ITAT Specifies - What Giving Fair Hearing Opportunity Practically Means?

If you're an entity seeking registration under Section 12 of the Income Tax Act, it's crucial to understand your rights during the process.

On 20th July 2023, the Income Tax Appellate Tribunal (ITAT) showed the practical meaning of "Giving a fair chance to present your case."

In a situation where an assessee, Kalyan Riverside Charitable Foundation, who applied for registration on 31st March 2022, was given two opportunities to provide additional information on 19th July and 18th September 2022 but missed both, the Commissioner of Income Tax (Exemptions) denied the registration.

However, on appeal the ITAT mentioned that -

"We have given thoughtful consideration to the peculiar facts and

circumstances of the case. No doubt the Ld. Commissioner before deciding

the application filed by the Appellant, though given appropriate opportunity

to the appellant to substantiate its case, however failed to decide the same in the absence of supported material and/ or non-production and non-

explaining of documents and activities carried out by the appellant"

And then held -

Hence for the just decision of case and for the ends of substantial justice, we are remanding the instant case to the file of the Ld. Commissioner for decision afresh, suffice to say for affording reasonable opportunity being heard to the Appellant.

Simply said, honorable ITAT held that

Every assessee deserves a thorough examination of their case, even if they miss scheduled hearings.

This underscores the importance of procedural fairness in tax matters.

This also serves as a reminder that every entity has the right to a comprehensive evaluation of their application.

You can access the original judgement by clicking me

Court Name : ITAT Mumbai

Parties : Kalyan Riverside Charitabl Foundation vs CIT Exemption Pune

Judgement ref : I.T .A. No. 1055/Mum/2023 & I.T.A. No . 1056/Mum/2023

Decision Date : 20 July 2023

IN THE INCOME TAX APPELLATE TRIBUNAL

“H” BENCH, MUMBAI

BEFORE SHRI BR BASKARAN, AM

&

SHRI N. K. CHOUDHRY, JM

आयकरअपीलसं./ I.T .A. No. 1055/Mum/2023 &

आयकरअपीलसं./I.T.A. No . 1056/Mum/2023

(निर्धारणवर्ा / Assessment Year: 2022-23)

Kalyan Riverside Charitable Foundation

Rowhouse No.8, UN Godrej Hill.

Khadakpada Kalyan (W),

Maharashtra- 421301

VersuS

CIT Exemption Pune

Room No. 322, 3rd Floor,

Income Tax Office,

PMT Building, Shankar

Sheth Road, Pune

Maharashtra- 411037

PAN No . AADTK3684P

(अपीलधर्थी/Appellant) : (प्रत्यर्थी / Respondent)

Appellant by : None

Respondent by : Smt. Madhumalti Ghosh, Ld. CIT DR

Date o f Hearing : 18.07.2023

Date o f Pronouncement : 20.07.2023

आदेश / O R D E R

Per N K Choudhry, Judicial Member:

These appeals have been preferred by the Assessee/Appellant herein

against the orders even dated 29th Sep,2022 and 30th Sep, 2022 impugned

herein, passed by the Ld. Commissioner of Income Tax exemption, (in short

‘Ld. Commissioner’),u/s. 12A and 80G of the Act for the AY: 2022-2023.

2. None appeared on behalf of the Appellant inspite of sending notice for

the date of hearing on 18.07.2023, hence considering peculiar facts and

circumstances, we are deciding these appeals as ex-parte.

3. First we will decide I.T.A . No . 1055/Mum/2023 which

pertains to challenge o f the order re jecting the application for

registration u/s 12 o f the Act.

4. At the outset, we observe that the Appellant by filling online

application on dated 31st March, 2022 in form no. 10AB sought registration

under section 12A (1)(AC)(iii) of the Act. The same was taken into

consideration by the Ld. Commissioner and vide notice issued through ITBA

portal on 19th July, 2022, requested the Appellant to upload certain other

information/clarification by 3rd Aug, 2022 which remains un-complied with.

Thereafter, vide notice dated 18th Sep, 2022 another opportunity was given

to the Appellant, whereby the Appellant was requested to submit its

compliance by 23rd Sep, 2022. In the said notice, it was also specifically

informed by the Ld. Commissioner that in the event of failure to comply by

due date, the matter will be decided on the basis of material available on

record. The said notice also remained un-complied with.

As the Appellant has not given any specific details, as to what actual

activities being carried out by it and no credible evidence is submitted in

support of its claim, though, specific opportunity of being heard was given,

but failed to avail the same, the Ld. Commissioner therefore by observing

“that as the Appellant has not uploaded the requisite details despite giving opportunities therefore, it is not possible to ascertain, as to whether the activities are in line with the objects of the trust/institution”, failed to draw any satisfactory conclusion about genuineness of the activities of the Appellant and ultimately rejected the aforesaid application of the Appellant.

5. We have given thoughtful consideration to the peculiar facts and

circumstances of the case. No doubt the Ld. Commissioner before deciding

the application filed by the Appellant, though given appropriate opportunity

to the appellant to substantiate its case, however failed to decide the same in the absence of supported material and/ or non-production and nonexplaining of documents and activities carried out by the appellant. Hence for the just decision of case and for the ends of substantial justice, we are remanding the instant case to the file of the Ld. Commissioner for decision afresh, suffice to say for affording reasonable opportunity being heard to the Appellant.

The Appellant is also directed to join the appellant proceedings and to

file the relevant documents before the ld. Commissioner and in case of

default the Appellant shall not be entitled for any leniency. Hence

Resultantly I .T.A . No. 1055/Mum/2023 is allowed .

6. Coming to I.T .A. No. 1056/Mum/2023 , which pertains to

challenge to the denial o f registration u/s 80G o f the Act.

Registration u/s 80G is depend upon the grant o f registration u/s

12 o f the Act , hence this case is also remanded to the file o f ld .

Commissioner for decisions afresh, with same terms and

conditions as se t out I .T.A . No. 1055/Mum/2023 .

7. In the result , bo th the appeals filed by the Appellant stands

allowed for the statistical proposes .

Orders pronounced in the open court on 20.07.2023.

Sd/- Sd/-

(BR. Baskaran) (N. K. Choudhry)

Accountant Member Judicial Member