2019 (4) TMI 409 - AT - Income Tax

Grant of registration u/s. 12A - no proper opportunity to being heard to assessee - SCN received belatedly - assessee not satisfied the Commissioner about the conditions required for grant of registration - application for grant of registration rejected - HELD THAT - Show cause notice dated 11.09.2017 issued by the CIT(E) was received by the assessee only on 12.12.2017. Our attention was drawn to the date of receipt seal of the assessee in which the receipt of show cause notice issued by the CIT(E) dated 11.09.2017 is recorded as 12.12.2017. In the given facts and circumstances, we are satisfied that the assessee did not have proper opportunity of being heard before the CIT(E). We, therefore, set aside the order of CIT(E) and direct the CIT(E) to examine afresh the question of grant of registration u/s. 12A to the assessee, after affording proper opportunity of being heard. - Appeal of assessee allowed for statistical purposes.

Summary

Issues:
1. Rejection of application for grant of registration u/s. 12A of the Income-tax Act, 1961 by the CIT(Exemptions).
2. Appeal filed by the assessee against the order of the CIT(Exemptions).
3. Lack of proper opportunity of being heard before the CIT(Exemptions).
4. Direction by the Tribunal to the CIT(Exemptions) to examine afresh the grant of registration u/s. 12A to the assessee.

The appeal before the Appellate Tribunal ITAT Bangalore arose from the CIT(Exemptions) rejecting the application for grant of registration u/s. 12A of the Income-tax Act, 1961. The CIT(E) dismissed the application as the assessee failed to provide the necessary details within the specified timeframe. The assessee, a charitable institution, then approached the Tribunal challenging the CIT(E)'s decision. During the hearing, it was revealed that the show cause notice issued by the CIT(E) was received by the assessee after a significant delay, depriving the assessee of a fair opportunity to respond. Consequently, the Tribunal found that the assessee was not adequately heard by the CIT(E) and set aside the order, instructing the CIT(E) to reevaluate the grant of registration u/s. 12A after ensuring a proper opportunity for the assessee to present their case.

The Tribunal's decision to allow the appeal for statistical purposes was based on the fundamental principle of natural justice, emphasizing the importance of providing a fair hearing to parties involved in legal proceedings. By recognizing the lack of proper opportunity for the assessee to present their case before the CIT(E), the Tribunal exercised its authority to ensure procedural fairness and uphold the principles of due process. The direction to reexamine the grant of registration u/s. 12A underscored the Tribunal's commitment to ensuring that decisions impacting the rights and obligations of parties are made following a thorough and unbiased evaluation of all relevant factors. This case serves as a reminder of the significance of procedural fairness in administrative and legal processes, highlighting the need for transparent and equitable decision-making to uphold the integrity of the legal system.