CHANDIGARH ROTARY CLUB SERVICE TRUST,CHANDIAGRH vs. COMMISSIONER OF INCOME TAX (E), CHANDIGARH

We shall take up the appeal in ITA No. 58/Chd/2026 as a lead case for discussion.

The present appeal has been filed by the assessee against the order dated 04.11.2025 passed by the Ld. Commissioner of Income Tax (Exemptions), Chandigarh, whereby the application filed by the assessee in Form No. 10AB for registration under section 12A(1)(ac) of the Income Tax Act, 1961 was cancelled.

The assessee, a charitable trust, had electronically filed its application on 29.08.2025. However, the Ld. CIT(E) cancelled the same on the ground that the application was filed under a wrong clause and was therefore non-maintainable.

During the course of hearing, the assessee challenged the impugned order on various grounds, submitting that the order passed by the Ld. CIT(E) is bad in law and contrary to the provisions of the Act, as the application was rejected merely on account of a technical defect without issuance of any show cause notice. It was further contended that although detailed replies and requisite information were furnished during the course of proceedings, the same were not properly considered, and no opportunity was granted to rectify the alleged defect in Form No. 10AB. The assessee also submitted that any delay, if at all, in filing the corrected form deserved to be condoned and that the action of the Ld. CIT(E) is in clear violation of the principles of natural justice.

Per contra, the Ld. DR relied on the order of the Ld. CIT(E).

We have considered the rival submissions and perused the material available on record. It is observed that the cancellation of the assessee’s application has been made solely on technical grounds, i.e., filing under an incorrect clause, without examining the merits of the case or the genuineness of the activities of the trust. It is a well-settled principle that procedural or technical defects should not defeat substantive rights, particularly in matters relating to grant of registration to charitable institutions. Further, it is incumbent upon the authority to provide a reasonable opportunity to the assessee to rectify such defects and to present its case effectively.

1 In the present case, it is evident that no effective opportunity was provided to the assessee to correct the alleged mistake in the application, nor was the issue adjudicated on merits. The cancellation of the application at the threshold, without affording proper opportunity, is not in consonance with the principles of natural justice. Therefore, in the interest of justice and fair play, we deem it appropriate to set aside the impugned order passed by the Ld. CIT(E).

2 Accordingly, the matter is remanded back to the file of the Ld. CIT(E) with a direction to grant adequate opportunity of being heard to the assessee, allow rectification of any technical defects in Form No. 10AB, and thereafter examine the application afresh on merits in accordance with law and pass a speaking order.

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

Now we shall deal the appeal in ITA No. 59/Chd/2026. 11. This is an appeal been filed by the assessee against the order passed by the Ld. CIT(E), Chandigarh, whereby the application filed by the assessee for approval under section 80G(5) of the Income Tax Act, 1961 in Form No. 10AB has been cancelled on the ground that the same was filed under an incorrect clause and was, therefore, treated as non-maintainable.

During the course of hearing, the assessee challenged the impugned order on various grounds, contending that the order passed by the Ld. CIT(E) is bad in law and contrary to the provisions of the Act. It was submitted that the application of the assessee has been rejected merely on account of a technical defect without issuing any show cause notice. The assessee further submitted that, despite furnishing detailed replies and requisite information in response to the questionnaire issued during the proceedings, the same were not duly considered by the Ld. CIT(E). It was also contended that no opportunity was granted to the assessee to rectify the alleged defect in Form No. 10AB. The assessee further argued that the delay, if any, in filing the corrected form deserved to be condoned and that the action of the Ld. CIT(E) is in clear violation of the principles of natural justice.

On the other hand, the Ld. DR relied upon the order of the Ld. CIT(E) and submitted that the application was rightly rejected as the same was filed under the wrong clause and, therefore, was not maintainable as per law.

We have heard the rival submissions and perused the material available on record, including the impugned order passed by the Ld. CIT(E). It is observed that the application of the assessee has been rejected primarily on account of a technical defect, i.e., filing under an incorrect clause, without providing adequate opportunity to the assessee to rectify the defect. It is further noted that although certain details were called for and furnished by the assessee, the rejection has been made without addressing the substantive compliance and without affording a reasonable opportunity to cure the defect. In our considered view, such action is not in consonance with the principles of natural justice, which mandate that an assessee should be provided sufficient opportunity to rectify procedural defects, especially when the claim is otherwise eligible for consideration on merits.

Considering the totality of facts and circumstances of the case, and in the interest of justice, we deem it appropriate to set aside the impugned order of the Ld. CIT(E) and restore the matter back to his file with a direction to re-examine the application of the assessee afresh. The Ld. CIT(E) shall provide a reasonable opportunity to the assessee to rectify the defect in Form No. 10AB, consider the corrected application, and decide the issue in accordance with law after granting adequate opportunity of being heard to the assessee. The assessee is also directed to cooperate in the proceedings and file the requisite corrected form and supporting documents within the time allowed.

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

In the result, both the above appeals of the Assessee are allowed for statistical purposes.

""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