2021 (4) TMI 212 - AT - Income Tax

Application for registration filed u/s 12AA rejcted ex-parte - notices as mentioned in the appellate order were never served on the assessee in physical form but only on the portal which is not accessed by the society members - notices as mentioned in the appellate order were never served on the assessee in physical form but only on the portal which is not accessed by the society members - HELD THAT - As pointed out by appellant, the Trust could not respond to the queries raised by the ld. CIT(E) for the reason that it did not access the portal. Sh. Ram Gopal Bansal, President of the Trust has stated in his affidavit that no adjournment was sought by the applicant/Trust. The copy of e-proceedings on record corroborates the version of the applicant/appellant. There is no material on record to infer that the assessee has deliberately omitted to access on line portal of the department. Hence, we are of the considered view that the assessee should get an opportunity to present its case before the ld. CIT(E) in the interest of justice. We therefore, set aside the ex-prate order passed by the ld. CIT(E) and send back the same to the ld. CIT(E) for deciding the application of the applicant Trust afresh on merits, after affording a reasonable opportunity of being heard to the appellant. Further, we direct the appellant/applicant to cooperate with the ld. CIT(E) and not to seek adjournments on frivolous grounds. Appeal filed by the appellant/applicant is allowed for statistical purposes.

Summary

Issues:
Challenge to the rejection of application for registration under section 12AA of the Income Tax Act.
Violation of principles of natural justice in passing an ex-parte order.
Electronic issuance of notice and failure to comply.
Opportunity to present the case before the Commissioner of Income Tax (Exemptions).

Analysis:
The appellant challenged the rejection of their application for registration under section 12AA of the Income Tax Act, contending that the action was arbitrary and unjustified. They argued that the Commissioner of Income Tax (Exemptions) erred in rejecting the application ex-parte without serving physical notices, which led to a lack of representation. The appellant also disputed the observation that they had requested an adjournment, emphasizing the need for a fair hearing and the right to add or amend grounds of appeal.

The Tribunal considered the appellant's submission that the ex-parte order violated the principles of natural justice by not affording a reasonable opportunity to be heard. The appellant's counsel highlighted that the notice was issued through an online portal inaccessible to the Trust members, preventing them from responding adequately. The President of the Trust affirmed in an affidavit that no adjournment was sought, supported by e-proceedings. In contrast, the departmental representative argued in favor of the electronically issued notice, stating that the rejection was justified due to non-compliance.

After hearing both parties, the Tribunal acknowledged the Trust's inability to access the online portal and respond to the Commissioner's queries. Considering the lack of deliberate omission to access the portal, the Tribunal set aside the ex-parte order and remitted the matter to the Commissioner for a fresh decision after affording a reasonable opportunity to be heard. The Tribunal directed the Trust to cooperate and avoid seeking adjournments on frivolous grounds, emphasizing the importance of a fair hearing and compliance with procedural requirements.

In conclusion, the Tribunal allowed the appeal for statistical purposes, emphasizing the significance of adherence to principles of natural justice and the right to a fair hearing in administrative proceedings.