Charitable registration denied ex parte: remand for fresh hearing upheld, with costs imposed for a misleading affidavit.

Ex parte rejection of charitable registration under section 12AB and approval under section 80G(5) was not sustained where the Tribunal considered that a further opportunity was needed to ensure fairness in the decision-making process, and the applications were remitted for fresh consideration. The email delivery record showed service of notice, so the denial of service was incorrect, but the matter was still restored so the assessee could explain the material on record. A misleading affidavit was treated seriously and attracted costs, though it did not bar reconsideration of the registration and approval requests.

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Issues: (i) Whether the ex parte rejection of registration under section 12AB and approval under section 80G(5) of the Income-tax Act, 1961 could be sustained when the assessee was not afforded a proper opportunity of hearing; (ii) Whether the filing of a false affidavit before the Tribunal warranted adverse consequences while the applications were sent back for fresh consideration.

Issue (i): Whether the ex parte rejection of registration under section 12AB and approval under section 80G(5) of the Income-tax Act, 1961 could be sustained when the assessee was not afforded a proper opportunity of hearing.

Analysis: The notices sent by the department were shown to have been delivered to the assessee's email address, and the assertion of non-service was found to be incorrect. At the same time, the controversy concerned final registration of the trust, where compliance and opportunity to explain the material on record were necessary. To preserve fairness in the decision-making process, the rejection orders were not allowed to stand without giving one further opportunity to the assessee.

Conclusion: The ex parte rejection orders were set aside and the matter was remitted for fresh consideration after granting one opportunity to the assessee.

Issue (ii): Whether the filing of a false affidavit before the Tribunal warranted adverse consequences while the applications were sent back for fresh consideration.

Analysis: The affidavit denying service of notice was found to be misleading in view of the email delivery record. The Tribunal noted the legal seriousness of false statements and supported the need for vigilance in affidavits filed before authorities. Considering the subsequent unconditional apology and the circumstances of the case, a monetary cost was imposed instead of denying the assessee a fresh hearing altogether.

Conclusion: Adverse consequences were attracted in the form of cost, but the registration applications were still restored for reconsideration.

Final Conclusion: The assessee obtained relief by way of remand for reconsideration of the registration and approval applications, while also being burdened with costs for the misleading affidavit.

Ratio Decidendi: Where final rejection of charitable registration is made ex parte, the matter should be restored for fresh consideration if a further opportunity is to satisfy natural justice, though filing a misleading affidavit may justify imposition of costs.

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