V S JAIN CHARITABLE TRUST,HISAR vs. CIT E , CHANDIGARH

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ITA 3056/DEL/2026Status: DisposedITAT Delhi25 September 20264 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the right to a reasonable opportunity of being heard is a fundamental right of every taxpayer. It noted that the CIT(E) had rejected the assessee's applications for registration under section 12A and 80G on the premise of non-supply of requisite documents and a perceived failure to substantively reply to show cause notices regarding the genuineness of charitable activities. The Tribunal found that the CIT(E) had rejected the applications without due consideration of facts and alluded to a non-application of mind. In the interest of justice, the Tribunal set aside the impugned orders of the CIT(E) and remitted the matters back to the CIT(E) for de novo adjudication. The assessee was directed to comply with all statutory notices, with non-compliance to be viewed adversely. The appeals were allowed for statistical purposes.

What were the facts?

The assessee, V S Jain Charitable Trust, filed two appeals before the Income Tax Appellate Tribunal (ITAT), Delhi Bench, against orders dated 13.03.2026 passed by the Commissioner of Income Tax (Exemption), Chandigarh (CIT(E)). ITA No. 3056/Del/2026 pertains to the rejection of the assessee's request for registration under section 12A(1)(ac)(ii) of the Income Tax Act, 1961. ITA No. 3057/Del/2026 concerns the rejection of its request under section 80G(5)(ii) of the Act. Both appeals were heard together. The CIT(E) rejected the applications, stating that the assessee failed to provide a substantive reply explaining how its financial statements constituted charitable activities or demonstrated actual charitable work over a prolonged period. The assessee contended that its right to natural justice was violated due to a lack of due opportunity to be heard.

What were the issues?

1. Whether the assessee's right to natural justice was violated by the CIT(E) in rejecting its applications for registration under section 12A(1)(ac)(ii) and 80G(5)(ii) of the Income Tax Act, 1961, without providing a due opportunity of being heard? The assessee argued that its right to natural justice was violated, as it was not given a proper opportunity to be heard before the rejection of its applications for registration under sections 12A and 80G. The assessee requested one last chance to defend its case and for the matter to be remitted back to the CIT(E), assuring full compliance with statutory notices. The revenue, through the CIT(DR), relied upon the orders of the lower authorities.

Which sections of the Income-tax Act were involved?

Section 12AB(1)(b)(ii),Section 80G,Section 12A(1)(ac)(ii)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI

Before: MS. KAVITHA RAJAGOPAL

Pronounced: 15.07.2026

आयकर अपीलीय अिधकरण, िद�ी पीठ�, नई िद�ी INCOME TAX APPELLATE TRIBUNAL, DELHI BENCHES, ‘G’ NEW DELHI BEFORE MS. KAVITHA RAJAGOPAL, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER ITA Nos.3056 and 3057/DEL/2026 (िनधा�रण वष�/Assessment Year: -) V S JAIN CHARITABLE TRUST CIT (E), CHANDIGARH-, CHANDIGARH 6 GREEN PARK HISAR, HISAR, Vs. HARYANA-125001 अपीलाथ� Appellant ��थ� Respondent Permanent Account Number of Assessee: AAATV0656P अपीलाथ� �ारा/Appellant represented by: CA Niraj Jain & CA P. K. Mishra ��थ� �ारा/Respondent represented by: Shri Manav Bansal, CIT(DR) सुनवाई की तारीख / Date of conclusion of hearing: 15.07.2026 घोषणा की तारीख / Date of pronouncement: 15.07.2026 आदेश / ORDER PER AMITABH SHUKLA, AM These two appeals by the assessee are directed against the orders of the Ld. Commissioner of Income Tax (Exemption), Chandigarh, [hereinafter referred to as ‘ld. CIT(E)] both dated 13.03.2026 passed under section 12AB(1)(b)(ii) and 80G of the Income Tax Act, 1961. The word ‘Act’ herein this order would mean Income Tax Act, 1961. 2. The appeal of the assessee vides ITA No.3056/Del/2026 is regarding the rejection of its request filed under section 12A(1)(ac)(ii) of the Act. The appeal of the assessee vides ITA No.3057/Del/2026 is regarding the rejection of its request filed under section 80G(5)(ii) of the Act. As both the appeals are of the same assessee concerning common issues of rejection of its application under

ITA 3056/DEL/2026 V S JAIN CHARITABLE TRUST section 12A and 80G, they were heard together and for the purposes of convenience, adjudicated by this common order.

3.

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 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). The ld. Counsel assured that full compliance shall be made to the statutory notices issued by the Revenue authorities.

4.

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

5.

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 on premise of non-supply of requisite documents by the appellant. In para-4.3 of the order, it has been written that the assessee has failed to file a substantive reply to explain how the activities reflected in the financial statements constitute charitable activities or demonstrating that the trust has carried out actual charitable work over a prolonged period of time. The relevant paragraph of the order of the ld. CIT(E) is reproduced hereunder:-

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ITA 3056/DEL/2026 V S JAIN CHARITABLE TRUST “4.3 Thus, the financial statements do not support the contention of the applicant that it has been engaged in genuine charitable activities. Despite being provided an opportunity through the show cause notice, no substantive reply has been furnished explaining how the activities reflected in the financial statements constitute charitable activities or demonstrating that the trust has carried out actual charitable work over a prolonged period of time. 5. In view of the foregoing, the case has not been found to be a fit case for registration as charitable institution. Accordingly, the undersigned is of the considered view that financials of the trust do not corroborate the claim of the applicant that it has been carrying out charitable activities for a long period of time. The activities reflected in the accounts are limited and sporadic in nature and do not establish the genuineness of charitable activities as required under section 12AB of the Income-tax Act, 1961. Accordingly, the present application of the applicant filed in Form 10AB u/s 12A(1)(ac)(ii) of the Act is rejected and registration is cancelled for the above discussed reasons.” 6. We are of the considered view that reasonable opportunity of being heard is right of every tax payer. 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 adjudication de novo in accordance with law. Due opportunity of being heard shall be given to the assessee. The assessee shall comply with all the statutory notices and any non-compliance shall be adversely viewed. Accordingly, the appeals of the assessee vide ITA No.3056/Del/2026 and vide ITA No. 3057/Del/2026 are allowed for statistical purposes.

7.

Finally, both the appeals of the assessee are allowed for statistical purposes.

Order pronounced in the open court on 15th July, 2026.

Sd/- Sd/- [KAVITHA RAJAGOPAL] [AMITABH SHUKLA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 25.09.2026 Shekhar

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ITA 3056/DEL/2026 V S JAIN CHARITABLE TRUST Copy forwarded to: 1. Appellant 2. Respondent 3. PCIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi,

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