 was amply clear and the matter was remanded to the Commissioner of Income Tax (Exemption) with a mandate that Commissioner of Income Tax (Exemption) shall provide \"reasonable and sufficient\" opportunity to the petitioner to cross-examine Shri Paras Mal Daga, however, while deciding the matter afresh he has not afforded reasonable and sufficient opportunity so that the petitioner could exercise his right to cross- examine Paras Mal Daga. On the other hand, learned counsel representing the respondents Shri Manish Misra has submitted that petitioner has been given various opportunities to cross-examine Shri Paras Mal Daga. However, the petitioner himself did not avail the same and accordingly, the Commissioner of Income Tax (Exemption) cannot be faulted with. Drawing attention of the Court to a chart which is part of the order impugned in this writ petition, it has been stated by Shri Manish Misra that the petitioner was given opportunity to cross-examine Shri Paras Mal Daga on 30.12.2021, 23.03.2022, 11.04.2022, 19.04.2022 by issuing notices dated 23.12.2021, 16.03.2022, 06.04.2022, 12.04.2022 and again on 13.04.2022. In this view, the submission is that the petitioner was afforded adequate opportunity. Refuting the aforesaid submission, learned counsel for the petitioner has submitted that the aforementioned dates were not the dates communicated by the Commissioner of Income Tax (Exemption) for permitting the petitioner to cross- examine Shri Paras Mal Daga; rather these were the dates issued for submitting reply to the show cause notice. It has also been stated by learned counsel representing the respondents that apart from serving notice dated 20.04.2022 through speed post, the petitioner was given notice of the proceedings to be conducted on 26.04.2022 for the purposes of cross-examining Shri Paras Mal Daga, through e-mail as well. Having heard the learned counsel appearing for the parties and perused the documents available before us, what we find is that in the impugned orders, though various dates have been mentioned right from 30.12.2021 to 19.04.2022 on which dates, the matter before the Commissioner of Income Tax (Exemption) is said to have been fixed, however, the order does not show that the said dates were fixed for the purposes of cross-examining Shri Paras Mal Daga. The order only indicates the date of compliance in respect of the notices/show cause. Further, from perusal of the track report of the speed post, which is available at Page-90 of this writ petition, what we find is that the notices dated 20.04.2022 was booked at some Kolkata post office on 22.04.2022 at 7:03 PM which has been delivered to the petitioner on 26.04.2022 at 7:54 PM. The notice dated 22.04.2022 sent through speed post was undisputably served upon the petitioner on 26.04.2022 i.e a day after date for cross-examining Shri Paras Mal Daga was fixed i.e. 25.04.2022. Such a course adopted for serving of notice to the petitioner has thus resulted in denial of observance of principles of natural justice. Even if we presume that notice dated 20.04.2022 was sent to the petitioner through e-mail and it was received by the petitioner on the same date, what we find is that the petitioner resides in Lucknow whereas the proceedings were being conducted at Kolkata and hence considering the time which may the petitioner may take in travelling to Kolkata from Lucknow, in our considered opinion, the petitioner was denied adequate opportunity so that he could attend the proceedings for cross-examining Shri Paras Mal Daga. In the aforesaid view of the matter, we are convinced that the impugned orders have been passed in complete denial of principles of natural justice as also in derogation of the remand appellate order dated 07.12.2018, hence, the same cannot be permitted to sustain in the eye of law. Accordingly, the writ petition is allowed and the orders impugned dated 29.04.2022 and 04.05.2022 which have been annexed as annexure Nos. 15 and 16 to the writ petition are hereby quashed. Further, we direct that the Commissioner of Income Tax (Exemption), Kolkata shall give opportunity to the petitioner to cross-examine Shri Paras Mal Daga. To avoid any ambiguity, we provide that the matter shall be fixed before the Commissioner of Income Tax (Exemption), Kolkata on 14.06.2022 on which date the petitioner shall be permitted to cross-examine Shri Paras Mal Daga. For the said purpose, no notice will be required to be served upon the petitioner by the Commissioner of Income Tax (Exemption), Kolkata. However, the Commissioner of Income Tax (Exemption) shall take requisite steps to ensure the presence of Shri Paras Mal Daga on the said date so that the petitioner may be given the opportunity to cross-examine him. On being cross-examined, if any proceedings are to be drawn further, the same shall also be drawn and thereafter, the final order may be passed by the competent authority within next four weeks thereafter. Costs made easy. Order Date :- 18.5.2022 Jaswant Digitally signed by JASWANT KUMAR Date: 2022.05.20 12:28:03 IST Reason: Location: High Court of Judicature at Allahabad, Lucknow Bench "