SHREE CHANDRALA EDUCATIONAL AND CHARITABLE PUBLIC TRUST,GULBARGA vs. COMMISSIONER OF INCOME TAX(EXEMPTIONS), BANGALORE

This is an appeal filed by the assessee against CIT(E)’s Order vide DIN &Letter No: ITBA/COM/F/17/2024-25/107069443(1) dated 27.11.2024 against the rejection of application filed by the assessee for registration under section 12AB of the Act.

The learned Counsel reiterated the submissions made before the lower authorities and submitted that the assessee is involved in charitable activity and entire details were submitted before the Jurisdictional AO (JAO) and the JAO and range head have submitted report to the CIT(E). The ld. CIT(E) has rejected the application filed by the assessee in Form No.10AB dated 11.07.2024 without giving proper opportunity of hearing to the assessee and the lower authorities have not doubted on the activities of the assessee. The learned DR relied on the Order of the CIT(E) and observation of the AO and range head quoted in the Order.

Considering the rival submissions, we noted that the assessee has filed Form No.10AB on 11.07.2024 for registration under section 12AB of the Act and the case was assigned to the JAO for verification. The JAO issued notice and assessee filed reply. The JAO and range head did not recommend for grant of registration to the assessee. However, the Act mandates that before rejecting the application an opportunity should be given to the assessee. As per secton12AB(1)(b)(ii)(B) of the Act “after affording reasonable opportunity of being heard”, we note that the learned CIT(E) has not given any opportunity to the assessee after receipt of the report of the JAO which is clear from the rejection Order. After considering the facts of the case and in the interest of justice, we remit the issue back to the file of CIT(E) for fresh consideration after giving reasonable opportunity of being heard to the assessee and assessee is directed to substantiate its case with cogent materials and is further directed not to seek unnecessary adjournment for early disposal of the case. In case of failure, no second leniency shall be granted to the assessee.