2021 (5) TMI 521 - AT - Income Tax

Registration u/s 12AA rejected - As argued CIT(E) passed the impugned order ex parte without commenting on the objects of the assessee which were charitable in nature - HELD THAT - In the present case, it is noticed that the ld. CIT(E) passed the impugned order ex parte. He simply stated that opportunity was afforded to the assessee on 14/08/2019 and the matter was fixed for hearing on 22/08/2019. As not brought on record as to whether the notice for hearing was served upon the assessee or the aforesaid date was initiated to the assessee. It is well settled that nobody should be condemned unheard as per the maxim audi alterm partem . We therefore, by keeping in view the principles of natural justice, deem it appropriate to set aside the impugned order and restore the matter back to the file of the ld. CIT(E) to be adjudicated afresh in accordance with law after providing due and reasonable opportunity of hearing to the assessee. Appeal of the assessee is allowed for statistical purposes.

Summary

Issues:
Appeal against ex parte order by CIT(E) without opportunity of being heard.

Analysis:
1. The appeal was filed by the Assessee against an ex parte order passed by the ld. CIT(E) without affording an opportunity of being heard. The grounds raised in the appeal indicated that the only grievance of the assessee was related to the lack of opportunity provided by the ld. CIT(E) before passing the order.

2. The facts of the case revealed that the assessee had filed Form No. 10A for registration under Section 12AA of the Income Tax Act, 1961. However, the ld. CIT(E) rejected the application without proper hearing. The ld. CIT(E) issued a questionnaire and provided multiple opportunities for a personal hearing, but the assessee did not attend or request adjournments on the specified dates.

3. The ld. CIT(E) concluded that due to the noncompliance and unresponsive attitude of the assessee, it was difficult to verify the objects and genuineness of the activities of the company. Consequently, the application for registration under Section 12AA was rejected by the ld. CIT(E), leading to the appeal by the assessee.

4. During the appeal, the counsel for the assessee argued that no notice for hearing was served, and the ld. CIT(E) passed the order ex parte without considering the charitable nature of the assessee's objects. On the other hand, the ld. CIT-DR supported the decision of the ld. CIT(E) citing the non-cooperative behavior of the assessee.

5. The Appellate Tribunal considered the submissions of both parties and observed that the impugned order was passed ex parte without clear evidence of serving a notice for the hearing upon the assessee. Upholding the principles of natural justice, the Tribunal set aside the order and directed the matter to be adjudicated afresh by the ld. CIT(E) after providing a reasonable opportunity of hearing to the assessee.

6. As a result, the appeal of the assessee was allowed for statistical purposes, emphasizing the importance of providing a fair opportunity to be heard before making decisions in accordance with the law.

This detailed analysis highlights the procedural irregularities in the original order, the arguments presented by both parties, and the Tribunal's decision to uphold principles of natural justice by setting aside the ex parte order and granting a fresh opportunity for the assessee to be heard.