2009 (12) TMI 72 - HC - Income Tax

Certificate of recognition u/s 80G(5) - The petitioner filed an application for Certificate of recognition under Section 80G(5) of the Income Tax Act, along with the application for registration under u/s.12AA of the said Act. The Assessing Officer was asked to conduct a preliminary enquiry regarding the activities of the petitioner s Trust and he submitted his report on 11.01.2008 and recommended for registration u/s.12AA of the I.T. Act. Based on the recommendation of the Assessing Officer, registration u/s/12AA was granted on 18.02.2008. But the certificate of recognition u/s 80G(5) of the I.T. Act was refused by the respondent, by order, dated 30.04.2008 and that order is challenged in this writ petition - Though, in the counter, it was stated that opportunity was given to the petitioner, before passing of the order, dated 30.04.2008, there is no denial to the averments made in the writ petition that in response to the letter, dated 29.05.2008, issued by the respondent, the petitioner submitted the documents as called for. Further, no explanation has been stated by the respondent why the Income Tax Office, Head Quarters No.1, Madurai directed the petitioner to appear before the respondent, when order was already passed. Hence, it is hard to digest the explanation of the respondent stated in the counter that due to inadvertence and due to confusion regarding the name, the order could not be sent earlier. As it has been proved by the petitioner that during the pedency of the enquiry, the impugned order has been passed, it is liable to be set aside and hence, it is hereby set aside. Respondent department directed to consider u/s.80G(5) application submitted

Summary

Issues:
- Recognition under Section 80G of the Income Tax Act, 1961

Analysis:
The petitioner filed a writ petition seeking recognition under Section 80G of the Income Tax Act, 1961. The petitioner had already obtained registration under Section 12AA of the Act based on a favorable recommendation by the Assessing Officer. However, the certificate of recognition under Section 80G(5) was refused by the respondent, leading to the challenge in the writ petition.

The petitioner's counsel argued that the order was passed without giving the petitioner an opportunity to present necessary documents and information. It was contended that the respondent's actions were premature and against the principles of natural justice. The petitioner claimed that even if the order was dated 30.04.2008, no opportunity was provided to submit the required documents as mandated by Rule 11AA(2).

On the other hand, the respondent's counsel argued that the order was indeed passed on 30.04.2008, but due to confusion regarding another trust, the communication of the order was delayed. The respondent maintained that the refusal of the certificate was valid, and there was an appeal provision available under the Income Tax Act, which the petitioner had not utilized before filing the petition.

After considering the submissions from both parties, the court examined the documents and found discrepancies in the respondent's actions. It was noted that the petitioner had responded to the respondent's requests for information and had even appeared before the authorities, providing necessary details. The court concluded that the order refusing recognition under Section 80G(5) was passed prematurely without allowing the petitioner a fair opportunity to present the required documents.

In the final judgment, the court allowed the writ petition, setting aside the impugned order and remanding the matter back to the respondent. The respondent was directed to reconsider the application for recognition under Section 80G(5) in accordance with the law, emphasizing the importance of providing the petitioner with a proper opportunity to present their case.