Case Law Details
Sant Kabir Mahasabha Vs CIT (ITAT Chandigarh)
In a recent development, the Income Tax Appellate Tribunal (ITAT) Chandigarh addressed a crucial aspect of income tax proceedings – the proper service of notice to taxpayers. The case, Sant Kabir Mahasabha vs. CIT, involves the rejection of the assessee’s application for registration under Section 12AB of the Income Tax Act, 1961 (the Act) by the Commissioner of Income Tax (Exemptions), Chandigarh (ld.CIT(E)). This article provides a detailed analysis of ITAT Chandigarh’s order, emphasizing the significance of accurate notice service in income tax matters.
Detailed Analysis
1. Background: The appellant, Sant Kabir Mahasabha, challenged the action of the ld.CIT(E) in rejecting its application for registration under Section 12AB of the Act for the assessment year 2022-23.
2. Ex-Parte Order: The appellant’s counsel highlighted that the ld.CIT(E) had passed an ex-parte order, summarily rejecting the application without affording the appellant an opportunity to present its case. It was pointed out that no notice of the hearing date was served on the appellant, either through physical means or electronic communication. Allegedly, the notice of the hearing date was uploaded on the Income Tax Portal, and the appellant was unaware of this development. No formal notice of the hearing date was issued to the appellant.
3. Revenue’s Response: The ld. DR representing the Revenue could not dispute the factual details presented by the appellant.
4. ITAT’s Verdict: The ITAT Chandigarh held that merely uploading information about the date of a hearing on the Income Tax Portal does not constitute effective service of notice, as required by Section 282 of the Income Tax Act. Consequently, the impugned order of the ld.CIT(E) was deemed legally unsustainable. The ITAT set aside the order and directed the ld.CIT(E) to reevaluate the appellant’s appeal, providing proper and adequate opportunities for the appellant to present its case. The ld.CIT(E) was instructed to serve the notice of the hearing through physical means and electronic mode to ensure effective communication.
5. Conclusion: ITAT Chandigarh’s ruling emphasizes the critical importance of ensuring that taxpayers receive proper notification and opportunities for hearings in income tax matters. The case underscores that the mere uploading of notices on the Income Tax Portal does not suffice as valid service. Tax authorities must adhere to the provisions of Section 282 of the Income Tax Act, which outlines the requirements for effective notice service. This decision reaffirms the principle of natural justice, which mandates that taxpayers be given a fair opportunity to present their cases during income tax proceedings.
In summary, the ITAT’s order serves as a reminder to tax authorities that proper and legally valid notice service is an essential aspect of the due process in income tax matters, and non-compliance with such requirements can render orders legally unsustainable.
FULL TEXT OF THE ORDER OF ITAT CHANDIGARH
The present appeal has been preferred by the assessee against the order passed by the ld. Commissioner of Income Tax (Exemptions), Chandigarh [hereinafter referred to as ‘ld.CI T(E)’] dated 01.12.2022 pertaining to 2022-23 assessment year.
2. The assessee in this appeal has contested the action of the ld.CI T(E) in rejecting the application of the assessee for registration u/s 12 AB of the Income Tax Act, 1961 (in short ‘the Act’).
3. At the outset, the ld. Counsel for the assessee has invited our attention to the impugned order of the ld.CIT(E) to submit that the same is an ex-parte order. He has submitted that the ld.CIT(E) has summarily rejected the application of the assessee without giving any opportunity of hearing to the assessee to present its case. He has submitted that no notice of date of hearing was served by the ld.CIT(E), either through physical mode or through e-mail etc. That the notice of date of hearing was allegedly uploaded on Income Tax Portal and the assessee was not aware of uploading of any such notice regarding date of hearing. That no service of notice was ever affected on the assessee.
4. The ld. DR could not rebut the aforesaid factual position.
5. We have heard the rival contentions. Merely uploading of information about the date of hearing on the Income Tax Portal is not an effective service of notice as per the provisions of Section 282 of the Income Tax Act. The impugned order of the ld.CIT(E) is, therefore, not sustainable in the eyes of law. The same is hereby set aside with a direction to the ld.CIT(E) to decide the appeal of the assessee afresh after giving proper and adequate opportunity to the assessee to present its case. The ld. CIT (E) will serve notice of hearing through physical mode as well as through electronic mode upon the assessee.
6. The appeal of the assessee is treated as allowed for statistical purposes.
Order pronounced in the Open Court on 23rd August, 2023.
