RAJESHWARI SANGEET ACADEMY TRUST,JALANDHAR vs. COMMISSIONER OF INCOME TAX(EXEMPTION), CHANDIGARH

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ITA 715/CHANDI/2026Status: DisposedITAT Chandigarh14 July 2026AY 2025-264 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the principles of natural justice require an effective opportunity of hearing before passing an adverse order. The application was rejected primarily on technical grounds of non-compliance without adjudicating on the merits.

What were the facts?

The assessee trust applied for registration under section 12AB. The CIT(E) rejected the application for non-compliance with notices and failure to furnish required details. The assessee contended that they were not granted an adequate opportunity of hearing.

What were the issues?

Whether the registration under section 12AB was wrongly cancelled due to non-compliance without affording a proper opportunity of hearing and without examining the merits of the application.

Which sections of the Income-tax Act were involved?

Section 12AB

AI-generated summary — verify with the full judgment below

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. 715 /Chd/ 2026 िनधा�रण वष� / Assessment Year : 2025-26 Rajeshwari Sangeet Academy Trust बनाम The CIT Exemptions Apeejay School Building, Bhagwan Chandigarh Mahavir Marg, New Jawahar Nagar, Jalandhar-144001, Punjab �ायी लेखा सं./PAN NO: AAATR2430F अपीलाथ�/Appellant ��थ�/Respondent िनधा�रती की ओर से/Assessee by : Shri Nirmal Mahajan, 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. 05/03/2026 for the Assessment Year 2025-26. 2. In the present appeal Assessee has raised the following grounds:

1.

That the learned CIT(E), Chandigarh has erred in law and facts of the case by cancelling the registration by ex-parte order denying the natural justice tot the assessee. 2. That the learned CIT(E) has erred in law and facts of the case by holding that the assessee did not respond to notice dated 04/0/2026. On the contrary the assessee uploaded adjournment request on the given date. 3. That the learned CIT(E) has erred in law and facts of the case by not allowing the registration under section 12A(1)(ac)(ii) of the Income Tax Act, 1961 and cancelling the same by order dt. 05/03/2026. 4. That the appellant craves leave to add, amend, alter, and/or delete any of the above grounds of appeal at or before the time of hearing. 3. Briefly the facts of the case are that the assessee trust filed an application in Form No. 10AB seeking registration under section 12AB of the

Act. During the course of proceedings, the Ld. CIT(E) issued a detailed questionnaire requiring the assessee to furnish various details relating to the objects of the trust, audited financial statements, corpus fund, fixed deposits, expenditure on educational programmes, publicity expenses, repair and maintenance expenditure, vouchers, bills, bank statements and other supporting documents. The assessee, according to the Ld. CIT(E), failed to furnish the requisite information despite issuance of notice through the income-tax portal and email. Consequently, the application was rejected for non-compliance.

4.

The Ld. AR submitted that the impugned order deserves to be set aside as adequate and effective opportunity of hearing was not granted before rejecting the application. It was argued that although notices were issued, the assessee could not furnish the desired details for bona fide reasons and the application has been rejected merely on account of alleged non- compliance without examining the genuineness of the activities of the trust. It was further submitted that registration under section 12AB is a beneficial provision and the assessee is willing to furnish all documents, books of account, vouchers, bank statements and any other evidence required by the Ld. CIT(E). It was, therefore, prayed that the matter be restored to the file of the Ld. CIT(E) for fresh adjudication after granting adequate opportunity.

5.

The Ld. DR strongly supported the order of the Ld. CIT(E). It was submitted that the Commissioner had issued a comprehensive questionnaire seeking relevant information regarding the genuineness of the activities and application of funds by the trust. Despite sufficient opportunity, the assessee neither complied with the notices nor produced the requisite documentary evidence. Therefore, the Ld. CIT(E) was justified in rejecting the application under section 12AB of the Act.

6.

We have heard the rival submissions and carefully perused the material available on record.

6.1 The impugned order reveals that the application has been rejected primarily for want of compliance with the notices issued by the Ld. CIT(E). No doubt, the Commissioner is empowered to call for such information as may be necessary to satisfy himself regarding the genuineness of the activities of the trust and the fulfilment of the statutory conditions prescribed under section 12AB. At the same time, the object of the provision is to examine whether the institution satisfies the requirements for grant of registration and not merely to reject the application on technical grounds where the deficiencies are capable of being cured.

6.2 The principles of natural justice require that an assessee should be afforded an effective and meaningful opportunity of being heard before an adverse order is passed. Registration under section 12AB has significant civil consequences, and therefore, the application deserves to be examined on merits after considering all the relevant material that the assessee may place on record.

6.3 We also find that the impugned order does not adjudicate upon the genuineness of the activities of the trust on the basis of evidence produced, but proceeds mainly on the premise of non-compliance. In the interest of substantial justice, one more effective opportunity deserves to be granted to the assessee to substantiate its claim.

6.4 Accordingly, without expressing any opinion on the merits of the application, we deem it appropriate to set aside the impugned order and restore the matter to the file of the Ld. CIT(E). The Ld. CIT(E) shall afford adequate opportunity of hearing to the assessee, permit it to file all supporting documents, audited financial statements, books of account, vouchers, bank statements and any other evidence considered necessary, and thereafter examine the application afresh in accordance with law by passing a speaking and reasoned order.

6.5 The assessee is also directed to extend full cooperation and shall not seek unnecessary adjournments. Failure to comply with the notices or directions issued by the Ld. CIT(E) shall entitle the authority to proceed in accordance with law.

7.

In the result, the appeal of the assessee is allowed for statistical purposes, with the matter restored to the file of the Ld. CIT (Exemptions) for adjudication afresh in accordance with law after providing adequate and reasonable opportunity of being heard.

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

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