2024 (6) TMI 414 - AT - Income Tax

Rejection of application for registration u/s 12A(1)(ac)(iii) - Non effective service of notice as per the provisions of Section 282 - denial of natural justice -- Assessee failed to furnish the relevant documents/details online through e-proceedings on e-filing portal alongwith supporting documents/evidences - as submitted notices were uploaded on the e-portal of the assessee but the assessee states that he did not receive any notice of hearing and assessee was unaware about the issuance of letters/notices for hearing as the same was not served HELD THAT - Merely uploading of information about the date of hearing on the Income Tax Portal is not an effective service of notice as per the provisions of Section 282 of the Income Tax Act. The matter now stands covered by the decision of Munjal BSU Centre of Innovation and Entrepreneurship, Ludhiana 2024 (3) TMI 479 - PUNJAB HARYANA HIGH COURT as held that the provisions of Section 282(1) of the Income Tax Act and Rule 127(1) of the Income Tax Rules, 1962, envisage that it is essential that before any action is taken, a communication of the notice must be in terms of these provisions; that these provisions do not make mention of communication to be deemed by placing the notice on the e-portal of the Department; that an pragmatic view has always to be adopted in these circumstances; that an individual or a company is not expected to keep the e-portal of the Department open all the times so as to have knowledge of what the Department is supposed to be doing with regard to the submissions of forms, etc.; and that the principles of natural justice are inherent in the Income Tax provisions and the same are required to be necessarily followed. Thus in the interest of justice, the file is restored to the file of ld. CIT(E) to decide the matter afresh in accordance with law after giving reasonable opportunity of being heard to the assessee. Appeals of the assessee are allowed for statistical purposes.

Summary

Issues:
1. Delay in filing the appeal before the Tribunal.
2. Rejection of application for registration under Section 12A(1)(ac)(iii) of the Income Tax Act, 1961.
3. Violation of principles of natural justice in rejecting the application.
4. Lack of proper notice of hearing served to the appellant.
5. Remand of the matter for de novo hearing.

Analysis:

Issue 1: Delay in filing the appeal before the Tribunal
The assessee filed an application for condonation of delay, citing reasons for the delay in filing the appeal. The Tribunal, after considering the submissions of both parties, condoned the delay and admitted the appeal for adjudication.

Issue 2: Rejection of application for registration under Section 12A(1)(ac)(iii)
The assessee's application for registration under Section 12A(1)(ac)(iii) was rejected by the Commissioner of Income Tax (Exemptions) due to non-compliance with providing necessary documents and information. The rejection was challenged by the assessee before the Tribunal.

Issue 3: Violation of principles of natural justice in rejecting the application
The grounds raised by the assessee included contentions that the rejection of the application was in complete breach of principles of natural justice. The Tribunal noted the arguments presented by both parties and found merit in the contention that proper notice of hearing was not served to the appellant.

Issue 4: Lack of proper notice of hearing served to the appellant
The Tribunal observed that although notices were uploaded on the e-portal, there was no evidence to prove that the appellant received proper notice of the hearing. Citing a relevant High Court decision, the Tribunal emphasized the importance of communication of notices in accordance with the provisions of the Income Tax Act.

Issue 5: Remand of the matter for de novo hearing
Considering the lack of proper notice and violation of principles of natural justice, the Tribunal remanded the matter back to the Commissioner of Income Tax (Exemptions) for a fresh decision in accordance with the law. The Tribunal directed the assessee to cooperate in the fresh proceedings before the Commissioner.

In conclusion, the Tribunal allowed the appeals of the assessee for statistical purposes, remanding both matters for a fresh decision by the Commissioner of Income Tax (Exemptions) while emphasizing the importance of adhering to principles of natural justice and proper communication of notices.