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Income Tax Appellate Tribunal - Chandigarh

Fredom Fighter Baba Gurmukh Singh ... vs Cit(E), Chandigarh on 22 October, 2020

आयकर अपील य अ धकरण,च डीगढ़ यायपीठ "ए" , च डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH "A", CHANDIGARH (VIRTUAL COURT) ी एन.के.सैनी, उपा य एवं ी संजय गग$, या%यक सद'य BEFORE: SHRI. N.K.SAINI, VP & SHRI , SANJAY GARG, JM आयकर अपील सं./ ITA NO.952/Chd/2019 नधा रण वष / Assessment Year : 2019-20 Freedom Fighter Baba Gurmukh बनाम The CIT(E) Singh Educational Welfare Society Chandigarh Green Field Convent School, Dhanula Road Barnala, Punjab थायी लेखा सं./PAN NO: AAATF4748A अपीलाथ /Appellant यथ /Respondent नधा रती क! ओर से/Assessee by : Shri Rajiv Saldi, CA राज व क! ओर से/ Revenue by : Smt. C. Chandrakanta, CIT सन ु वाई क! तार&ख/Date of Hearing : 22/10/2020 उदघोषणा क! तार&ख/Date of Pronouncement : 22/10/2020 आदे श/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 on record.

2. That the Ld. Principal CIT Exemptions wrongly rejected 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 relates to the rejection of application for Registration under section 12A of the Income Tax Act, 1961 (hereinafter referred to as 'Act').

4. Facts of the case in brief are that the assessee electronically filed an application in Form No. 10 on 13/11/2018 seeking Registration under section 12A of the Act. The aims and objects of the society are to advertise education in poor children, to provide free education to needy children, to make innovative experiments regarding education, to spread the education in society, to arrange cultural & sports tournaments, to motivate the youth & children towards sports & training of computer and to prepare schemes for social welfare etc.

5. Ld. CIT(E) in order to appraise the activities, issued the Questionnaire through online portal on 06/02/2019 to the assessee with a request 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 through 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 Registration under section 12AA of the Act by observing in para 8 of the impugned order as under:

" In the absence of financials statement of the society, the genuineness of the activities can't be examined. In view of the above, the present 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 were also submitted to the Ld. CIT(E) who without examining the same and asking the assessee for further details rejected the application which is against the principle 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 supported the impugned order passed by the Ld. CIT(E).

9. We have considered the submissions of both the parties 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 furnished to the Ld. CIT(E) who wrongly mentioned that the Financial Statements were not furnished. 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 rejected 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 natural 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 reasonable opportunity of being heard to the assessee.

11. In the result, appeal of the Assessee is allowed for statistical purposes.

(Order pronounced in the open Court on 22/10/2020).

          Sd/-                                                       Sd/-
       संजय गग$                                                   एन.के.सैनी,
    (SANJAY GARG )                                              ( N.K. SAINI)
 या%यक सद'य/ Judicial Member                               उपा य / VICE PRESIDENT
AG
Date: 22/10/2020

आदे श क! त,ल-प अ.े-षत/ Copy of the order forwarded to :

1. अपीलाथ / The Appellant

2. यथ / The Respondent

3. आयकर आय/ ु त/ CIT

4. आयकर आय/ ु त (अपील)/ The CIT(A)

5. -वभागीय त न4ध, आयकर अपील&य आ4धकरण, च7डीगढ़/ DR, ITAT, CHANDIGARH

6. गाड फाईल/ Guard File