Section 12AA hearing requirement governs refusal of registration; denial without hearing on the decisive ground is unsustainable and remitted.

Refusal of registration under section 12AA requires the competent authority to satisfy itself about the trust's objects and genuineness and to give the applicant a reasonable opportunity of being heard on the grounds proposed for refusal. Processing notices or clarifications through another officer of the same office does not by itself invalidate the proceedings, as official acts carry a presumption of regularity. However, where the assessee is not specifically heard on the ground that ultimately forms the basis of refusal, the order is procedurally unsustainable and the matter must be remitted for fresh consideration without any finding on entitlement.

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Issues: Whether denial of registration under section 12AA without a reasonable opportunity of being heard by the competent authority was valid, and whether proceedings conducted through an officer of the same office could invalidate the registration process.

Analysis: Refusal of registration under section 12AA can be made only after the Commissioner is satisfied about the objects and genuineness of the trust and only after giving the applicant a reasonable opportunity of being heard. The hearing must be before the competent authority itself and cannot be treated as delegated merely because notices, requisitions, or clarifications were processed by another officer from the same office. At the same time, official proceedings conducted in the ordinary course are entitled to the presumption of regularity, and the subordinate officer's role did not by itself vitiate the process. However, the impugned order was found to be procedurally deficient because the assessee was not specifically heard on the ground that ultimately formed part of the refusal.

Conclusion: The refusal of registration was unsustainable for breach of the mandatory hearing requirement and the matter was required to be restored to the competent authority for fresh disposal in accordance with law.

Final Conclusion: The appeal succeeded only to the extent of setting aside the refusal order and remitting the registration application for reconsideration without any finding on the merits of entitlement.

Ratio Decidendi: An order refusing registration under section 12AA cannot stand unless the competent authority itself affords the applicant a reasonable opportunity of being heard on the grounds of proposed refusal; failure to do so constitutes a curable procedural defect warranting remand.

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