2019 (4) TMI 260 - AT - Income Tax

Grant of registration u/s 12A rejected - failure to produce material to substantiate its claim that society s aims/objects and terms of memorandum are of the charitable nature and the same are being followed - adequate opportunity of being heard - principle of natural justice. - HELD THAT - The representative of the appellant society could not properly represent the case of the society and did not file the relevant documents. For misrepresentation of the representative of the appellant society, the appellant society should not suffer, therefore, it will be appropriate in the interest of justice to remand back this matter to the file of the Commissioner of Income Tax, Faridabad for taking on record the relevant documents which were called by the Commissioner of Income Tax and then pass appropriate order as regards whether to grant registration u/s 12AA(1)(b)(ii) or not. Needless to say, the appellant society be given opportunity of hearing by following principles of natural justice. Hence, appeal of the appellant society is partly allowed for statistical purpose.

Summary

Issues:
1. Rejection of application for registration under section 12A of the Income Tax Act, 1961.
2. Alleged violation of principles of natural justice by the Commissioner of Income Tax.
3. Assessment of charitable nature of objectives and genuineness of activities.
4. Failure to produce material to substantiate charitable aims/objects and genuineness of activities.
5. Request for remand back to the Commissioner of Income Tax for proper representation and consideration of relevant documents.

Analysis:
1. The appeal was filed against the order of the Commissioner of Income Tax rejecting the application for registration under section 12A of the Income Tax Act, 1961. The appellant contended that the order was bad in law and on facts, and the CIT erred in rejecting the application without proper opportunity for being heard.

2. The appellant raised concerns about the alleged violation of principles of natural justice by the CIT in rejecting the application without giving a proper and adequate opportunity for being heard. The CIT was criticized for not confining himself to assessing the charitable nature of objectives and genuineness of activities only.

3. The CIT assessed the charitable nature of the society's objectives and the genuineness of its activities. The CIT held that the society failed to produce material to substantiate its claim regarding the charitable nature of its aims/objects and the genuineness of its activities.

4. The appellant argued that due to a misunderstanding, the Chartered Accountant representing the society could not properly present the case and file relevant documents before the CIT. The appellant requested an opportunity to file the proper documents and for a fresh consideration by the CIT.

5. The Tribunal, after hearing both parties, noted the misrepresentation by the society's representative and decided to remand the matter back to the CIT for considering the relevant documents and passing an appropriate order regarding the registration under section 12AA(1)(b)(ii) of the Act. The Tribunal emphasized the importance of following principles of natural justice and granting the appellant society a fair opportunity of being heard.

In conclusion, the appeal of the appellant society was partly allowed for statistical purposes, and the matter was remanded back to the Commissioner of Income Tax for a fresh consideration in light of the proper representation and submission of relevant documents.