SARVA MANGAL MADHURAM TRUST,MUMBAI vs. COMMISSIONER OF INCOME TAX (EXEMPTION), MUMBAI

Briefly stated, as noted by the learned Commissioner of Income Tax (Exemptions) in the impugned order, M/s Sarva Mangal Madhuram Trust, hereinafter referred to as “the applicant”, filed an application in Form No. 10AB dated 30.09.2025 under section 80G(5) of the Act seeking approval under section 80G of the Act. On verification of the application, the learned Commissioner noticed that the application was not complete and that all the documents required to accompany the application had not been furnished. Accordingly, a notice dated 30.01.2026 was issued to the applicant requesting it to furnish the complete set of documents mentioned in Rule 11AA(2) of the Income-tax Rules, 1962.

The learned Commissioner further recorded that the applicant had not complied with all the terms of the aforesaid notice till the date of passing of the order. According to the learned Commissioner, approval under section 80G was required to be accorded only after satisfying himself regarding the genuineness of the activities of the applicant and its compliance with the conditions specified in clauses (i) to (v) of section 80G(5) of the Act and other relevant provisions of the Act applicable to charitable institutions. The learned Commissioner observed that, in the absence of the necessary compliance, he was unable to arrive at a satisfactory conclusion on these parameters and, therefore, rejected the application seeking approval under section 80G of the Act. The impugned order records that the application for renewal of approval was rejected on the ground of non-compliance with the terms of the notice issued to the applicant.

Aggrieved by the aforesaid order, the assessee is in appeal before us. The grounds raised by the assessee, before the Tribunal, are as under:

During the course of hearing before us, the learned Authorised Representative (ld.AR) submitted that the application filed by the assessee under section 80G of the Act had been rejected essentially on the ground that the assessee did not comply with the notice dated 30.01.2026. It was submitted that the notice dated 30.01.2026 constituted only a single opportunity and that, merely because there was no compliance with that notice, the application ought not to have been rejected without granting a further effective opportunity to the assessee to furnish the requisite details and documents and to explain its case. The ld.AR submitted that the assessee was ready and willing to furnish the requisite documents and details before the learned Commissioner and that the matter may, in the interest of justice, be restored to the file of the learned Commissioner for fresh consideration after granting adequate opportunity of being heard.

The learned Departmental Representative (ld.DR), on the other hand, supported the order passed by the learned Commissioner of Income Tax (Exemptions). He submitted that the assessee had filed an application under section 80G of the Act and, upon verification thereof, the learned Commissioner found that the application was not complete and that the documents required under Rule 11AA(2) had not been furnished. It was submitted that the assessee was specifically called upon by notice dated 30.01.2026 to furnish the requisite documents, but the assessee did not comply with the terms of the notice. The ld.DR, therefore, submitted that the learned Commissioner was justified in rejecting the application as he could not satisfy himself regarding the relevant statutory requirements in the absence of the requisite compliance by the assessee.

We have considered the rival submissions and perused the material available on record. We have also carefully gone through the impugned order passed by the learned Commissioner of Income Tax (Exemptions) and the grounds raised by the assessee before us. There is no dispute from the impugned order that the assessee had filed an application in Form No. 10AB dated 30.09.2025 seeking approval under section 80G of the Act and that the learned Commissioner found certain documents to be wanting and, accordingly, issued notice dated 30.01.2026 calling upon the assessee to furnish the complete set of documents mentioned in Rule 11AA(2) of the Rules.

It is equally evident from the impugned order that the application was rejected on the ground that the assessee had not complied with all the terms of the aforesaid notice. The learned Commissioner has recorded that, in the absence of the necessary compliance, he was unable to arrive at a satisfactory conclusion regarding the genuineness of the activities and compliance with the conditions prescribed under section 80G(5) of the Act. At the same time, the impugned order itself records only one opportunity having been afforded to the assessee, namely, the notice dated 30.01.2026. There is nothing brought on record before us to show that, after the alleged non-compliance with the said notice, any further notice or effective opportunity was granted to the assessee before the application was finally rejected.

In our considered view, where the consequence of non-compliance is rejection of an application seeking statutory approval under section 80G of the Act, the requirement of providing an effective and reasonable opportunity of being heard assumes significance. The purpose of an opportunity of being heard is not merely to issue a notice but to afford the applicant a meaningful opportunity to place the necessary material before the competent authority so that the application can be considered on its merits and a proper decision can be arrived at in accordance with law.

In the present case, the learned Commissioner has proceeded to reject the application essentially on account of the assessee’s failure to comply with the notice dated 30.01.2026. However, the record before us indicates that only one such opportunity was granted. In the facts and circumstances of the present case, we are of the considered view that one notice, particularly when the consequence is rejection of the application itself, may not, by itself, be regarded as sufficient opportunity of being heard, especially when the assessee has specifically raised the grievance that no further opportunity was granted before passing the order of rejection.

We are conscious of the fact that the learned Commissioner is required to examine whether the statutory conditions prescribed for grant of approval under section 80G are fulfilled and that the assessee is required to furnish the necessary documents and information in support of its application. However, the requirement of compliance by the assessee and the requirement of affording an effective opportunity by the competent authority have to be viewed together. The fact that the assessee did not comply with the first notice does not, in the circumstances of the present case, justify foreclosing its opportunity to place the requisite material on record without granting a further effective opportunity before rejecting the application.

We also find that the issue before us can be appropriately resolved by restoring the matter to the file of the learned Commissioner rather than expressing any view on the merits of the assessee’s claim for approval under section 80G of the Act. The learned Commissioner has not examined the application on merits by considering the requisite documents and explanations of the assessee, primarily because, according to him, the necessary compliance was not made. Therefore, any adjudication by us on the substantive eligibility of the assessee at this stage would not be appropriate.

In the interest of justice and in order to ensure that the assessee receives a proper and effective opportunity to present its case, we deem it appropriate to set aside the impugned order and restore the matter to the file of the learned Commissioner of Income Tax (Exemptions), Mumbai, for fresh consideration of the assessee’s application under section 80G of the Act. The learned Commissioner shall afford the assessee adequate and effective opportunity of being heard and shall consider the documents, details and explanations furnished by the assessee and thereafter decide the application afresh in accordance with law.

Needless to state, we have not expressed any opinion on the merits of the assessee’s application or on its eligibility for approval under section 80G of the Act. All issues relating to the satisfaction of the statutory conditions are left open for consideration by the learned Commissioner in the fresh proceedings. The assessee shall extend full cooperation and furnish the requisite details and documents as may be called for by the learned Commissioner.

In view of the aforesaid discussion, the grounds raised by the assessee are allowed for statistical purposes.

In the result, the appeal of the assessee is allowed for statistical purposes.