2021 (10) TMI 958 - AT - Income Tax

Grant of approval u/s. 10(23C)(vi) denied - Denial of principles of natural justice - no reply was filed by the assessee by ignoring the fact that information could not be filed by previous counsel of the assessee due to Covid-19 effect - assessee's grievance is that it was not given sufficient opportunity being heard by the CIT(Exp) in accordance with the principles of natural justice - HELD THAT - The contention of the ld. AR that details required by the CIT were available with the assessee but the same could not be furnished due to lack of sufficient opportunity granted to the assessee sounds logical, reasonable and justified. Considering the ld. AR contention that the assessee was prevented by sufficient cause primarily in filing the appeal and secondly in making submission before the lad CIT(Exp) in absence of sufficient opportunity of being heard to produce the necessary documents as per principles of natural justice as above, we find it deem fit to restore the matter back to the file of the CIT(Exp) to examine the issue of granting of approval u/s. 10(23C)(vi) of the act, afresh after taking into consideration the material evidence and after affording sufficient opportunity of being heard to the appellant assessee, as per principles of natural justice. Accordingly, the case is restored to the CIT, for afresh consideration and examination of the application of assessee u/s. 10(23C)(vi) - Assessee appeal treated allowed for statistical purposes

Summary

Issues:
1. Condonation of delay in filing appeal.
2. Rejection of application for grant of approval u/s. 10(23C)(vi) of the Act.
3. Violation of principles of natural justice.

Condonation of Delay:
The appeal was filed with a delay of 34 days due to the appellant's unawareness of the order passed u/s. 10(23C)(vi) of the Act. The delay was condoned by the Tribunal, considering the factual aspects and the short period of delay. The Tribunal granted condonation to ensure natural justice and allow the appellant to present its case on merits against the ex parte order.

Rejection of Application for Approval:
The appellant contended that the rejection of the application by the Commissioner of Income Tax (Exemption) was erroneous. The appellant's previous counsel failed to file a reply due to the Covid-19 situation, leading to the rejection. The Tribunal acknowledged the hardships faced during the lockdown and Covid-19 but noted the lapse in filing the reply. However, the Tribunal found merit in the argument that the appellant was not given sufficient opportunity to be heard by the Commissioner. Therefore, the matter was remanded back for a fresh consideration, emphasizing the principles of natural justice.

Violation of Principles of Natural Justice:
The appellant argued that there was a lack of sufficient opportunity to present necessary details before the Commissioner. The Tribunal agreed that the appellant was prevented from furnishing required details due to inadequate opportunity. It was deemed fit to restore the matter to the Commissioner for re-examination, ensuring that the appellant is granted sufficient opportunity to be heard and present relevant evidence. The Tribunal directed the Commissioner to verify the charitable nature of the appellant's activities and ensure cooperation from the appellant in the proceedings.

In conclusion, the appeal was treated as allowed for statistical purposes, and the case was restored to the Commissioner for a fresh examination with specific observations to uphold the principles of natural justice.