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2021 (1) TMI 284 - AT - Income TaxExemption u/s 11 Denied - non-furnishing of audit report in form No. 10B - HELD THAT - It is the case of the Ld. A.R. that the assessee sought adjournment before Ld. CIT(A) when the appeal was posted for hearing for the first time on 4.9.2020. Thereafter, the assessee was not given an opportunity of being heard by Ld CIT(A). It is submitted that the assessee filed written submissions before Ld. CIT(A) on 30.9.2020. However, by that time, the Ld. CIT(A) had already passed the order. Accordingly, we notice that the order passed by Ld. CIT(A), in effect, is an ex-parte order, without giving to the assessee opportunity of being heard. Accordingly, in the interest of natural justice, we are of the view that the assessee should be provided with an opportunity to present its case before Ld. CIT(A). Accordingly, we set aside the entire order passed by the Ld. CIT(A) and restore all the issues to his file for adjudicating them afresh. Appeal filed by the assessee is treated as allowed for statistical purposes.
Issues:
Challenge to rejection of exemption claimed under section 11 of the Income-tax Act, 1961 due to non-furnishing of audit report in Form No. 10B by the assessee. Lack of opportunity for the assessee to be heard before the Ld. CIT(A) leading to an ex-parte order. Analysis: The appeal was filed by the assessee challenging the order passed by the Ld. CIT(A) confirming the rejection of the exemption claimed under section 11 of the Income-tax Act, 1961. The assessee, a Charitable Trust registered under section 12A of the Act, filed its return of income for the relevant assessment year declaring Nil income within the extended due date but omitted to upload the audit report in Form No. 10B. Consequently, the A.O. rejected the exemption claim under section 11. The Ld. A.R. argued that the Ld. CIT(A) passed the order without granting a proper opportunity of being heard to the assessee, as the order was dated 16.9.2020 but digitally signed on 21.9.2020, and the assessee's written submissions were filed before the order was dispatched. Additionally, a discrepancy was noted regarding the due date for filing Form No. 10B as mentioned by the Ld. CIT(A). The Ld. A.R. highlighted that the assessee uploaded Form No. 10B later and filed a petition for condonation of the delay, which was pending before CBDT, requesting a chance to present its case before the Ld. CIT(A. The Tribunal observed that the Ld. CIT(A) passed an ex-parte order without providing the assessee with a fair opportunity to be heard, despite the assessee seeking an adjournment initially and subsequently submitting written arguments. In the interest of natural justice, the Tribunal decided that the assessee should be given the opportunity to present its case before the Ld. CIT(A) to ensure justice is served. Therefore, the Tribunal set aside the entire order of the Ld. CIT(A) and remanded all issues back to the Ld. CIT(A) for fresh adjudication after affording the assessee a proper opportunity to be heard. Consequently, the appeal filed by the assessee was treated as allowed for statistical purposes. This judgment highlights the importance of providing parties with a fair chance to present their case and the adherence to principles of natural justice in legal proceedings.
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