2022 (1) TMI 1411 - AT - Income Tax

Rejection of rectification application filed by the assessee u/s 154 - submission filed by the assessee on the online portal - AR submitted that both the Revenue Authorities have not given any opportunity to the assessee for proper hearing and principles of natural justice were violated - HELD THAT - We have heard both the parties and perused all the relevant materials available on record. It is pertinent to note that at any stage of the assessment proceedings as well as appellate proceedings i.e. before the CIT(A) no opportunity was granted to the assessee for personal hearing to comment on the merit of the case. Therefore it will be appropriate to remand back the entire issue to the file of the AO for proper adjudication of the issues on merit and thereafter pass appropriate order as per due process of law. Needless to say the assessee be given opportunity of hearing by following principles of natural justice. Appeal of the assessee is partly allowed for statistical purposes.

Summary

Issues:
1. Rejection of rectification application filed by the assessee under section 154 of the Income Tax Act, 1961.
2. Violation of principles of natural justice in passing the order by the CIT(A).

Analysis:
1. The appellant, a Trust registered under Section 12A of the Income Tax Act, 1961, filed an appeal against the order passed by the CIT(A)-9, Ahmedabad for the Assessment Year 2014-15. The Trust, primarily engaged in education, inadvertently made an error in its return of income by incorrectly stating its registration status under Section 12A/12AA. This mistake led to the withdrawal of exemption and a demand of Rs.13,46,070/-. Despite filing rectification applications on the e-filing portal, both were rejected by the CPC. Subsequently, the right of rectification was transferred to the Jurisdictional Assessing Officer, leading to the appellant's appeal before the CIT(A).

2. The CIT(A) dismissed the appellant's appeal, citing the decision of the Hon'ble High Court of Delhi in the case of Multiplan India Limited, 38 ITD 320. The appellant contended that they were not granted a proper hearing by the Revenue Authorities, alleging a violation of natural justice principles. The Assessing Officer and the CIT(A) did not provide an opportunity for a personal hearing to the appellant throughout the proceedings. Acknowledging this lapse, the ITAT decided to remand the issue back to the Assessing Officer for a thorough review and proper adjudication, emphasizing the importance of granting the appellant a hearing in accordance with the principles of natural justice. The ITAT partially allowed the appeal for statistical purposes, ensuring due process of law was followed.

In conclusion, the ITAT's judgment addressed the rejection of the rectification application and the violation of natural justice principles in the proceedings. By remanding the issue back to the Assessing Officer for a fair review and emphasizing the appellant's right to a hearing, the ITAT upheld the importance of due process and fairness in tax assessments.