This article explores the detailed proceedings and judgment of the Income Tax Appellate Tribunal (ITAT) Delhi in the case of ITA No. 1852/DEL/2020, where the Human Welfare Foundation appealed against the denial of registration and exemption by the Commissioner of Income-tax (Exemption), New Delhi.
The Human Welfare Foundation, a New Delhi-based organization, filed applications electronically on November 22, 2019, seeking registration under section 12AA and exemption under section 80G of the Income-tax Act, 1961. The applications were submitted in Form No. 10A. The case was filed on November 12, 2020, and the tribunal’s order was pronounced on February 8, 2023.
The case was heard by the Delhi Bench ‘H’ of the Income Tax Appellate Tribunal, with Shri Anil Chaturvedi, Accountant Member, and Shri N.K. Choudhry, Judicial Member, presiding. The tribunal’s final order addressed the procedural and substantive issues surrounding the denial of registration and exemption to the appellant.
Upon receiving the application, the Commissioner issued a letter on January 7, 2020, requesting additional documents to support the registration claim. The appellant submitted a partial reply on January 22, 2020. Another opportunity to furnish complete details was given on June 17, 2020, but the appellant’s response was incomplete. A final reply was received on September 14, 2020.
The Commissioner, upon reviewing the submissions, noted that the appellant failed to provide sufficient evidence for the claimed activities. The expenditures related to health check-ups, books, stationery, and food distribution were not substantiated with proper bills and vouchers. Additionally, discrepancies in the financial records further led to doubts about the genuineness of the activities. Consequently, the Commissioner rejected the applications for registration under section 12AA and exemption under section 80G.
Despite multiple attempts, the notice for the hearing on February 2, 2023, returned undelivered. Given the absence of alternative contact details, the tribunal proceeded with an ex-parte decision, relying solely on the available records and submissions.
The tribunal observed that the appellant was not given a reasonable opportunity to present their case, particularly during the nationwide lockdown due to COVID-19. The final opportunity for submission coincided with a period of severe restrictions, impacting the appellant’s ability to comply fully.
The tribunal noted that the Commissioner failed to adequately examine the objects of the appellant organization. The primary onus to establish the case lies with the appellant, but the Commissioner is required to provide a fair opportunity for the appellant to present their case.
In light of these procedural lapses, the tribunal decided to remand the case back to the Commissioner for a fresh decision. The Commissioner is directed to provide a reasonable opportunity of being heard to the appellant and to thoroughly examine the objects and activities of the organization.
This judgment highlights the importance of due process and fair opportunity in the assessment of applications for registration and exemption under the Income-tax Act. The tribunal emphasized that procedural fairness must be upheld, especially during extraordinary circumstances such as the COVID-19 lockdown.
The ITAT Delhi’s decision in ITA No. 1852/DEL/2020 underscores the necessity for tax authorities to provide adequate opportunities for applicants to present their cases. The remand for fresh consideration ensures that the Human Welfare Foundation will receive a fair assessment of their eligibility for registration and exemption. This case serves as a critical reference for similar disputes and reinforces the principles of procedural justice in tax proceedings.
Order Pronounced in the Open Court on February 8, 2023
Signed by:
Shri Anil Chaturvedi, Accountant Member
Shri N.K. Choudhry, Judicial Member
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