Registration denial overturned due to improper notice service via e-portal violating natural justice principles under Section 282

ITAT Chandigarh allowed the assessee's appeal against rejection of registration under Section 12A(1)(ac)(iii). The tribunal held that merely uploading hearing notices on the Income Tax e-portal does not constitute effective service under Section 282 of the Income Tax Act, constituting denial of natural justice. Following the precedent in Munjal BSU Centre case, the tribunal ruled that proper communication of notices must comply with Section 282(1) and Rule 127(1) provisions. The matter was restored to CIT(E) for fresh consideration with proper opportunity of hearing.

---

---

Issues:
1. Delay in filing the appeal before the Tribunal.
2. Rejection of application for registration under Section 12A(1)(ac)(iii) of the Income Tax Act, 1961.
3. Violation of principles of natural justice in rejecting the application.
4. Lack of proper notice of hearing served to the appellant.
5. Remand of the matter for de novo hearing.

Analysis:

Issue 1: Delay in filing the appeal before the Tribunal
The assessee filed an application for condonation of delay, citing reasons for the delay in filing the appeal. The Tribunal, after considering the submissions of both parties, condoned the delay and admitted the appeal for adjudication.

Issue 2: Rejection of application for registration under Section 12A(1)(ac)(iii)
The assessee's application for registration under Section 12A(1)(ac)(iii) was rejected by the Commissioner of Income Tax (Exemptions) due to non-compliance with providing necessary documents and information. The rejection was challenged by the assessee before the Tribunal.

Issue 3: Violation of principles of natural justice in rejecting the application
The grounds raised by the assessee included contentions that the rejection of the application was in complete breach of principles of natural justice. The Tribunal noted the arguments presented by both parties and found merit in the contention that proper notice of hearing was not served to the appellant.

Issue 4: Lack of proper notice of hearing served to the appellant
The Tribunal observed that although notices were uploaded on the e-portal, there was no evidence to prove that the appellant received proper notice of the hearing. Citing a relevant High Court decision, the Tribunal emphasized the importance of communication of notices in accordance with the provisions of the Income Tax Act.

Issue 5: Remand of the matter for de novo hearing
Considering the lack of proper notice and violation of principles of natural justice, the Tribunal remanded the matter back to the Commissioner of Income Tax (Exemptions) for a fresh decision in accordance with the law. The Tribunal directed the assessee to cooperate in the fresh proceedings before the Commissioner.

In conclusion, the Tribunal allowed the appeals of the assessee for statistical purposes, remanding both matters for a fresh decision by the Commissioner of Income Tax (Exemptions) while emphasizing the importance of adhering to principles of natural justice and proper communication of notices.

---