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TMI Blog2019 (5) TMI 300X X X X Extracts X X X X X X X X Extracts X X X X ..... liminary hearing, with consent of learned Advocates for both parties, the same are taken up for final disposal. 3. Appellant No.1 is an Educational Trust. Appellant Nos. 2 to 5 are the Trustees. On 16.12.2015, the Income Tax Department conducted a raid in the premises belonging to the Trust and also the residences of some of the Trustees and seized several documents. Thereafter, a notice dated 28.11.2017 was issued calling upon the Trust to show cause as to why approval granted under Section 10(23C)(vi) of the Income Tax Act, 1961, (for brevity 'the Act') should not be withdrawn for violating the provisions of the Act. The Trust gave its reply through Chartered Accountant on 11.12.2017. The authorities passed an order dated 21.12.2017 with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the IT Act, 1961 - In the case of M/s. Navodaya Education Trust, Raichur - regarding I am directed to communicate the following: 2. A search and Seizure action u/s.132 of the Income-tax Act, 1961 was conducted in your case on 16.12.2015. During the course of the said search action certain books of account and other documents were found and seized, The said documents have been verified and it is seen from the said documents that you have allowed considerable part of the amount collected as Donation by the trust to be used by the trustees for their personal purposes like personal investments/expenditure, cash paid for obtaining accommodation entries, purchase of personal assets etc, in contravention to the provisions of Section 10(23C) (v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt out that proposed action is not warranted in the given case, even if the defaults/ breaches complained of are not satisfactorily explained. When it comes to black listing, this requirement becomes all the more imperative, having regard to the fact that it is harshest possible action. 20. The High Court has simply stated that the purpose of show cause notice is primarily to enable the noticee to meet the grounds on which the action is proposed against him. No doubt, the High Court is justified to this extent. However, it is equally important to mention as to what would be the consequence if the noticee does not satisfactorily meet the grounds on which an action is proposed. To put it otherwise, we are of the opinion that in order to fulfi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court and this Court, we are of the considered view, that the respondent-revenue has not given reasonable opportunity to the appellants to put forth their case effectively. In the circumstances, the notice dated 28.11.2017 is unsustainable in law. 11. Resultantly, these appeals merit consideration and hence the following: ORDER i) Appeals are allowed. ii) The notice dated 28.11.2017 (Annexure-F) and the order dated 21.12.2017 (Annexure-A) issued by the Income Tax Department, as also the impugned order dated 05.02.2018 passed by the Hon'ble Single Judge in W.P.Nos.3468-72 / 2018 are set aside. iii) Liberty is reserved to the Respondent - Revenue to issue a fresh show-cause notice to the appellants within four weeks from the date of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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