Madras High Court
Sri Bala Educational Trust vs The Commissioner Of Income Tax -I on 17 June, 2015
Author: R.Sudhakar
Bench: R.Sudhakar, K.B.K.Vasuki
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 17.06.2015
CORAM:
THE HONOURABLE MR.JUSTICE R.SUDHAKAR
AND
THE HONOURABLE MS.JUSTICE K.B.K.VASUKI
T.C. (A) No.247 of 2015
Sri Bala Educational Trust
99 Butterworth Road,
Trichy- 620 002. ... Appellant
Vs
The Commissioner of Income Tax -I
Trichirapalli. ... Respondent
Prayer:- This Tax Case (Appeal) is filed, under Section 260A of the Income Tax Act 1961 against the order of the Income Tax Appellate Tribunal 'D' Bench, Chennai dated 20.3.2015 in ITA.No.2952/Mds/2014.
For Appellant : Mr.M.Palani
For Respondent : Mr.J.Narayanasamy
JUDGMENT
(Delivered by K.B.K.VASUKI, J) This Tax Case Appeal is filed by the assessee against the order of the Tribunal, raising the following substantial questions of law:
(a)Whether on the facts and in the circumstances of the case, the ITAT was right in dismissing the appeal for want of prosecution when the notice of first hearing itself was not served on the appellant/assessee?
(b)Whether the ITAT being the Appellate Forum is right in dismissing the appeal for want of prosecution without calling for the records from the department?
2.Few facts, which are relevant for consideration herein are as follows: The assessee M/s.Bala Educational Trust has been granted registration under section 12AA of the Income Tax Act, 1961 as Public Charitable Trust vide order dated 31.05.2010. Thereafter, the Trust was issued a show cause letter dated 1.9.2014, calling for explanation for non filing of return of income of the Trust relating to Assessment Years upto 2014-2015. It was also intimated in the same show cause letter that in the event of no information being received within the date specified in the show cause letter, the registration granted under section 12AA of the Act will be withdrawn. The office letter above referred to was admittedly returned unserved with endorsement "no such addressee, return to sender". In view of the same, the respondent arrived at the conclusion that the Trust is not in existence and accordingly cancelled the registration granted to the Trust by order 24.09.2014. On due receipt of the same, the Trust preferred an appeal before the Income Tax Appellate Tribunal and the Tribunal, having entertained the appeal, issued notice of hearing to the Trust and the notice of hearing was again returned unserved with a remark "no such addressee" and the same compelled the Tribunal to draw an adverse inference that the assessee is not interested in prosecuting the appeal and the appeal was hence dismissed for want of prosecution. Thereafter, the final order was communicated to the Trust and the same was duly received by the assessee in the same address, to which the notice of hearing was already sent. On receipt of the same, the Trust has come forward with the present appeal before this Court.
3.The main contention raised on the side of the appellant-Trust is that the show cause letter dated 1.9.2014 was issued to the Trust for non filing of the return of income, without verifying the fact that the return was duly filed in the concerned jurisdictional Assessing Office and both the Authorities below have arrived at the conclusion that the Trust was not in existence and the Trust was not interested in prosecuting the appeal, without considering the fact that the absence of the appellant Trust for the hearing is for want of service of notice on them. The learned counsel for the Appellant has drawn the attention of this court to the typed set enclosing acknowledgement received by the Trust from the Income Tax department for filing the returns in the prescribed form for the Assessment Years from 2008-09 to 2014-15. The learned counsel for the petitioner has also brought to the notice of this court that the address mentioned in the returns is the same address as given in the notice and had it been duly verified by the Authorities below, the same would not have resulted in adverse inference leading to adverse order against the Trust. The learned counsel for the petitioner would, argue that the order impugned herein is hence arbitrary, outcome of non-application of mind and in violation of the principles of natural justice and the same may be set aside and the matter may be remanded back for fresh disposal to the authority concerned.
4.The relief sought for herein is seriously opposed by the learned standing counsel for the Revenue. It is strenuously argued on the side of the Revenue before this Court that the Trust, having not duly complied with the statutory requirement and having not duly appeared before the Authorities below, is dis-entitled to seek indulgence of this Court.
5.Heard both sides and perused the materials placed before this Court.
6.We are of the considered view that due appreciation of the arguments advanced herein in the light of the copies of the documents produced herein would amply demonstrate that the failure of the Trust to respond to the notice and non-appearance of the Trust before the Authorities below is only for want of service of notice and not otherwise. As no reason can be attributed to the conduct of the Trust for non service of show cause letter and notice of hearing, the appellant-Trust cannot be held responsible for non service of notice, which resulted in their inability to furnish the particulars called for by the respondent-Commissioner of Income Tax and in their failure to appear before the Authorities below. Under such factual background, the Authorities below ought to have resorted to fresh notice and ought not to have hurriedly arrived at the conclusion that the Trust was either not in existence or not interested in prosecuting the appeal. Such a course adopted by the Authorities below is not only against law, but also in violation of the principles of natural justice and has resulted in an erroneous adverse order against the Trust. As such, the order impugned herein cannot be allowed to sustain and the issue involved herein is answered against the Revenue and in favour of the appellant Trust.
R.SUDHAKAR, J.
AND K.B.K.VASUKI, J.
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7.In the result, the Tax Case Appeal is allowed by setting aside the impugned order passed by the Tribunal and the matter is remanded back to the original authority for fresh disposal, after giving due notice and personal hearing to the parties. No costs.
[R.S.J.] & [ K.B.K.V.J.]
17.06.2015
Index:Yes/No
Web:Yes/No
rk
To
1.The Income Tax Appellate Tribunal,
D Bench, Chennai.
2.The Commissioner of Income Tax-I, Trichirapalli.
T.C. (A) No.247 of 2015