MODERN WAYS MODEL SCHOOL,CHANDIGARH vs. CIT EXEMPTIONS, CHANDIGARH

आयकर अपीलीय अिधकरण,च�ीगढ़ �ायपीठ “बी” , च�ीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “B”, CHANDIGARH HEARING THROUGH: HYBRID MODE �ी लिलत कुमार, �ाियक सद� एवं �ी मनोज कुमार अ�वाल, लेखा सद� BEFORE: SHRI. LALIET KUMAR, JM & SHRI. MANOJ KUMAR AGGARWAL, AM आयकर अपील सं./ ITA No. 666 /Chd/ 2026 िनधा�रण वष� / Assessment Year : 2027-28 Modern Ways Model School बनाम The CIT Exemptions Sector 29-C, Chandigarh-160029 Chandigarh �ायी लेखा सं./PAN NO: AABTM1531D अपीलाथ�/Appellant ��थ�/Respondent िनधा�रती की ओर से/Assessee by : Shri Yogesh Monga, C.A (Virtual Mode) राज� की ओर से/ Revenue by : Smt. Geetinder Mann, CIT-DR सुनवाई की तारीख/Date of Hearing : 01/07/2026 उदघोषणा की तारीख/Date of Pronouncement : 14/07/2026 आदेश/Order PER LALIET KUMAR, J.M: This is an appeal filed by the Assessee against the order of the Ld. CIT(E), Chandigarh dt. 03/03/2026 for the Assessment Year 2027-28. 2. The assessee, a charitable institution engaged in educational activities, filed an application in Form No. 10AB seeking registration under section 12AB of the Act. During the course of processing the application, the learned CIT(E) issued a show cause notice dated 10.02.2026 requiring the assessee to furnish certain clarifications regarding the discrepancy in the name of the applicant and certain clauses of the Memorandum of Association. The hearing was fixed for 17.02.2026. The assessee sought an adjournment on the said date. However, without granting any further opportunity or issuing any subsequent notice, the learned CIT(E) rejected the application by holding that the assessee had failed to furnish the requisite information and, therefore, the genuineness of its activities and objects could not be verified. 2.1 The Ld. AR submitted that the impugned order has been passed in gross violation of the principles of natural justice. It was contended that only one show cause notice was issued by the learned CIT(E), and immediately upon receipt thereof the assessee sought an adjournment for compilation of the relevant records.

2 Without granting any further opportunity or issuing another notice, the learned CIT(E) proceeded to reject the application. Such action, according to the learned AR, deprived the assessee of an effective opportunity to explain the discrepancies pointed out in the notice.

2.2 The learned AR further submitted that proceedings under section 12AB are quasi-judicial in nature and the Commissioner is required to examine the charitable objects and genuineness of activities on merits. The application cannot be rejected merely because the assessee sought an adjournment on the first occasion. It was argued that the Ld. CIT(E) has not recorded any finding that the objects of the assessee are non-charitable or that the activities carried on by it are not genuine. The rejection rests solely upon alleged non-compliance, which is a procedural lapse and not a substantive ground for refusing registration. 2.3 The Ld. AR accordingly prayed that the impugned order be set aside and the matter be restored to the file of the Ld. CIT(E) with a direction to afford adequate opportunity of hearing and thereafter decide the application afresh in accordance with law. 3. The Ld. DR supported the impugned order. It was submitted that the learned CIT(E) had issued a show cause notice calling upon the assessee to furnish relevant documents necessary for examining the claim of registration under section 12AB. Despite having knowledge of the proceedings, the assessee failed to furnish the requisite information within the stipulated time. 3.1 The Ld. DR argued that the burden to establish the charitable nature of the objects and genuineness of the activities lies upon the applicant seeking registration. Since the assessee did not produce the necessary material despite opportunity, the learned CIT(E) was justified in concluding that the statutory requirements could not be verified. It was therefore submitted that no interference with the impugned order was called for. 4. We have heard the rival submissions and carefully perused the material available on record. It is an admitted position that the Ld. CIT(E) issued only one show cause notice dated 10.02.2026 fixing the hearing on 17.02.2026. The record further reveals that the assessee sought an adjournment on the scheduled date. Thereafter, without issuing any fresh notice or granting any further effective opportunity of hearing, the learned CIT(E) proceeded to reject the application

3 under section 12AB on the ground that the assessee had failed to furnish the requisite information. 4.1 In our considered opinion, the proceedings for grant of registration under section 12AB are quasi-judicial proceedings. The Commissioner is required to satisfy himself regarding the charitable objects of the institution and the genuineness of its activities after affording a fair, effective and meaningful opportunity of hearing. The rejection of an application involving valuable statutory rights should ordinarily be based on examination of the material on merits and not merely on account of a solitary instance of non-compliance, particularly where the assessee had sought an adjournment on the very first date fixed for hearing. 4.2 The principles of natural justice require that an applicant should be afforded a reasonable opportunity to present its case. Mere seeking of an adjournment on the first date cannot, by itself, lead to an inference that the assessee was not interested in pursuing its application. We also notice that the learned CIT(E) has not recorded any categorical finding that the objects of the assessee are non- charitable or that its activities are ingenuine. The rejection has been founded exclusively on the alleged failure to furnish information. 4.3 The Hon'ble Supreme Court has consistently held that procedural rules are handmaids of justice and that matters should ordinarily be decided on merits rather than on technical defaults. Since the impugned order has been passed without granting an effective opportunity to the assessee to explain the discrepancies and furnish the necessary documents, we are of the considered opinion that the interests of justice would be served by restoring the matter to the file of the Ld. CIT(E). 4.4 Accordingly, we set aside the impugned order and remand the matter to the file of the Ld. CIT (E), Chandigarh. The Ld. CIT(E) shall afford adequate and effective opportunity of hearing to the assessee, permit it to file all documentary evidence and explanations in support of its application, examine the charitable objects and genuineness of the activities in accordance with section 12AB of the Act, and thereafter pass a reasoned and speaking order in accordance with law.

4.5 The assessee is also directed to extend full cooperation in the remand proceedings and shall not seek unnecessary adjournments. It is made clear that we have not expressed any opinion on the merits of the claim for registration, and all issues are left open to be adjudicated afresh by the Ld. CIT(E).

Order pronounced on 14/07/2026

Sd/- Sd/- मनोज कुमार अ�वाल लिलत कुमार (MANOJ KUMAR AGGARWAL) (LALIET KUMAR) लेखा सद�/ ACCOUNTANT MEMBER �ाियक सद� /JUDICIAL MEMBER AG आदेश की �ितिलिप अ�ेिषत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��थ�/ The Respondent 3. आयकर आयु�/ CIT 4. आयकर आयु� (अपील)/ The CIT(A) 5. िवभागीय �ितिनिध, आयकर अपीलीय आिधकरण, च�ीगढ़/ DR, ITAT, CHANDIGARH 6. गाड� फाईल/ Guard File

BY ORDER, ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KENDRIYA SADAN, SECTOR-9A CHANDIGARH