CIT(E) Order passed without hearing Assessee during COVID-19 violates Principal of Natural Justice

Madhavi Raksha Sankalpa Vs CIT (Exemptions) (ITAT Mumbai)

ITAT noticed that the CIT(Exemptions) has passed the order on 31.08.2020 during the pandemic period without hearing the appellant. It is against the principles of natural justice. A proper and reasonable opportunity is liable to be given to the appellant in accordance with law, therefore, in the said circumstances, ITAT set aside the order dated 31.08.2020 in question and restore the matter of controversy before the CIT(Exemptions), Mumbai to decide the matter of controversy afresh by giving an opportunity of being heard to the assessee in accordance with law.

FULL TEXT OF THE ORDER OF ITAT MUMBAI

The assessee has filed the present appeal against the order dated 31.08.2020 passed by the Commissioner of Income Tax (Exemptions)-Mumbai [hereinafter referred to as the “CIT(Exemptions)”] in which the application u/s 12AA(1)(b)(ii) of the Income Tax Act, 1961 has been ordered to be dismissed.

2. The assessee has raised the following grounds: –

“1. NATURAL JUSTICE

1.1 The Learned Commissioner of Income – tax (Exemption), Mumbai (“Ld. CIT (E) erred in rejecting the application for registration under section 12A of the Appellant ex – parte.

1.2 While doing so. the Ld. CIT (E) erred in:

(i) Not giving fair, reasonable and proper opportunity of being heard to the Appellant; and

(ii) Not appreciating that the Appellant was prevented by reasons beyond its control for not being able to attend the hearing or furnish the required details / documents before due dates; and

(iii) Not appreciating that the Appellant was prevented by Lockdown caused by COVID- 19 pandemic for not being able to attend the hearing or furnish the required detail / documents before due dates; and

(iv) Not appreciating that the time limit for passing order under section 12AA was extended to 31 March 2021 vide Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 read with CBDT Notification No. 35/2020 dated 24^th June 2020 and as such, there was no urgency to pass the impugned order on 31″ August 2020 without affording proper opportunity to the Appellant

1.3 It is submitted that in the facts and the circumstances of the case, and in law, no such action was called for.”

3. We have heard the argument advanced by the Ld. Representative of the parties and perused the record. An application of condonation of delay has been filed. The CIT(Exemptions) has passed the order on 31.08.2020. The present appeal has been filed on 15.03.2021. The reason for filing the appeal delayed mentioned on account of Covid-19 Pandemic. The Hon’ble Supreme Court in suo-moto Writ Petition No. 3 of 2020 extended the time lines for filing an appeals under all Acts. The matter is required to be adjudicated merits. Pandemic period is still going. The finding plausible reason to file the appeal delayed, we condone the delay. We also noticed that the CIT(Exemptions) has passed the order on 31.08.2020 during the pandemic period without hearing the appellant. It is against the principles of natural justice. A proper and reasonable opportunity is liable to be given to the appellant in accordance with law, therefore, in the said circumstances, we set aside the order dated 31.08.2020 in question and restore the matter of controversy before the CIT(Exemptions), Mumbai to decide the matter of controversy afresh by giving an opportunity of being heard to the assessee in accordance with law. Accordingly, the present appeal is hereby allowed for statistical purposes.

4. In the result, the appeal filed by the assessee is hereby allowed for statistical purposes.

Order pronounced in the open court on 28/01/2022