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2025 (3) TMI 1411 - AT - Income TaxRejection of application for grant of final registration U/s 12A(1)(ac)(iii) and 80G(5)(iii) for want of proper submission - HELD THAT - The principle of audi alteram partem which envisage that parties be are eligible for fair hearing or that no one should be condemned unheard. Thus considering the prayer of assessee that he undertook on behalf of assessee-trust to be more vigilant in future in making compliance this appeal of assessee is restored back to the file of ld. CIT(E) to pass the order afresh in accordance with law. Needless to direct that before deciding the application afresh the ld. CIT(E) shall grant reasonable and fair opportunity of hearing to the assessee - Appeal of assessee is allowed for statistical purposes.
ISSUES PRESENTED and CONSIDERED
The primary legal issues considered in this judgment were:
ISSUE-WISE DETAILED ANALYSIS Rejection of Applications for Registration and Approval The relevant legal framework involves Sections 12A and 80G of the Income Tax Act, which pertain to the registration of trusts and approval of funds for charitable purposes. The CIT(E) rejected the applications for registration and approval due to non-compliance by the assessees, specifically the failure to provide requisite information within the stipulated timeframe. The Court noted that the principle of audi alteram partem, which ensures fair hearing, was not adhered to, as the assessees were not given adequate time to comply with the requirements. The Court emphasized the importance of providing a fair opportunity to the parties involved, which was lacking in this case. The Court's interpretation leaned towards ensuring procedural fairness, highlighting that the rejection was premature due to insufficient opportunity for the assessees to present their case. Principle of Natural Justice The Court considered whether the CIT(E) violated the principles of natural justice by not granting adequate opportunity for the assessees to be heard. The Court recognized that the CIT(E) provided a very short period for compliance, which was insufficient for the assessees to respond adequately. The Court found that the lack of adequate opportunity constituted a breach of natural justice principles, which require that parties be given a fair chance to present their case before a decision is made. The Court concluded that the matter should be remanded to the CIT(E) to allow the assessees a fair opportunity to present the necessary information and evidence to support their applications. Qualification for Registration under Section 12A(1)(ac)(iii) The assessees argued that they met the qualifications for registration under Section 12A(1)(ac)(iii). The Court did not delve deeply into the substantive qualifications but focused on the procedural aspect, emphasizing the need for a fair hearing and opportunity to present evidence. The Court directed that the applications be reconsidered by the CIT(E) with a fresh opportunity for the assessees to submit the requisite information and prove their eligibility for registration. SIGNIFICANT HOLDINGS The Court held that the appeals should be restored to the file of the CIT(E) for a fresh decision, ensuring that the principles of natural justice are upheld. The Court stated: "The principle of audi alteram partem which envisage that parties be are eligible for fair hearing or that no one should be condemned unheard." This holding underscores the Court's commitment to procedural fairness and the importance of providing parties with a fair opportunity to present their case. The core principles established include the necessity of adhering to natural justice principles in administrative proceedings and ensuring that parties have adequate time and opportunity to comply with procedural requirements. Final determinations on each issue were that the appeals were allowed for statistical purposes, with the direction that the CIT(E) reconsider the applications with a fair hearing process.
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