GANGAI VATTARA KALANJIAM,MADURAI vs. CIT (EXEMPTION) CHENNAI, CHENNAI

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ITA 3540/CHNY/2026Status: DisposedITAT Chennai25 August 2026AY 2026-20274 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the assessee was not afforded a reasonable opportunity of being heard as a new issue was raised with only seven days to respond. Therefore, the matter was restored to the CIT(E) for fresh adjudication.

What were the facts?

The assessee's application for approval under Section 12AB was rejected by the CIT(E) for failing to respond to a show-cause notice. The assessee argued that the notice raised a new issue with insufficient time to respond.

What were the issues?

Whether the assessee was granted a reasonable opportunity of being heard when a new issue was raised in a show-cause notice with a short response period.

Which sections of the Income-tax Act were involved?

Section 12AB

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI

Before: SHRI GEORGE GEORGE K & SHRI GAGAN GOYAL

Hearing: 25.08.2026Pronounced: 25.08.2026

आदेश/ O R D E R PER GEORGE GEORGE K, VICE PRESIDENT: This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Exemption), Chennai dated 29.03.2026, rejecting Form No.10AB filed for seeking approval u/s.12AB of the Income Tax Act, 1961 (hereinafter the ‘Act’).

ITA No.3540/CHNY/2026 - 2 - Gangai Vattara Kalanjiam 2. There is a delay of 22 days in filing the appeal before the Tribunal. The Managing Trustee of the assessee-trust has filed a petition for condonation of delay supported by an affidavit explaining the reasons for the belated filing of the appeal. It was submitted that the Managing Trustee, who was primarily responsible for taking decisions relating to the affairs of the Trust, including legal and taxation matters, was undergoing treatment for urosepsis and breast cancer and was hospitalized during the relevant period. Owing to hospitalization and continuous medical treatment, the Managing Trustee was unable to attend to the affairs of the Trust or consult the tax professionals, resulting in the delay in filing the appeal. On perusal of the reasons stated in the affidavit, we are of the view that no latches can be attributed to the assessee as there is sufficient cause for belated filing of these appeals. Hence, we condone the delay and proceed to dispose off the appeal on merits.

3.

At the very outset, we notice that the CIT(E) rejected the application filed by the assessee on the ground that the assessee had failed to respond to the show-cause notice dated 09.03.2026 issued from his office. The Ld. AR submitted that, for the first time, the CIT(E), through the said show-cause notice, raised the issue that the activities of the assessee-trust were in the nature of mutuality/micro-

ITA No.3540/CHNY/2026 - 3 - Gangai Vattara Kalanjiam finance. It was submitted that only seven days’ time, i.e., up to 16.03.2026, was granted to the assessee to respond. Consequently, the assessee did not have adequate time to examine the issue and compile a considered response along with the details called for. The Ld. AR, therefore, submitted that the assessee was not afforded a reasonable opportunity of being heard and pleaded that, in the interest of justice and equity, one more opportunity be granted to the assessee to effectively represent its case before the CIT(E).

4.

The ld.DR supported the order of CIT(E).

5.

We have heard the rival submissions and perused the material available on record. The Ld. AR contended that the CIT(E), vide show-cause notice dated 09.03.2026, raised, for the first time, the issue as to whether the activities of the assessee-trust were in the nature of mutuality/micro-finance and granted only seven days’ time to the assessee to furnish its response. The Ld. AR submitted that the assessee did not have adequate time to examine the issue and furnish a considered response along with the relevant details and supporting evidences. In our considered view, the assessee ought to have been afforded reasonable opportunity of being heard, particularly when a new issue was raised in the show-cause notice.

ITA No.3540/CHNY/2026 - 4 - Gangai Vattara Kalanjiam Accordingly, in the interest of natural justice, we deem it appropriate to restore the matter to the file of the CIT(E) for fresh adjudication in accordance with law. The CIT(E) shall afford reasonable opportunity of hearing to the assessee and decide the application afresh after considering the submissions and evidences furnished by the assessee. It is ordered accordingly.

6.

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

Order pronounced in the open court on 25th August,2026 at Chennai.

Sd/- Sd/- (जॉज� जॉज� के) (गगन गोयल) (GEORGE GEORGE K) (GAGAN GOYAL) लेखा सद�य/ACCOUNTANT MEMBER उपा�य� /VICE PRESIDENT चे�नई/Chennai, �दनांक/Dated, the 25th August, 2026 RSR, Sr.PS आदेश क� ��त�ल�प अ�े�षत/Copy to: 1. अपीलाथ�/Appellant 2. ��यथ�/Respondent 3. आयकर आयु�त /CIT, Madurai 4. �वभागीय ��त�न�ध/DR 5. गाड� फाईल/GF. By Order Digitally signed by REKHA REKHA SENTHIL RAJ SENTHIL RAJ Date: 2026.08.28 17:42:48 +05'30'

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