2018 (10) TMI 734 - AT - Income Tax

Charitable activity - rejecting the application of the appellant trust u/s 12A - evidences furnished by the assessee to prove the genuineness of the activities of the assessee trust - Held that - We have considered the submissions of both the parties and perused the material available on the record. In the present case it is noticed that learned CIT(E) on the one hand admitted that the assessee filed the documents on 17.10.2014 and 24.10.2017 relating to the case on the other hand he stated that the assessee had not filed the requisite details to establish the genuineness of the activities. It is also an admitted fact that learned CIT(E) dismissed the application of the assessee by passing the exparte order. Keeping in view the principles of natural justice i.e. nobody should be condemned unheared as per the maxim Audi Alteram Partem , deem it appropriate to remit this case back to the file of the learned CIT(E) to be decided afresh in accordance with law after providing due and reasonable opportunity of being heard to the assessee. Appeal of the assessee is allowed for statistical purposes.

Summary

Issues:
1. Rejection of application for registration under section 12A of the Income Tax Act, 1961.
2. Failure to consider material and evidence by the CIT(E) in proving the genuineness of the trust's activities.

Issue 1: Rejection of application for registration under section 12A of the Income Tax Act, 1961:
The appeal was filed against the CIT(E)'s order rejecting the application of the appellant trust under section 12A of the Income Tax Act, 1961. The CIT(E) dismissed the application stating that the genuineness of the activities could not be established as the requisite details were not filed by the assessee. The CIT(E) observed that despite documents being filed by the assessee, nobody appeared during the hearing dates. The learned counsel for the assessee argued that all relevant documents were submitted before the CIT(E) and that the ex parte order was passed without providing a reasonable opportunity for the assessee to be heard. The Tribunal noted the contradictory stand taken by the CIT(E) and emphasized the principles of natural justice, remitting the case back to the CIT(E) for a fresh decision after providing a fair hearing to the assessee.

Issue 2: Failure to consider material and evidence in proving the genuineness of the trust's activities:
The main grievance of the assessee in the appeal was the failure of the CIT(E) to consider the material and evidence submitted by the assessee to establish the genuineness of the trust's activities. The Tribunal noted that while the CIT(E) acknowledged the filing of documents by the assessee, he also stated that the requisite details were not provided to establish the genuineness of the activities. The Tribunal highlighted the importance of providing a fair opportunity to be heard, as per the principle of natural justice "Audi Alteram Partem." Consequently, the Tribunal allowed the appeal for statistical purposes, emphasizing the need for a fresh decision by the CIT(E) after affording the assessee a fair hearing.

In conclusion, the Tribunal's judgment focused on the procedural irregularities in the CIT(E)'s decision-making process, highlighting the importance of providing a fair opportunity for the assessee to present their case and establish the genuineness of the trust's activities.