Reasonable opportunity of hearing required before rejecting 12AB registration and cancelling provisional registration; matter remanded for fresh consideration.

Rejection of registration under section 12AB and cancellation of provisional registration were set aside because the assessee had complied with notices, yet the application was declined without affording a further reasonable opportunity to explain the material and furnish documents. The Tribunal held that the matter should be reconsidered afresh in the interest of justice, with the assessee given a proper hearing before any adverse decision is taken. The case was remanded for fresh consideration on the registration application and related cancellation issue.

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Issues: Whether the rejection of the application for registration under section 12AB and the cancellation of provisional registration should be set aside and the matter remanded for fresh consideration after granting reasonable opportunity of hearing.

Analysis: The assessee had complied with the notices issued during the registration proceedings, but the application was rejected without granting any further opportunity when the authority remained dissatisfied with the explanation and supporting material. The matter was not examined on merits by the Tribunal; instead, the Tribunal considered the grievance that further opportunity ought to have been afforded before adverse action was taken. In the interest of justice, the impugned order was set aside and the application was directed to be reconsidered afresh after providing reasonable opportunity of hearing and allowing the assessee to furnish the requisite documents and information.

Conclusion: The rejection and cancellation orders were set aside and the matter was remanded for fresh decision after reasonable opportunity of hearing. The appeal was thus partly allowed.

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