HANK NUNN INSTITUTE,BENGALURU vs. ITO EXEMPTIONWARD 1 BLR, BENGALURU

ITA 2081/BANG/2026Status: DisposedITAT Bangalore30 September 2026AY 2026-276 pages
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What did the Tribunal hold?

The Tribunal held that under the statutory procedure for registration of a charitable trust, the CIT(Exemptions) must provide a reasonable opportunity of being heard before refusing registration. The assessee stated that the notice dated March 13, 2026, fixing the hearing for March 18, 2026, was not received. In these circumstances, the assessee was not afforded an effective opportunity of being heard. Therefore, the Tribunal set aside the impugned orders. The ratio decidendi is that an ex-parte order of rejection for registration or approval under Section 12AA or Section 80G(5) is unsustainable if the assessee was not provided with a proper and effective opportunity to be heard. The Tribunal directed the CIT(Exemptions) to issue a fresh notice and reconsider both applications after granting a proper hearing. The assessee is to comply with the notices and furnish all required information. The CIT(Exemptions) may conduct further inquiries. Both appeals were allowed for statistical purposes.

What were the facts?

The assessee, Hank Nunn Institute, filed applications for registration under Section 12AA and approval under Section 80G(5) of the Income-tax Act, 1961, with the Commissioner of Income Tax (Exemptions), Bangalore. The CIT(Exemptions) issued a notice on March 13, 2026, requiring details to verify the genuineness of the assessee's activities, with a hearing scheduled for March 18, 2026. The assessee claims it did not receive this notice and therefore could not comply. Consequently, the CIT(Exemptions) rejected both applications on March 23, 2026, citing non-submission of required details. The assessee appealed these rejections to the Income Tax Appellate Tribunal (ITAT), Bangalore Bench, for Assessment Year 2026-27.

What were the issues?

1. Whether the learned CIT(Exemptions) erred in rejecting the assessee's application for registration under Section 12AA by passing an ex-parte order without granting a fair and effective opportunity of being heard, thereby violating the principles of natural justice? (Question of law and fact, concerning Section 12AA). 2. Whether the learned CIT(Exemptions) erred in rejecting the assessee's application for approval under Section 80G(5) by passing an ex-parte order without granting a fair and effective opportunity of being heard, thereby violating the principles of natural justice? (Question of law and fact, concerning Section 80G(5)). Assessee's contentions: The assessee argued that it did not receive the final notice or hearing intimation and was unaware of the requirement to comply within the stipulated time. The rejection was arbitrary, cryptic, and non-speaking, as no adverse findings were recorded on the charitable objects or activities. Only prima facie genuineness is required at this stage. The assessee requested one more opportunity to submit documents and explanations. Revenue's contentions: The Departmental Representative supported the impugned orders, contending that the CIT(Exemptions) had allowed sufficient time for the assessee to furnish details, and the applications were rightly rejected due to the assessee's failure to do so.

Which sections of the Income-tax Act were involved?

Section 12AA,Section 80G(5)

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Income Tax Appellate Tribunal, BANGALORE BENCHES, BANGALORE

Before: SHRI PRASHANT MAHARISHI & SHRI KESHAV DUBEY

PER SHRI PRASHANT MAHARISHI, VICE PRESIDENT

1) These appeals by the same assessee challenge the Commissioner of Income Tax (Exemptions)’s rejection of its applications for registration under Section 12AA and approval under Section 80G(5) of the Income-tax Act, 1961. 2) In ITA No. 2081/Bang/2026, the assessee challenges the CIT(Exemptions), Bangalore’s order dated 23 March 2026, which rejected its registration ap

The order continues below.

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