Natural justice in exemption registration matters leads to remand when ex parte rejection follows ineffective notice and no hearing.

Ex parte rejection of applications for registration and approval under the Income-tax Act was set aside where the record showed that the assessee had not received the notices and was therefore denied an effective opportunity of hearing. The Tribunal held that the absence of reasonable notice justified interference and, as both sides agreed, remitted the applications under Sections 12A(1)(ac)(iii), 12AB and 80G(5) to the Commissioner (Exemptions) for fresh adjudication. It expressly left the merits open and made no finding on the underlying eligibility.

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Issues: Whether the ex parte rejection of the applications for registration and approval under the Income-tax Act, 1961, without effective notice and opportunity of hearing, warranted setting aside and remand for fresh consideration.

Analysis: The assessee's applications under Section 12A(1)(ac)(iii), Section 12AB and Section 80G(5) were rejected ex parte. The record indicated that the notices were not received by the assessee, and therefore compliance could not be made. In these circumstances, the absence of a reasonable opportunity of hearing justified interference, and both sides accepted that the matters should go back for fresh decision. The Tribunal also recorded that it was not expressing any view on the merits so that the proceedings before the authority below would remain open.

Conclusion: The impugned order was set aside and the matters were remitted to the Commissioner (Exemptions) for fresh adjudication after granting reasonable opportunity of hearing.

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