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TMI Blog2016 (2) TMI 1157X X X X Extracts X X X X X X X X Extracts X X X X ..... he Ministry of Finance for passing an order either accepting or rejecting the prayer for approval. For that purpose the Ministry is entitled to make further enquiry into the matter. Provision for such further enquiry is there in Rule 9 and 10 quoted above. In case the Ministry allows the prayer, there is no reason why any further hearing is to be given. In case it is inclined to reject the prayer, it has to disclose reasons but before it does that it is required to give an opportunity of hearing to the applicant. Therefore, hearing before the member (IT) CBDT and the CIT proposed by the letter dated 26th February, 2013 was not the end of the road. The writ petitioner by refusing to appear at personal hearing and by refusing to satisfy the CIT as regards its eligibility prevented the statutory authority from performing its job. In the circumstances there was no occasion for any further hearing before rejecting the prayer for approval - FMA 3161 of 2015 - - - Dated:- 15-2-2016 - Girish Chandra Gupta And Indrajit Chatterjee, JJ. Mr. R.K.Murarka And Mrs. Sutapa Roy Chowdhury for the Appellant. Mr. Nizamuddin for the respondents. JUDGEMENT: The Subject matter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2013 passed by the Government of India, Ministry of Finance rejecting an application for approval as a Scientific Research Association under section 35(1)(ii) of the Income-tax Act, which reads as follows: Thus, in view of the above facts, it is contended that M/s. Indian Institute of Chemical Engineers, Kolkata does not fulfill the requirement for the grant of approval as a scientific research association for the purposes of section 35(1)(ii) of the Act. The Competent Authority, being the Union Finance Minister has therefore, rejected application in Form 3CF-I filed by the applicant. The decision of Central Government taken u/s 35(1)(ii) of I.T. Act is being communicated by the undersigned. Mr. Murarka advanced two submissions: (a) that the order was passed by an authority which had no jurisdiction and (b) that the order was passed without affording an opportunity of hearing to the writ petitioner. We find no substance in the second submission because by the letter dated 26th February, 2013, the Government of India, Ministry of Finance, dealing with the application made by the writ petitioner for approval under section 35(1)(ii) of the Income Tax Act, 1961 with eff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lease note that in view of statutory limitation involved, it will not be possible to entertain any request for adjournment and the matter would be decided on the basis of information on record. The aforesaid letter dated 26th February, 2013, was replied by the writ petitioner, by a letter dated 4th March, 2013, as follows: This is furtherance to your letter no.F.No.203/14/2012-ITA(II) dated 05-10- 2012 and our reply dated 31-10-2012. By the captioned letter dated 26-02-2013 you have sought various explanations and clarifications in connection with our application for registration under Section 35(1)(ii) of the Income-tax Act, 1961 for the period 01.04.2011 and onward. In this regard we wish to submit that the Institute is in receipt of similar correspondence from your office, Letter No. F. No. 203/40/2009/ITA.11 dated 27.02.2013 for the earlier years in connection with our application under Section 35(1)(ii) of the Income-tax Act, 1961. The copy of our reply dated 02-03-2013 submitted in response thereof is enclosed four your kind perusal and record. In view of the above we request your goodself to kindly keep the proceedings in abeyance till the matters of the earlie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er. The writ petitioner was given enough opportunity to substantiate its claim for approval under section 35(1)(ii) of the Income Tax Act. But the writ petitioner chose not to avail the same. Therefore, the first submission of the writ petitioner is altogether without any merit and is rejected. The second submission is as regards jurisdiction of the authorities to decide the matter. Mr. Murarka, submitted that it would appear from a copy of the order sheet disclosed by the respondent/department which is at page 460 of the paper book that the Finance Minster did not in effect decide anything. He merely approved rejection of the writ petitioner s application for approval. The aforesaid order sheet has to be compared according to him with paragraph 7 of the order dated 21st March, 2013 which we already have quoted at page 3 above, from which it will appear that the purport of the order dated 21st March, 2013 is that the competent authority rejected the application and the competent authority according to the aforesaid order is the Finance Minister. Mr. Murarka, submitted that the Supreme Court in the case of G. Nageswara Rao -v- Andhra Pradesh State Road Transport Corporation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the Member (IT) for grant of approval or rejection of the application before the expiry of the period of three months to be reckoned from the end of the month in which the application form was received in his office. (9) The Central Government may before granting approval under clause (ii) or clause (iii) shall call for such documents or information from the applicant as it may consider necessary and may get any inquiry made for verification of the genuineness of the activity of the applicant. (10) The Central Government may, under sub-section (1) of section 35, issue the notification to be published in the Official Gazette granting approval to the association or university or college or other institution or for reasons to be recorded in writing reject the application. (11) The Central Government may withdraw the approval granted under clause (ii) or clause (iii) of sub-section (1) of Section 35 if it is satisfied that the research association or university or college or other institution has ceased its activities or its activities are not genuine or are not being carried out in accordance with all or any of the conditions under rule 5D or rule 5E. (12) No order treat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecommendation. In this case such an opportunity was granted by the letter dated 26th February, 2013 but the writ petitioner refused to avail the opportunity on the ground that the member (IT) CBDT was not authorised to hear. The writ petitioner failed to realize that the matter shall thereafter be placed before the Ministry of Finance for passing an order either accepting or rejecting the prayer for approval. For that purpose the Ministry is entitled to make further enquiry into the matter. Provision for such further enquiry is there in Rule 9 and 10 quoted above. In case the Ministry allows the prayer, there is no reason why any further hearing is to be given. In case it is inclined to reject the prayer, it has to disclose reasons but before it does that it is required to give an opportunity of hearing to the applicant. Therefore, hearing before the member (IT) CBDT and the CIT proposed by the letter dated 26th February, 2013 was not the end of the road. The writ petitioner by refusing to appear at personal hearing and by refusing to satisfy the CIT as regards its eligibility prevented the statutory authority from performing its job. In the circumstances there was no occasion f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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