Case Law Details
Masani Meldi Sadhana Foundation Vs CIT (ITAT Ahmedabad)
In the case Masani Meldi Sadhana Foundation vs. CIT (Exemption), the Income Tax Appellate Tribunal (ITAT) Ahmedabad addressed an appeal challenging the ex-parte decision of the Commissioner of Income Tax (Exemption) [CIT(E)], which denied the foundation’s application for registration under Section 12AB of the Income Tax Act. The foundation argued that the CIT(E) violated principles of natural justice by passing the order without a fair hearing or consideration of essential documentation. The foundation’s grounds for appeal included allegations that the ex-parte decision disregarded its intent to seek registration and failed to allow the opportunity to present the required documentation to support its case.
In response, the ITAT found merit in the foundation’s claims, agreeing that due process was not observed by the CIT(E). As a result, the ITAT remanded the case back to the CIT(E) for a fresh hearing, directing that the foundation be granted an opportunity to provide the necessary documentation and that all issues be examined de novo. The CIT(E) was instructed to ensure a fair and thorough review in compliance with natural justice principles.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Exemption), (in short “Ld. CIT(E)”), Ahmedabad vide order dated 26.02.2024.
2. The Assessee has taken the following grounds of appeal:-
“Ground No. I – Principle of natural Justice – Ex-parte order:
1. On the facts and in the circumstance of the case and in law, the CIT(E) erred in passing the ex-parte order in gross violation of principles of natural justice, without considering the fact that when the application is made- this indicates that the Appellant is interested in obtaining registration, and, the application is not made only for the sake of making the same,
2. The Appellant prays that the order passed by the CIT (E) be treated as passed in gross violation of principles of natural justice and as such the same be treated as illegal, bad in taw, null and void.
Without prejudice to above:
3. In alternative to above, the order of the CIT(E) be set aside to his Hie and the Appellant be granted opportunity to represent its case before the CIT(E).
Without prejudice to above:
Ground No. II: Rejection of Registration:
1. On the facts and in the circumstances of the case and in law, the CIT(E) erred in refusing to grant registration under section 12AB of the Act.
2. The Appellant prays that the order of rejection be deleted and the Appellant be granted registration under section 12AB of the Act.
Ground No. III: General
The Appellant craves leave to add to, alter and/ or amend all or any of the foregoing grounds of appeal.”
3. At the outset, we find that the order passed by Ld. CIT(E) is an ex-parte order. The Ld. Counsel for the assessee submitted that given an opportunity, due compliance would be made before the Ld. CIT(E), as the required documents could not be filed by the assessee.
4. The Ld. D.R. has no objection, if the matter is remitted back to the file of Ld. CIT(E) by way of de-novo appellate proceedings.
5. In this view of the mater, the case of the assessee is remanded back to the file of the Ld. CIT(E) to examine the entire issue de-novo, after providing reasonable opportunity of hearing to the assessee.
6. In the result, the appeal of the assessee is allowed for statistical purposes.
This Order is pronounced in the Open Court on 22/10/2024
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