2016 (3) TMI 1273 - AT - Income Tax

Rejection of claim u/s 80G(5)(vi) - empower Deputy Director(Systems) to hear any matter under section 12AA and 80G(5)(vi) - Held that - It is for the Ld. CIT(Exemptions) to hear and conduct the proceeding himself, after giving opportunity of being heard to the assessee shall pass an order in accordance with law. The order sheet clearly shows that only at the end of entire order sheet the Ld. CIT(Exemptions) put his initial. The impugned order are therefore violative of the provisions of law and does not given power to the CIT (Exemptions) to delegate his power to the Deputy Director (Systems) to hold enquiry and proceedings under the above provisions. The assessee therefore rightly contended that the order is passed arbitrary without giving any proper / personal opportunity of being heard in the matter. In this view of the matter, we are of the view that impugned orders of the Ld. CIT(Exemptions) cannot be sustained in law and the matter requires re-consideration at the level of CIT(Exemptions) Chandigarh. We accordingly set aside the both the impugned orders and restore the matter in issue to the file of CIT(Exemptions) Chandigarh with direction to re-decide both the matters afresh. Appeal of the assessee are allowed for statistical purpose.

Summary

Issues:
1. Rejection of application under section 80G(5)(vi) and section 12AA of the Income Tax Act.

Analysis:
The judgment pertains to two appeals by the assessee challenging orders of the Ld. CIT(Exemption) rejecting applications under section 80G(5)(vi) and section 12AA of the Income Tax Act. The impugned orders were based on the assessee's failure to provide requested information and the absence of maintained books of account, leading to doubts about the genuineness of the trust's activities. The assessee argued that the orders were arbitrary as proper opportunities for being heard were not granted. The order sheet revealed that the proceedings were conducted by Deputy Director (Systems) instead of the Ld. CIT(Exemptions), contrary to the requirements of the Act.

The Tribunal observed that the law does not authorize the Deputy Director (Systems) to handle matters under section 12AA and 80G(5)(vi) of the Act. Only the Ld. CIT(Exemptions) has the authority to conduct proceedings, provide opportunities for being heard, and pass orders. Since the proceedings were not conducted by the Ld. CIT(Exemptions) himself, the orders were deemed violative of the law. Consequently, the Tribunal set aside the impugned orders and directed the matter to be reconsidered by the Ld. CIT(Exemptions) personally, emphasizing the need for a fair opportunity for the assessee to present their case.

In conclusion, the Tribunal allowed both appeals for statistical purposes, highlighting the necessity for the Ld. CIT(Exemptions) to personally conduct the proceedings and make decisions in accordance with the law. The judgment underscores the importance of procedural fairness and adherence to legal requirements in matters of registration and approval under the Income Tax Act.