2017 (3) TMI 1374 - AT - Income Tax

Registration u/s 12A denied - non affording due opportunity of hearing on the basis of sole ground that the trust has not been registered under M.P. Registration Act, 1951 - Held that - The appellant was not provided due opportunity of hearing to place its case which resulted into dismissal of application. We are satisfied that the appellant was not provided due opportunity of hearing during the proceedings. Therefore, the order has been passed violating the principles of natural justice and thus the same is not sustainable in law. In view of our above-noted factual position, we find it appropriate to set aside the impugned order and restore the issue to the file of the learned CIT-II, Indore, for fresh adjudication, after providing due opportunity of hearing to the assessee and without being prejudiced from the earlier order passed by him. - Decided in favour of assessee for statistical purposes

Summary

Issues:
1. Condonation of delay in filing the appeal.
2. Merits of the case regarding the dismissal of the application for registration u/s 12A of the Income Tax Act.

Condonation of Delay:
The appeal was filed against an order denying registration u/s 12AA(1)(b)(i) of the Income Tax Act, 1961. The delay in filing the appeal was attributed to the non-receipt of the order by the assessee. The assessee contended that the delay was due to bonafide reasons as they were not informed about the order being passed. The assessee filed an application for obtaining the certified copy of the order immediately upon learning about it and filed the appeal within the prescribed time period. The Revenue argued that the delay should not be condoned as there was no proof of service of notice on the assessee. The Tribunal, after considering the submissions, observed that the delay was due to bonafide reasons beyond the control of the assessee. The delay was condoned, and the appeal was admitted for hearing on merits.

Merits of the Case:
Regarding the dismissal of the application for registration u/s 12A of the Act, the assessee argued that the order was passed without affording a due opportunity of hearing. The assessee had submitted the copy of registration under the M.P. Trust Registration Act, 1951, which was not considered by the CIT-II, Indore. The Tribunal noted that the appellant was not provided with a proper opportunity of hearing, leading to a violation of the principles of natural justice. The order was deemed unsustainable in law due to this violation. Consequently, the Tribunal set aside the impugned order and directed the issue to be restored to the file of the CIT-II, Indore, for fresh adjudication, ensuring a fair opportunity of hearing for the assessee. The appeal was allowed for statistical purposes with this direction.

In conclusion, the Tribunal addressed the issues of condonation of delay in filing the appeal and the merits of the case regarding the dismissal of the application for registration u/s 12A of the Income Tax Act. The decision highlighted the importance of providing a fair opportunity of hearing to the assessee and ensuring compliance with the principles of natural justice in such matters.