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Facts
The assessee, an educational foundation, applied for 80G approval which the CIT(E) rejected for non-compliance with notices seeking documents, citing expiry of the limitation period. The assessee contended that non-compliance was due to technical issues, including a notice sent to an inactive trustee, and that merits were not considered.
Held
The Tribunal found that the CIT(E) rejected the application on technical grounds rather than merits. Citing High Court rulings against deciding on mere technicalities, the Tribunal allowed the appeal for statistical purposes and remitted the case back to the CIT(E) to grant the assessee another opportunity to submit documents and decide the application on merits.
Key Issues
Whether the CIT(E) was justified in rejecting the 80G approval application on grounds of non-compliance with notices, without considering the merits of the case or providing adequate opportunity to the assessee.
Sections Cited
80G, 12A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH, MUMBAI
(Assessment Year: 2025-26) Adv. Chandrabali Singh Educational CIT (Exemptions) 6th Floor, Cumballa Hill, MTNL, Foundation 701, J. P. Residency, Chincholi Bunder Vs. Mumbai – 400026. Road, Mumbai – 400064. PAN/GIR No. AADTA3868K (Appellant) : (Respondent) Assessee by : Shri. Hemant Sharma (Virtually appear) : Shri. Ram Krishn Kedia (SR. DR.) Respondent by Date of Hearing : 15.04.2025 Date of Pronouncement : 30.04.2025 O R D E R Per Kavitha Rajagopal, J M: This appeal has been filed by the assessee, challenging the order of the learned Commissioner of Income Tax (Exemptions), Mumbai (‘ld. CIT(E)’ for short), rejecting the application made by the assessee in form 10AB u/s 80G(5)(iii) for seeking approval u/s. 80G of the Income Tax Act, 1961 (‘the Act'), vide order dated 26.07.2024.
It is observed that this appeal has been filed belatedly with a delay of 120 days beyond the period of limitation for which the assessee had filed an affidavit for condoning the said delay. On perusal of the same, we deem it fit to hold that the assessee had ‘sufficient cause’ for the delay and we therefore condone the delay caused in filing the present appeal.
(A.Y. 2025-26) Adv Chandrabali Singh Educational Foundation 3. The assessee has raised the following grounds of appeal: “Ground 1. Natural justice violated & no application of mind. The order rejecting the application seeking approval u/s 80. G is erroneous in law, as held by Hon’ble SC in Malabar Industrial Co Ltd, being passed: a) in violation of principle of natural justice, without issuing a show-cause notice and b) ignoring data already on record, an instance of no application of mind. Ground 2. Personal hearing thru VCF not granted, despite passing adverse order The ld. CIT (E) failed to grant a personal hearing thru video conferencing, a requirement of natural justice, in passing an adverse order, as held by Hon’ble Allahabad HC in Satish Kumar Bansal HUF. The order deserves to be quashed. Ground 3. The assertion by ld. CIT (E) that “Approval under section 80G is to be accorded to the applicant after satisfying oneself of the genuineness of activities” ignores the fact that audit of accounts by a CA, establishes genuineness of activities, unless evidence to the contrary is on record. The order deserves to be quashed. Ground 4. Without prejudice to the above grounds, Your Lordship is pleaded to apply the judgment of Delhi bench of Hon’ble Tribunal in Dhananjay Sanjogta Foundation, where the matter was remitted back to CIT (E) in view of request of appellant for grant of an opportunity to provided necessary documents and submissions to CIT(E).”
4. Brief facts of the case are that the assessee is a trust registered under the Bombay Public Trust Act 1950 on 23.11.2011. The assessee had applied for approval u/s. 80G of the Act in form 10AB. The ld. CIT(E) observed that the assessee’s application was incomplete as the assessee has failed to furnish all the relevant documents, for which the ld. CIT(E) had issued notice dated 06.06.2024 requesting for furnishing documents as per Rule 11AA(2) of the Income Tax Rules, 1962. The assessee had duly submitted the necessary documents dated 27.06.2024 and on perusal of the same, the ld. CIT(E) again issued the notice dated 20.07.2024 to the assessee to provide details of expenses with supporting documentary evidences and copy of old registration/approval u/s. 12A (A.Y. 2025-26) Adv Chandrabali Singh Educational Foundation & 80G of the Act before 01.04.2021. The ld. CIT(E) then vide order dated 26.07.2024 rejected the application seeking approval u/s. 80G of the Act, for the reason that the assessee has not made compliance to the notice dated 20.07.2024 as the limitation to decide the said application was getting time barred on 31.07.2024.
2. Aggrieved the assessee is in appeal before us, challenging the impugned order of the Ld. CIT(E).
The learned Authorised Representative ('ld. AR' for short) for the assessee contended that the reasons stated by the ld. CIT(E) in the impugned order is not justifiable for the reason that the assessee has very much complied with the notice issued by the ld. CIT(E). The ld. AR stated that the second notice dated 20.07.2024 was sent on the email id of Shri. Mahendra Joshi, a trustee who was not actively involved due to his health reasons. Therefore, the said notice could not be forwarded to the assessee and hence it could not be responded by the assessee. The ld. AR further stated that the details sought for by the ld. CIT(E) was already on record. The ld. AR also prayed that the assessee may be given one more opportunity before the ld. CIT(E).
The learned Departmental Representative (‘ld. DR’ for short) on the other hand controverted the said fact and stated that the assessee has not complied with the notice dated 20.07.2024. The ld. DR reiterated that the ld. CIT(E) has rightly rejected the assessee’s application and prayed that the order of ld. CIT(E) be upheld.
We have heard the rival submissions and perused the material available on record. It is observed that the ld. CIT(E) had not decided the assessee’s application for registration u/s. 80G was rejected for non-compliance of the terms of the notices and not on the (A.Y. 2025-26) Adv Chandrabali Singh Educational Foundation merits of the application, as there are various decisions of the Hon’ble High Court where it has been held that such issues cannot be decided merely on technicalities rather the same has to be decided in accordance with the substantial provisions of law.
On the above facts, we deem it fit to provide the assessee trust with one more opportunity to present its application for registration u/s. 80G approval in the prescribed form along with all supporting documentary evidence before the ld. CIT(E) and the ld. CIT(E) is also directed to decide the application on the merits of the submission of the assessee trust and in accordance with law.