On November 30, 2022, the Income Tax Appellate Tribunal, Delhi Bench ‘C’, presided by Shri Anil Chaturvedi, Accountant Member, and Shri Anubhav Sharma, Judicial Member, delivered a final tribunal order on the appeal filed by K B Foundation, New Delhi against the Commissioner of Income-Tax (Exemptions), New Delhi.
The appellant, K B Foundation, appealed against the order dated February 22, 2021, by the CIT(E), New Delhi. The basis of the appeal was the rejection of the foundation’s application under sections 12AA(1)(b), 12A, and 80G(5)(vi) of the Income Tax Act, 1961, which deal with the registration and approval of charitable organizations for tax exemptions.
The case was notable for the absence of the appellant during the hearings, which were held on November 28, 2022. Despite several notices sent by speed post, no representative for the appellant attended the proceedings. The Departmental Representative, Smt. Abha Singh, argued that due to the lack of proper documentation presented by the appellant, the rejection by CIT(E) was justified.
The tribunal highlighted that the appeal raised significant issues regarding the procedural fairness. The appellant contested that they were not provided an adequate opportunity to present their case or respond to the notices, particularly the notice dated February 13, 2021. The order from CIT(E) lacked details on how this notice was served and whether the appellant had adequate opportunity to respond.
In their ruling, the tribunal decided to set aside the impugned order for ‘statistical purposes’ and remanded the matter back to CIT(E). They directed the CIT(E) to provide a fair opportunity of hearing to the appellant and to re-assess the application with all due procedural safeguards in place.
The tribunal’s decision underscores the critical importance of procedural fairness in the judicial process, particularly in cases involving potential exemptions for charitable organizations. The case was allowed for statistical purposes, indicating that while the appeal was allowed, it was primarily for the purpose of ensuring a fair process rather than a direct ruling on the merits of the original application.
Order pronounced in the open court on November 30, 2022, marking a significant stance on the importance of fair hearing rights in the judicial processes surrounding tax exemptions for charitable entities.
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