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<h1>Tribunal Orders Fair Hearing on Tax Exemption Case; Remands Government Grant Taxability Issue for Review.</h1> <h3>Pune Metropolitan Region Development Authority Versus The Dy. Commissioner of Income Tax, Exemptions Circle, Pune</h3> Pune Metropolitan Region Development Authority Versus The Dy. Commissioner of Income Tax, Exemptions Circle, Pune - TMI Issues:1. Exemption claim under section 10(46) of the Income Tax Act, 1961.2. Taxability of grants received from the state government.3. Denial of proper opportunity of being heard.4. Rejection of re-hearing request.5. Condonation of delay.Exemption Claim under Section 10(46):The appeals involved the issue of the assessee's claim for exemption under section 10(46) of the Income Tax Act, 1961. The tribunal noted that the assessee was not a 'notified' authority under section 10(46)(c) of the Act, leading to the Assessing Officer and the National Faceless Appeal Centre (NFAC) rejecting the claim. The tribunal observed that the assessee had filed writ petitions before the high court on this matter, but as the tribunal was not a party to those proceedings and there was no stay order against it, the tribunal upheld the lower authorities' decisions to decline the exemption claim due to lack of statutory notification.Taxability of Grants Received:Another key issue was the rejection of the assessee's claim that grants received from the state government were not taxable income. It was highlighted that the NFAC's orders were passed ex-parte and did not consider this specific ground. The tribunal found that the NFAC had discussed judicial precedents related to a different exemption provision instead of addressing the taxability of the grants. Consequently, the tribunal decided to remand this issue back to the NFAC for proper adjudication, emphasizing that the assessee must present all necessary facts for a fair hearing. The tribunal allowed the appeals partially on this ground.Denial of Proper Opportunity and Rejection of Re-Hearing Request:The tribunal also addressed the assessee's grievances regarding the denial of a proper opportunity to be heard and the rejection of a re-hearing request under section 129 of the Income Tax Act. It was asserted that the assessing officer's failure to provide a personal hearing despite a specific request and the refusal to grant a re-hearing were against the principles of natural justice and equity. The tribunal acknowledged these concerns and highlighted the importance of following fair procedures in tax assessments.Condonation of Delay:Lastly, the tribunal condoned a minor delay in the proceedings based on the assessee's explanations, citing the principle that technical aspects should not hinder the cause of substantial justice. The tribunal allowed the appeals partly for statistical purposes, emphasizing the need for proper adjudication and fair hearings in tax matters.---