The Assessee had made an application for registration under S.12A of the Act. Pursuant to which it received a show cause notice from the office of CIT(E), which was signed by Dy.CIT(E). Assessee furnished various information/clarifications to the Dy.CIT(E), who conducted the proceedings. No proceedings were conducted by the CIT(E). Also no opportunity of being heard was given to the assessee by CIT(E) before rejecting assessee’s application under S. 12A of the Act.

On appeal the ITAT held that reasonable opportunity of being heard before refusing the registration u/s 12A ought to be given to the Assessee. Further the CIT cannot delegate the power of refusing the registration u/s 12A to a subordinate, reliance was placed on jurisdictional high court ruling in case of Ameliorating India (.   ) (399 ITR 196). Hence the ITAT held that the order passed CIT(E) without observing the due process of law, was procedurally deficient, constituting an irregularity and restored the matter back to the CIT(E).