ABHYUTHTHAN GRAM VIKAS MANDAL,SURAT vs. CIT(EXEMPTION), AHMEDABAD, AHMEDABAD

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ITA 581/SRT/2026Status: DisposedITAT Surat15 July 20265 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(E) should have provided a more effective opportunity to the assessee, adhering to principles of natural justice. The impugned order was set aside to allow the assessee to furnish necessary documents and explanations.

What were the facts?

The assessee applied for registration under Section 12A and approval under Section 80G. The CIT(E) rejected the applications due to non-compliance and lack of proper opportunity for the assessee to be heard. The assessee contended that only one opportunity was granted.

What were the issues?

Whether the CIT(E) properly afforded an opportunity of being heard to the assessee before rejecting the applications for registration and approval.

Which sections of the Income-tax Act were involved?

Section 12A,Section 80G

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “DB” BENCH, SURAT

Before: T R SENTHIL KUMAR & SHRI NARENDRA PRASAD SINHA

For Appellant: Shri Suresh K Kabra, CA
For Respondent: Shri Mukesh Jain, CIT-DR
Hearing: 20.05.2026Pronounced: 15.07.2026

PER NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER:

These two appeals are filed by the assessee against the separate orders of Commissioner of Income Tax (Exemption), Ahmedabad, [in short “CIT(E)”], both dated 08.03.2026 in the proceeding u/s 12A/12AB and u/s. 80G(5) of the Income Tax Act

2.

The brief facts of the case are that the assessee had filed an application in Form No. 10AB for registration u/s. 12A(1)(ac)(ii) of the Act. The Ld. CIT(E) had called for certain details from the assessee in order to examine the genuineness of the activities of the trust and to satisfy himself that the activities were in consonance with the objects of the trust. As no

ITA Nos. 581 & 582/Srt/2026 Abhyuththann Gram Vikas Madal Vs. CIT(E) 2 compliance was made by the assessee, the Ld. CIT(E) had rejected the application of the assessee vide the impugned order and the provisional registration granted earlier was also cancelled. Further in the absence of any valid registration u/s. 12A/12AB of the Act, the application for approval u/s. 80G(5) of the Act, was also rejected.

ITA No. 581/SRT/2026 3. Aggrieved with the order of the Ld. CIT(E), the assessee is in appeal before us. The following grounds have been taken in this appeal:

1.

The Ld. CIT(E) was not just and proper on the facts of the case and in law in rejecting the application of the Trust for registration u/s 12A. 2. The Rejection order may be recalled and registration u/s. 12A may be directed to be allowed to the Appellant. 3. Personal hearing may be granted. 4. Any other relief that your honors may deem fit may be granted. 5. The appellant craves leave to add, amend, alter or delete any or all of the above grounds of appeal

4.

Shri Suresh K Kabra the Ld. AR of the assessee submitted that the Ld. CIT(E) had allowed only one opportunity of hearing on 13.02.2026. The Ld. CIT(E) had passed the order without taking into account substantial details and documents filed with the application and without giving proper opportunity of being heard to the assessee. The Ld. AR requested that the assessee may be allowed another opportunity of being heard by setting aside the matter to the file of the Ld. CIT(E).

5.

Per contra, Shri Mukesh Jain, the Ld. CIT-DR, supported the order of Ld. CIT(E). He, however, had no objection if the matter was set aside the file of the Ld. CIT(E) for allowing another opportunity to the assessee.

ITA Nos. 581 & 582/Srt/2026 Abhyuththann Gram Vikas Madal Vs. CIT(E) 3 6. We have carefully considered the facts of the case and the material available on record. It is observed that the application of the assessee- trust for registration under section 12A of the Income-tax Act, 1961 came to be rejected by the Ld. CIT(E) primarily on account of non-compliance with the notice issued seeking certain documents and clarifications. From the records, it is evident that only one effective opportunity was granted to the assessee. The interest of natural justice cannot be served by rejecting the application of the assessee by allowing only one opportunity. Though the Ld. CIT(E) has mentioned in the order that notices were issued from time of time, we don’t find reference of any notice other than the notice dated 13.02.2026. Considering that the assessee is a charitable trust seeking registration under the provisions of the Act and that the issue relates to the examination of its objects and activities, we are of the considered view that one more opportunity deserves to be afforded to the assessee to place the requisite material before the Ld. CIT(E). The principles of natural justice require that a reasonable and effective opportunity of being heard be granted before an adverse decision is taken. In the facts and circumstances of the present case, and without expressing any opinion on the merits of the application, we deem it appropriate, in the interest of justice, to set aside the impugned order and restore the matter to the file of the Ld. CIT(E) for fresh adjudication. The assessee shall furnish all the documents, explanations and evidences as may be called for by the Ld. CIT(E) and shall fully cooperate in the proceedings. The Ld. CIT(E) shall afford adequate opportunity of being heard to the assessee and thereafter pass a speaking order in accordance with law. Accordingly, the impugned order is set aside and the matter is restored to the file of the Ld. CIT(E) for de novo consideration. The grounds raised by the assessee are allowed for statistical purposes.

ITA Nos. 581 & 582/Srt/2026 Abhyuththann Gram Vikas Madal Vs. CIT(E) 4 7. In the result, the appeal of the assessee is allowed for statistical purpose.

ITA No. 582/Srt/2026

8.

The application for approval u/s. 80G(5) of the Act was rejected by the Ld. CIT(E) for the reason that the assessee was not having a valid registration u/s. 12A/12AB of the Act. Since the matter regarding registration u/s. 12A of the Act has been set aside to the Ld. CIT(E), the present appeal in respect of approval u/s. 80G(5) of the Act is also set aside to the file of Ld.CIT(E), who should re-adjudicate the issue of grant of approval u/s. 80G(5) of the Act, after first deciding the issue of registration u/s. 12A/12AB of the Act.

9.

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

10.

In the final result, both the appeals of the assessee are allowed for statistical purpose.

Order pronounced in the Court on 15/07/2026 at Ahmedabad.

Sd/- Sd/- (T R SETHIL KUMAR) (NARENDRA PRASAD SINHA) Judicial Member Accountant Member Dated – 15th July, 2026 Neelesh, Sr. P.S (True Copy) आदेश आदेश क� आदेश आदेश क� क� �ितिलिप क� �ितिलिप �ितिलिप अ�ेिषत �ितिलिप अ�ेिषत अ�ेिषत/Copy of the Order forwarded to : अ�ेिषत 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबंिधत आयकर आयु� / Concerned CIT 4. आयकर आयु�(अपील) / The CIT(A) 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण / DR, ITAT, 6. गाड� फाईल /Guard file.

ITA Nos. 581 & 582/Srt/2026 Abhyuththann Gram Vikas Madal Vs. CIT(E) 5

आदेशानुसार/BY ORDER, आदेशानुसार आदेशानुसार आदेशानुसार पंजीकार (Dy./Asstt.Registrar) उप उप/सहायक उप उप सहायक सहायक पंजीकार सहायक पंजीकार पंजीकार आयकर अपीलीय आयकर अपीलीय अिधकरण अिधकरण, अहमदाबाद अहमदाबाद / ITAT, Ahmedabad आयकर आयकर अपीलीय अपीलीय अिधकरण अिधकरण अहमदाबाद अहमदाबाद

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