S S JAIN SABHA,FATEHABAD vs. COMMISSIONER OF INCOME TAX (EXEMPTIONS), CHANDIGARH

At the outset, ld. Counsel for the assessee submitted that its right to natural justice has been violated in as much as due opportunity of being heard has not been given before rejecting its request for grant of registration u/s 12A and 80G of the Act. The ld. Counsel submitted that its application u/s 12A has been rejected on the premise that the appellant was not engaged in any charitable activity. The ld. Counsel further argued that it had provided a large number of documents to allude that it was in the process of construction of Dharamshala, a key part of its charitable activities. It was argued that the appellant therefore cannot be accountable for not pursuing any charitable activities. The ld. Counsel accordingly requested that it be provided one last chance to defend its case and, the matter be considered for remission back to the ld. CIT(E) with directions for consideration of appellants documents and grant of registration.

The ld. DR placed reliance upon the orders of the lower authorities

We have heard rival submissions and perused the material available on record. We have noted that the Ld. CIT(E) has rejected applications of the assessee without due consideration of facts on records alluding towards a non- application of mind. We have noted that the ld. CIT(E) has dismissed assessee’s application for grant of registration under section 12A and u/s 80G purely drawing unilateral conclusions. There is nothing on record to suggest that any opportunity was given. We have also noted from the evidence of record that the construction of Dharamshala was in progress and hence a conclusion of total absence of any activity qua charitable activity cannot be drawn. Providing Dharamshala for use by the needy is a charitable activity and the construction of the Dharamshala to achieve this objective constitutes an extension of the activity. Be that as it may be in the interest of justice, we deem it appropriate to set-aside the impugned orders of the ld. CIT(E) and remit the matter of grant of registration u/s 12A as well as u/s 80G back to ld. CIT(E) for consideration. He is directed to allow the assessee grant of registration u/s 12A as well as u/s 80G. Accordingly, the appeals of the assessee vide ITA No.4549/Del/2026 and vide ITA No. 4512/Del/2026 are allowed.

Finally, both the appeals of the assessee are allowed.