2017 (6) TMI 443 - AT - Income Tax

Rejecting registration u/s. 12AA and approval u/s. 80G - Form 10A is not submitted in the format as prescribed in the Rules and application u/s. 80G has been rejected because the institution is not registered u/s. 12AA - Held that - Form 10A was filed by the assessee trust along with the copy of PAN of the trust. Merely because the assessee trust has omitted to mention the Permanent Account No. of the trust in column no. 2 of Form 10A, the Ld. CIT(E) concluded that application is void ab initio without giving an opportunity to the assessee to rectify the mistake is fragile for violation of natural justice. We note that when an action which has got civil consequences is taken or any action adversely affecting the rights of the assessee is taken an opportunity of hearing has to be given to the assessee. Here, in this case, merely because the assessee has not entered the PAN details in column no. 2 of Form 10A, the application has been dismissed, which action of the Ld. CIT(E) smacks of arbitrariness and there is naked violation of natural justice. Thus we remit the application back to the file of Ld. CIT(E) to give an opportunity to the assessee to rectify the mistake, if any, and direct Ld. CIT(E) to pass orders on its applications u/s. 12A as well as 80G of the Act on merits - Decided in favour of assessee for statistical purposes.

Summary

Issues:
Appeal against rejection of registration u/s. 12AA and approval u/s. 80G of the Income-tax Act, 1961.

Analysis:
The appeals were filed against the common order of the Ld. CIT(E) rejecting registration u/s. 12AA and approval u/s. 80G. The Tribunal disposed of both appeals together. The assessee trust applied for registration on 18.11.2015 and submitted the necessary documents. The Ld. CIT(E) rejected the application citing non-compliance with Form 10A format. The main contention was the omission of PAN details in Form 10A. The assessee argued a violation of natural justice due to rejection without an opportunity to rectify the mistake. The Ld. CIT(E) rejected the applications solely based on technical grounds without considering the merits.

The Tribunal noted that the rejection solely for not mentioning PAN in Form 10A without providing a chance to rectify was arbitrary and a violation of natural justice. It emphasized that when actions impact an assessee's rights, a fair hearing must be granted. The Tribunal set aside the Ld. CIT(E)'s order and directed reconsideration after allowing the assessee to rectify any errors. The decision highlighted the importance of procedural fairness and the need for a proper opportunity for rectification before outright rejection.

Therefore, the Tribunal allowed the appeals for statistical purposes, emphasizing the significance of due process and fair treatment in such matters. The order was pronounced on 01.06.2017, emphasizing the importance of adherence to procedural norms and principles of natural justice in administrative decisions related to tax matters.