Tribunal grants fair hearing, remands case for fresh adjudication under Income-tax Act

The Tribunal set aside the order of the Ld. CIT(A) rejecting the exemption claimed under section 11 of the Income-tax Act, 1961, due to lack of opportunity for the assessee to be heard. The case was remanded back to the Ld. CIT(A) for fresh adjudication after affording the assessee a proper opportunity to present its case. The appeal by the assessee was treated as allowed for statistical purposes. This emphasizes the significance of ensuring parties have a fair chance to present their case and upholding principles of natural justice in legal proceedings.

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Issues:
Challenge to rejection of exemption claimed under section 11 of the Income-tax Act, 1961 due to non-furnishing of audit report in Form No. 10B by the assessee. Lack of opportunity for the assessee to be heard before the Ld. CIT(A) leading to an ex-parte order.

Analysis:
The appeal was filed by the assessee challenging the order passed by the Ld. CIT(A) confirming the rejection of the exemption claimed under section 11 of the Income-tax Act, 1961. The assessee, a Charitable Trust registered under section 12A of the Act, filed its return of income for the relevant assessment year declaring Nil income within the extended due date but omitted to upload the audit report in Form No. 10B. Consequently, the A.O. rejected the exemption claim under section 11. The Ld. A.R. argued that the Ld. CIT(A) passed the order without granting a proper opportunity of being heard to the assessee, as the order was dated 16.9.2020 but digitally signed on 21.9.2020, and the assessee's written submissions were filed before the order was dispatched. Additionally, a discrepancy was noted regarding the due date for filing Form No. 10B as mentioned by the Ld. CIT(A). The Ld. A.R. highlighted that the assessee uploaded Form No. 10B later and filed a petition for condonation of the delay, which was pending before CBDT, requesting a chance to present its case before the Ld. CIT(A.

The Tribunal observed that the Ld. CIT(A) passed an ex-parte order without providing the assessee with a fair opportunity to be heard, despite the assessee seeking an adjournment initially and subsequently submitting written arguments. In the interest of natural justice, the Tribunal decided that the assessee should be given the opportunity to present its case before the Ld. CIT(A) to ensure justice is served. Therefore, the Tribunal set aside the entire order of the Ld. CIT(A) and remanded all issues back to the Ld. CIT(A) for fresh adjudication after affording the assessee a proper opportunity to be heard. Consequently, the appeal filed by the assessee was treated as allowed for statistical purposes.

This judgment highlights the importance of providing parties with a fair chance to present their case and the adherence to principles of natural justice in legal proceedings.

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