The Pune Bench of Income Tax Appellate Tribunal (ITAT) held that in the interest of justice one final opportunity should be provided to the assessee to file the relevant details before the Commissioner of Income Tax (Exemption) [CIT(E)], thus set aside the order of the CIT(E) and remit the matter back to his file for re-adjudication.
The assessee Digambar Jain Saitwal, filed an application for registration under Section 12AA of the Income Tax Act. The CIT(E) issued notice through e-portal and e-mail to the assessee to furnish documents in order to verify the genuineness of the activities of the assessee and compliance to requirements of any other law for the time being in force by the applicant-trust, in pursuance to Section 12AA of the Income Tax Act.
The assessee had to submit all these details and the said notice was duly served on the assessee through. The assessee did submit the details as had been asked for, and after scrutinizing those details, various discrepancies were noticed. Another notice was issued which communicated the said discrepancies and the assessee was asked to comply with this notice .
This notice was also duly served through e-portal and e-mail. However, the assessee neither submitted explanation to the show-case notice nor availed the opportunity of being heard.
The CIT(E) held that since the assessee has not furnished any explanation or details regarding the discrepancies pointed out, therefore it was presumed that the assessee has nothing to say in the matter and resultantly, the application filed by the assessee for registration under Section 12AA of the Income Tax Act was rejected by the Department.
Aggrieved by the order the assessee filed an appeal before the Tribunal.
The Authorised Representative of the assessee (AR) submitted that only two opportunities have been given to the assessee, and they are willing to appear before the CIT(E) with all details/documentary evidences and clarify the discrepancies pointed out and, therefore, prayed that the matter may be remanded to the file of CIT(E).
The Department Representative (DR) did not raise any objection, if the matter would be remanded to the file of the CIT(E).
The Bench comprising of Partha Sarathi Chaudhury, Judicial Member and G.D. Padmahshali, Accountant Member observed that it has to be appreciated that the purpose of the provisions for registration of trust under Section 12AA of the Income Tax Act and granting of exemption under Section 80G of the Income Tax Act, all these sections derives their spirit from the Directive Principles of State Policy enshrined in the Constitution of India.
Therefore, in the interest of justice and considering all the observations, the Tribunal considered that one final opportunity should be provided to the assessee to file the relevant details before the CIT(E) and represent their case on merits.
The bench set aside the order of the CIT(E) and remitted the matter back to his file to re-adjudicate as per law complying with the principles of natural justice.
Hence, appeal of the assessee was allowed for statistical purposes.
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