SHREE UPNAGAR LAD CHARITY TRUST,MUMBAI vs. CIT EXEMPTION MUMBAI, MUMBAI

From the material available on record, it is observed that the learned CIT(E) issued a notice dated 09.01.2026 calling upon the assessee to furnish the complete set of documents, information and details as required under Rule 17A of the Income-tax Rules, 1962 (“the Rules”). In the impugned order, the learned CIT(E) has observed that the assessee did not comply with all the requirements contained in the said notice and, consequently, the requisite parameters could not be satisfactorily examined and verified in accordance with the provisions of the Act read with the relevant Rules. On this basis, the learned CIT(E) proceeded to reject the application filed by the assessee seeking renewal of registration under section 12AB of the Act. The application filed by the assessee seeking approval under section 80G(5) of the Act was also rejected on the ground that, in the absence of valid registration under section 12AB of the Act, the assessee could not be granted approval under section 80G(5) of the Act. Thus, both the applications came to be rejected primarily on account of the assessee's alleged failure to furnish the requisite information and documents pursuant to the notice issued by the learned CIT(E).

Aggrieved by the aforesaid orders, the assessee preferred the present appeal before the Tribunal. During the course of hearing, the learned Authorised Representative (“the learned AR”) submitted that the learned CIT(E) had issued only one notice dated 09.01.2026 requiring the assessee to furnish various documents and details in terms of Rule 17A of the Rules. It was submitted that the assessee was in the process of collecting and compiling the requisite information and supporting documents and was taking steps to comply with the requirements contained in the notice. According to the learned AR, before the assessee could furnish the requisite information and documents, the learned CIT(E) proceeded to dispose of the applications and rejected the assessee's claim for renewal of registration under section 12AB as well as the application for approval under section 80G(5) of the Act. It was therefore contended that the assessee had not been afforded a reasonable opportunity to comply with the requirements of the notice or to place its case before the learned CIT(E). The learned AR submitted that the impugned orders, having been passed without granting adequate opportunity to the assessee, were in violation of the principles of natural justice. He accordingly prayed that the impugned orders be set aside and the matters be restored to the file of the learned CIT(E) for fresh adjudication after granting reasonable and sufficient opportunity to the assessee to furnish the requisite information and documents and to make its submissions.

The learned Departmental Representative (“the learned DR”), on the other hand, relied upon the orders passed by the learned CIT(E) and supported the rejection of the applications. It was submitted that the assessee had been called upon to furnish the requisite information and documents but had failed to comply with the requirements contained in the notice. Accordingly, according to the learned DR, the learned CIT(E) was justified in arriving at the conclusion that the requisite parameters could not be satisfactorily examined and, consequently, in rejecting the applications filed by the assessee.

We have carefully considered the rival submissions and perused the material available on record. On examination of the impugned order, it is apparent that only one notice dated 09.01.2026 was issued by the learned CIT(E) calling upon the assessee to furnish the requisite information and documents. The assessee has specifically contended before us that, pursuant to the said notice, it was in the process of collecting and compiling the information and documents required to be furnished and that sufficient time was not available to place the complete details before the learned CIT(E) before the applications came to be disposed of. We find considerable force in the contention of the assessee that, having regard to the nature of the proceedings and the consequences that follow from rejection of an application for registration under section 12AB and approval under section 80G(5), the assessee ought to have been afforded a reasonable and effective opportunity to furnish the requisite details and supporting documents and to explain its case before an adverse order was passed. The requirement of affording an effective opportunity of being heard is not an empty formality; rather, it constitutes an essential component of a fair adjudicatory process, particularly where the decision may have adverse civil consequences for the assessee.

In the facts of the present case, we are of the considered opinion that issuance of a solitary notice dated 09.01.2026, followed by rejection of the applications on the ground that the assessee had not furnished all the requisite information and documents, cannot, in the circumstances of the case, be regarded as sufficient opportunity having been afforded to the assessee. Once the learned CIT(E) considered the information and documents to be necessary for determining the assessee's eligibility for registration and approval, the assessee ought to have been given a reasonable opportunity to comply with the requirements and to place the relevant material on record. The object of granting an opportunity of hearing is to enable the concerned party to effectively present its case and furnish such material as may be relevant for determination of the issue. In the present case, the assessee has stated that it was in the process of collecting the information called for and that the proceedings came to be concluded before the requisite details could be furnished. In our considered view, the matter ought therefore to be reconsidered by the learned CIT(E) after granting adequate and effective opportunity to the assessee.

In view of the aforesaid facts and circumstances and in the interest of substantial justice, we deem it appropriate to set aside the impugned orders and restore the matters to the file of the learned CIT(E) for fresh adjudication de novo in accordance with law. The learned CIT(E) shall provide reasonable and sufficient opportunity to the assessee to furnish all such information, documents and explanations as may be considered necessary for adjudicating the applications for renewal of registration under section 12AB and approval under section 80G(5) of the Act. Thereafter, the learned CIT(E) shall consider the information and documents furnished by the assessee, examine the submissions made by it and pass appropriate speaking and reasoned orders in accordance with law. We make it clear that we have not expressed any opinion on the merits of the applications or on the eligibility of the assessee for registration under section 12AB or approval under section 80G(5). All such issues are left open for consideration by the learned CIT(E) in the fresh proceedings. The assessee, on its part, shall extend full cooperation in the proceedings and furnish the requisite information and documents within the time allowed by the learned CIT(E).

Accordingly, the impugned orders are set aside and the matters are restored to the file of the learned CIT(E) for fresh adjudication in accordance with law and after affording reasonable opportunity of being heard to the assessee.

In the result, the appeals filed by the assessee are allowed for statistical purposes.