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Facts
The Appellant Trust filed an application for registration under Section 12A of the Income Tax Act, 1961. The Commissioner of Income Tax (Exemption) rejected the application, stating it had become infructuous and the applicant failed to justify its claim in response to a notice.
Held
The tribunal held that the appellant was not granted a reasonable opportunity of being heard before the rejection of its application. The CIT(E) issued a notice with a very short time for the applicant to respond, violating the principles of natural justice.
Key Issues
Whether the appellant was provided with a reasonable opportunity of being heard before the rejection of its application for registration under Section 12A of the Income Tax Act, 1961.
Sections Cited
Section 12A of the Income Tax Act, 1961, Section 12AB of the Income Tax Act, 1961
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Income Tax Appellate Tribunal, JAIPUR BENCHES,”B”AIPUR
vkns'k@ORDER PER: NARINDER KUMAR, JUDICIAL MEMBER.
Appellant Trust filed an application under sub-clause(ii) of clause (ac) of sub-section(1) of section 12A of the Income Tax Act, 1961 (hereinafter referred to as “the Act”), seeking its registration under the Act. On 27.02.2024, vide impugned order by Learned Commissioner of Income Tax (Exemption), Jaipur [hereinafter referred to as “CIT(E”) ], said application has been rejected, same having become infructuous.
Learned CIT(E) observed that the applicant trust was already not regularly registered under clause (i) or (iii) of section 12AB of the Act, and Padma Shanti Trust also that the applicant had failed to justify its claim in response to notice dated 05.01.2024 issued for 12.01.2024.
Hence, this appeal.
Arguments heard. File perused.
Learned AR for the appellant has raised only one ground i.e. that Learned CIT(E) did not afford reasonable opportunity to the applicant of being heard. Therefore, he has urged that the impugned order be set aside, and matter be remanded to Learned CIT(E) for decision afresh. On behalf of the department, it has not been disputed that only one opportunity was granted by Learned CIT(A) by way of only one notice, before the application was rejected.
As is available from the impugned order, before rejection of the application filed by the trust, notice dated 05.01.2024 was issued by the office of CIT(E). Vide this notice, applicant trust was called upon to justify its claim for registration as prayed in the application. Said notice was issued for 12.01.2024 thereby, apparently, granting very short time to the applicant to take steps. It is not that the application was disposed of soon thereafter. It was rejected on 27.02.2024. We observe that to comply with the principles of natural justice, reasonable opportunity should have been Padma Shanti Trust granted by Learned CIT(E) to the applicant before disposing of the application.
Since reasonable opportunity of being heard was not granted to the applicant trust, of being heard, we find merit in the contention raised on behalf of the appellant. Conclusion 8. For the foregoing discussion, we find that the impugned order deserves to be set aside, and matter needs to be remanded to Learned CIT(E) for decision afresh, after providing reasonable opportunity to the applicant-appellant, of being heard. Result 9. Consequently, this appeal is allowed, and while setting aside the impugned order, the matter is remanded to Learned CIT(E), Jaipur for decision of the application afresh, in accordance with law, after providing reasonable opportunity to the appellant-applicant, of being heard. Order pronounced in the open court on 10/07/2024. Sd/- Sd/- ¼jkBkSM+ deys'k t;UrHkkbZ ½ ¼ujsUnz dqekj½ (RATHOD KAMLESH JAYANTBHAI) (NARINDER KUMAR) ys[kk lnL; @Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 10/07/2024 3