HITKARNI SABHA,JABALPUR vs. CIT (EXEMPTION), BHOPAL

ITA 124/JAB/2025Status: DisposedITAT Jabalpur29 September 20265 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the rejection of the assessee's application for regular registration under Section 80G(5) and the cancellation of its provisional registration were unjustified due to a violation of the principles of natural justice. The Tribunal noted that as per Clause (ii)(b)(B) of the 2nd proviso to Section 80G(5) of the Act read with the proviso to Rule 11AA(5) of the Income Tax Rules, 1962, the CIT(E) was duty-bound to provide an opportunity in the form of a show-cause notice before rejecting the application and cancelling the provisional registration. The judgment stated that the assessee was not confronted with the negative findings forming the basis of the rejection. The notice issued was considered insufficient, not providing a real, reasonable, and effective opportunity, nor a reasonable period of not less than fifteen clear days. Citing the Supreme Court's pronouncements that if a statute provides a thing to be done in a particular manner, it must be done so, and the Patna High Court's decision, the Tribunal set aside the impugned order. The matter was remanded to the CIT(E) to provide the appellant with three opportunities to refute the reasons for rejection and cancellation. The merits of the case were not commented upon.

What were the facts?

The assessee, Hitkarni Sabha, a registered public trust holding a provisional registration under Section 80G of the Income Tax Act, 1961, applied for regular registration. The Commissioner of Income Tax (Exemption), Bhopal (CIT(E)), rejected the application and cancelled the provisional registration via an order dated 25/03/2025. The CIT(E) cited the assessee's failure to furnish required documentary evidence to prove its entitlement. The assessee appealed this order to the Income Tax Appellate Tribunal (ITAT), Jabalpur Bench, challenging the denial of regular registration and the cancellation of its provisional registration. The appeal was filed under ITA No. 124/JAB/2025.

What were the issues?

1. Whether the rejection of the assessee's application for regular registration under Section 80G(5) of the Income Tax Act, 1961, and the cancellation of its provisional registration violated the principles of natural justice, specifically the requirement to provide an opportunity of being heard before passing an adverse order? (Question of law and fact, concerning Section 80G(5) and Rule 11AA(5) of the Income Tax Rules, 1962). Assessee's contentions: The assessee argued that it was not provided with a show-cause notice or a reasonable opportunity to refute the negative findings that formed the basis of the rejection. The notice dated 13/03/2025, calling for evidence by 20/03/2025, was insufficient and did not allow for a reasonable period to present its case. The rejection was made without following the prescribed procedure, thus violating the principles of natural justice. The assessee relied on the Supreme Court's decision in 'Chandra Kishore Jha Vs Mahavir Prasad' and the Patna High Court's decision in 'St. Paul’s Anglo Indian Education Trust'. Revenue's contentions: The judgment records no specific contentions from the revenue.

Which sections of the Income-tax Act were involved?

Section 80G(5),Section 12A,Section 11AA(5)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JABALPUR BENCH, MP

Before: HON’BLE SHRI KUL BHARAT & SHRI G.D. PADMAHSHALI

For Appellant: Mr P C Bardia [‘Ld. AR’]
For Respondent: Mr Dhananjay Wanjari [‘Ld. DR’]
Pronounced: 29/09/2026

PER G. D. PADMAHSHALI; By the present appeal, the assessee impugning the DIN & Order No.

ITBA/EXM/F/EXM45/2024-25/1075018687(1) dt. 25/03/2025

passed u/s 80G(5) of the Income Tax Act, 1961 [‘the Act’] by the Commissioner of Income Tax (Exemption), Bhopal [‘Ld. CIT(E)’]

whereby application for grant of regular 80G registration was rejected.

ITAT-Jabalpur Hitkarni Sabha Vs. CIT(E)

2.

We have heard the rival contentions of both parties on the limited issue of violation of principle of natural justice (ground no 2); subject to provisions of rule 18 of Income Tax Appellate Rules, 1963 [‘ITAT Rules’ hereinafter] perused material placed on rec

The order continues below.

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