DHANRAJ MISRILAL SURANA TRUST,CHENNAI vs. CIT EXEMPTIONS, CHENNAI

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ITA 3734/CHNY/2026Status: DisposedITAT Chennai12 October 20264 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(E)'s action of issuing a final show cause notice on 24.03.2026 and passing the impugned order on 30.03.2026, within a short span of six days, was not justifiable, especially considering the assessee's prior compliance. The Tribunal found that the assessee ought to have been granted a reasonable opportunity to explain its position and adduce evidence to substantiate its claim of genuine charitable activities. Consequently, the Tribunal was inclined to grant one more opportunity to the assessee. The impugned orders of the CIT(E) were set aside, and the applications were restored to the file of the CIT(E) for fresh processing after hearing the assessee. The assessee was directed to file all relevant documents and provide explanations for the queries raised by the CIT(E) on 24.03.2026, and the CIT(E) was directed to pass an order in accordance with law after hearing the assessee. The appeals were allowed for statistical purposes.

What were the facts?

The assessee, Dhanraj Misrilal Surana Trust, filed appeals against the order of the Commissioner of Income Tax (Exemption) [CIT(E)], Chennai, dated 30.03.2026. The CIT(E) had denied registration under section 12AB and approval under section 80G of the Income Tax Act, 1961. The assessee's primary contention was that the CIT(E) passed the order without providing a proper opportunity to be heard. The assessee had filed its application on 27.09.2025, responded to a questionnaire on 30.01.2026, and submitted documents. A show cause notice was issued on 24.03.2026, to which the assessee responded within six days. However, the CIT(E) passed the impugned order on 30.03.2026, allegedly in haste, preventing the assessee from uploading its reply to the income tax portal.

What were the issues?

1. Whether the Learned Commissioner of Income Tax (Exemption) denied registration under section 12AB and approval under section 80G of the Income Tax Act, 1961, without affording a reasonable opportunity of being heard to the assessee? (Question of law and fact, turning on Section 12AB and Section 80G). Assessee's Contention: The assessee argued that the CIT(E) passed the impugned order in undue haste, within six days of issuing a show cause notice, despite the assessee diligently responding to earlier notices. The assessee claimed that the income tax portal did not permit the uploading of its reply, and therefore, it was denied a proper opportunity to present its case. The assessee sought one more opportunity before the CIT(E). Revenue's Contention: The Revenue's representative (Ld. DR) could not contradict the facts presented by the assessee, which were evident from the perusal of the impugned order.

Which sections of the Income-tax Act were involved?

Section 12AB,Section 80G

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘D’ BENCH: CHENNAI

Before: SHRI ABY T. VARKEY & MS. PADMAVATHY. S

Hearing: 25.08.2026Pronounced: 12.10.2026

आदेश / O R D E R PER ABY T. VARKEY, JM: These are appeals preferred by the assessee against the order of the Learned Commissioner of Income Tax (Exemption), (hereinafter referred to as ‘Ld. CIT(E)’), Chennai, dated 30.03.2026 denying registration u/s. 12AB of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) and approval u/s.80G of the Act.

ITA 3733 & 3734 /Chny/2026 Dhanraj Misrilal Surana Trust :: 2 :: 2. The main grievance of the assessee is that the Ld. CIT(E) has passed the impugned order without giving proper opportunity to the assessee. In this regard, he brought to our notice that it filed its application for registration on 27.09.2025 and pursuant to questionnaire issued by the Ld. CIT(E) on 04.01.2026, assessee filed its submission on 30.01.2026 along with all the documents called for by the Ld. CIT(E). According to the Ld. AR, the Ld. CIT(E) issued show cause notice on 24.03.2026 asking for several details which assessee gathered and filed within 6 days, but the Ld. CIT(E) had passed the order in tearing hurry on 30.03.2026 itself and consequently, the income tax portal didn’t allow assessee to upload the details. Hence, his reply could not be uploaded and therefore, pleads for one more opportunity before the Ld. CIT(E).

3.

The Ld. DR could not contradict the aforesaid facts which are evident from perusal of the impugned order.

4.

We find that the Ld. CIT(E) has given a final show cause notice on 24.03.2026 and passed the impugned order on 30.03.2026 i.e. within 6 days which action cannot be countenanced, considering the earlier conduct of assessee responding to notices issued by the Ld. CIT(E). According to us, assessee ought to have been granted reasonable opportunity of explaining/adducing evidences to substantiate its claim of carrying out genuine charitable activity to achieve its objectives. Hence,

ITA 3733 & 3734 /Chny/2026 Dhanraj Misrilal Surana Trust :: 3 :: we are inclined to grant one more opportunity to assessee. Hence, we set aside the impugned orders of the Ld. CIT(E) and restore the applications back to the file of Ld. CIT(E) with a direction to process the applications afresh after hearing the assessee. The Ld. AR is directed to file all the relevant documents and explain the queries called for by the Ld. CIT(E) vide notice on 24.03.2026 without fail and the Ld. CIT(E) to pass the order in accordance to law after hearing the assessee.

5.

In the result, appeals of the assessee are allowed for statistical purposes.

Order pronounced on the 12th day of October 2026, in Chennai.

Sd/- Sd/-

(प�ावती .एस) (एबी टी. वक�) (PADMAVATHY. S) (ABY T. VARKEY) लेखा सद�य/ACCOUNTANT MEMBER �या�यक सद�य/JUDICIAL MEMBER चे�नई/Chennai, �दनांक/Dated: 12th October, 2026. YS आदेश क� ��त�ल�प अ�े�षत/Copy to: 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT, Chennai / Madurai / Salem / Coimbatore. 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF YASHVIR Digitally signed by YASHVIR SINGH SINGH Date: 2026.10.16 14:52:15 +05'30'

ITA 3733 & 3734 /Chny/2026 Dhanraj Misrilal Surana Trust :: 4 ::

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