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Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR.
Before: DR. M. L. MEENA & SH. ANIKESH BANERJEE
ORDER Per: Anikesh Banerjee, JM: The instant appeal of the assessee was filed against the order of the ld.
Commissioner of Income Tax (Exemptions), Chandigarh, {in brevity ‘the CIT (E)’} order passed u/s 12A(1)(ac) (iii) of the Income-tax Act, 1961 (in brevity the Act).
2. The assessee has taken the following grounds:
“1. That the Learned Commissioner of Income Tax (Exemptions) was not justified to pass an ex-parte order rejecting the registration u/s 12AB.
That the Learned Commissioner of Income Tax (Exemptions) was not justified to refuse the registration on the ground that no reply was filed by the appellant in response to the communications issued by his office through online portal whereas the appellant never received any such communication through either email or a message.”
Brief fact of the case is that the assessee is a Charitable Trust and filed application in Form No. 10AB u/s 12A (1) (ac) (iii) of the Act for registration u/s 12AA of the Act. The ld. CIT(E) issued the notice. The adjournment was taken and finally none was present on behalf of the assessee. The ld. CIT(E) rejected the assessee’s application, and the application of registration was cancelled u/s 12AB of the Act. Aggrieved assessee filed an appeal before us for judicious consideration.
The ld. AR first pointed out that the ld. CIT(E) has passed the order on ex parte without considering the submission of the assessee. The ld. AR placed that the assessee got the provisional registration u/s 12AB of the Act. The application was placed in Form No. 10AD for filing registration but without allowing the reasonable opportunity to the assessee. The application was rejected. The ld. AR further claimed that the assessee had not received any notice or any communication from the ld. CIT(E) during the hearing proceeding.
The ld. DR vehemently argued and placed that the order was passed ex parte due to nonappearance from the end of the assessee. The ld. DR relied on the order of the ld. CIT(E), the relevant para 5 of the order is reproduced as below:
“5. In view of the above discussions, the present application of the assessee filed in Form 10AB u/s 12A(1)(ac)(iii) of the Act is disposed of as being deficient in factual evidences in the absence of the requisite submissions of the assessee in response to the letter issued by this office. This is despite the granting of at least three opportunities as above. It is pertinent to mention here that it is mandated by the provisions of Section 12A(1)(ac)(iii) of the Act that where the trust or institution has been provisionally registered u/s 12AB it has to make an application for registration u/s 12AB within six months of commencement of activities. In the absence of any submission from the applicant it is not possible to ascertain the objects and activities carried out by the applicant. Accordingly the application filed by the applicant for registration u/s 12AB of the Act is hereby rejected, which rejection and consequent lack of registration will apply from this F.Y. 2022-23 onwards and also supersedes any registration granted u/s 12AB or 12AA of the Act by any authority at any earlier time.”
We heard the rival submission and considered the documents available in the record. The assessee claimed that no notice was served for fixation of hearing. The ld. DR was unable to bring any evidence that the notice was duly served to the assessee for hearing. The assessee agitated that no sufficient opportunity was allowed for hearing.
6.1. The service of a valid notice is a condition precedent to the assumption of jurisdiction by the ld. CIT(E). The existence of a valid notice is, therefore, a jurisdictional fact. The question, therefore, is not to be looked at from the perspective that the decision to issue notice was by an authority competent in that behalf under the Act and, therefore, submitting to his jurisdiction without objection, the inference of waiver arises. The question being one of jurisdiction, to be more specific the condition precedent to the assumption of jurisdiction what has to be seen is that the person that purported to exercise the jurisdiction vested in him had in fact exercised that jurisdiction with issue of notice and service of notice. The said test has not been fully completed. We should not turn a blind eye about the service of notice. Both the ld. CIT(E) and ld. DR are remained quite in this issue. But in exercise of jurisdiction service is one of the components for department which is not transparent here.
6.2. Considering the fact, the principle of natural justice is violated during hearing proceeding. Since the matter is restored to the file of ld. CIT(E) for meritorious adjudication by passing a speaking order. We are not expressing any views on the merits of the case so as to limit the set aside proceeding before the ld. CIT(E). The observations herein made by us in remanding the matter back to the file of ld. CIT(E) will not impair or injure the case of the Revenue nor will it cause any prejudice to the defence/explanation of the assessee. Accordingly, we set aside the impugned order of the ld. CIT(E) and restore the matter back to the file of the ld. CIT(E) to decide afresh after affording reasonable opportunity of being heard to the assessee and the assessee is directed to be diligent in the set aside proceedings.
In the result, the appeal of the assessee bearing is allowed for statistical purpose.
Order pronounced in the open court on 23.08.2023