TALK TO ME ,MUMBAI vs. CIT (EXEMPTION), MUMBAI

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ITA 1372/MUM/2025Status: DisposedITAT Mumbai24 April 20254 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the Learned CIT(E) was not justified in rejecting the assessee's application solely on a technical defect, especially without providing any show cause notice or opportunity to the assessee. The Tribunal found that the rejection violated the principles of natural justice. Consequently, the order of the CIT(E) was set aside. The CIT(E) was directed to reconsider the matter afresh and decide the assessee's application on its merits. This reconsideration must include affording the assessee a due opportunity to rectify any errors in the application if required. The Tribunal did not decide on the merits of the registration itself, as the matter was remanded for fresh consideration.

What were the facts?

The assessee, an appellant, filed an appeal before the Income-Tax Appellate Tribunal (ITAT), Mumbai, challenging an order dated 29.12.2024 passed by the Learned Commissioner of Income-tax (Exemption), Mumbai (CIT(E)). The assessee had applied for final registration under Section 80G(5) of the Income-tax Act, 1961, in Form 10AB on 30.06.2024. The CIT(E) rejected the application, stating that the assessee had wrongly applied under subclause (iv) instead of subclause (iii) of the first proviso to Section 80G(5), and that subclause (B) of clause (iv) was not applicable. The assessee contended that the rejection was based on a technical error and was made without granting an opportunity to be heard, violating principles of natural justice.

What were the issues?

1. Whether the Learned CIT(E) erred in rejecting the application for final registration under Section 80G(5) of the Income-tax Act, 1961, without granting an opportunity to be heard, as required by the second proviso to Section 80G(5), thereby violating the principle of natural justice? 2. Whether the Learned CIT(E) erred in rejecting the application by relying on conditions specified in sub-clause (B) of the first proviso to Section 80G(5), which stipulated that the trust should not have claimed exemption under Sections 11, 12, or 10(23C) prior to the application, when this condition was deleted with effect from 01.10.2024, rendering the rejection invalid? 3. Whether the Learned CIT(E) erred in rejecting the registration under Section 80G based on an inadvertent error in selecting the correct sub-section while filing Form 10AB, thereby leaving the appellant without remedy? Assessee's Contentions: The assessee argued that the rejection was made without providing any opportunity to be heard, violating natural justice. They also contended that the condition cited by the CIT(E) regarding prior exemption claims had been deleted from the relevant sub-clause. Furthermore, the assessee claimed that the rejection was based on a mere technical or inadvertent error in selecting the sub-section, which should not have led to the application being dismissed without a chance for rectification. Revenue's Contentions: The Revenue's representative did not object to the assessee's proposition.

Which sections of the Income-tax Act were involved?

Section 80G(5),Section 11,Section 12,Section 10(23C)

AI-generated summary — verify with the full judgment below

Before: MS. KAVITHA RAJAGOPAL & SMT. RENU JAUHRI

For Appellant: Ms. Kinjal Bhuta, Shri Biswanath Das
For Respondent: Shri Biswanath Das
Hearing: 17.04.2025Pronounced: 24.04.2025

सुिवधई की िधरीख / Date of Hearing 17.04.2025 घोर्णध की िधरीख/Date of Pronouncement 24.04.2025 आदेश / O R D E R PER RENU JAUHRI [A.M.] :- This appeal is filed by the assessee against the order of the Learned Commissioner of Income-tax (Exemption), Mumbai [hereinafter referred to as “CIT(E)”] dated 29.12.2024. u/s. of the Income-tax Act, 1961 [hereinafter referred to as “Act”].

2.

The assessee has raised the following grounds of appeal:

Talk to me “1. The Learned CIT(E) erred in rejecting the application for final registration u/s. 80G(5) of the Income Tax Act, 1961 without granting any opportunity to be heard in this matter as required under the second proviso to section 80G(5) of the Act. That not giving opportunity is against the principle of natural justice and the order may be set aside.

2. The Ld. CIT(E) erred in rejecting the application relying on conditions specified in sub clause (B) of first proviso to section 80G(5), that the application can be made under this clause only if the trust has not claimed any exemption u/s. 11, 12 or 10(23C) before the date of application. The Ld. CIT(E) erred in not appreciating that the said condition has been deleted from sub- clause B with effect from 01" October, 2024 and rejection owing to non- compliance to such condition is invalid and illegal.

3.

The Ld. CIT(E) erred in rejecting the registration u/s. 80G merely on an inadvertent error in selecting the correct sub-section while filing the application for final registration in Form 10AB leaving the appellant remedy less. That rejecting the application based on an error/technical irregularity is unjustified.

4.

The appellant craves to leave, add, amend or alter the grounds of appeal

.”

3. Brief facts of the case are that the assessee filed an application for filing registration u/s 80G(5)(iv)(B) in Form 10AB on 30.06.2024. The assessee made requisite compliance with the notices issued by Ld. CIT(E). However, vide order dated 29.12.2024, Ld. CIT(E) rejected the assessee’s application on the ground that subclause B of clause (iv) of the first proviso to Section 80G(5) does not apply, and the assessee had wrongly made the application under subclause (iv) instead of subclause (iii).

4. Aggrieved with the order of Ld. CIT(E), the assessee has filed an appeal before the Tribunal. It has been submitted that no show cause or opportunity was given before rejecting the assessee’s application by Ld. CIT(E). Ld. AR has submitted that the assessee made an inadvertent error in selecting the subclause while filing the application. Ld. CIT(E) did not give any opportunity to the assessee to rectify the technical irregularity, thereby leaving the assessee Talk to me remedy less. He has, therefore, requested for setting aside the order of the Ld. CIT(E) and giving an opportunity for fresh consideration of his application. Ld. DR has not objected to the above proposition.

5.

We have heard the rival submissions and perused the material available before us. We are of the view that Ld. CIT(E) was not justified in rejecting the application merely on a technical defect, more so, without giving any show cause or opportunity to the assessee. We, therefore, deem it appropriate to set aside the order of Ld. CIT(A). He is directed to consider the matter afresh and decide the assessee’s application on merits after affording due opportunity to the assessee to rectify the error in the application, if required.

6.

In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 24.04.2025.

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