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Facts
The assessee trust applied for registration under Section 12AB, having a provisional registration. The application was rejected by the CIT(E) for non-compliance with statutory notices.
Held
The Tribunal held that the opportunity of being heard is a fundamental right and the CIT(E) passed a stereotyped order without proper adjudication. The order of the CIT(E) was set aside for fresh adjudication.
Key Issues
Whether the CIT(E) erred in rejecting the application for registration without providing adequate opportunity of being heard, and if the matter should be remanded.
Sections Cited
12A, 12AB
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Income Tax Appellate Tribunal, ‘D’ BENCH: CHENNAI
Before: HON’BLE SHRI MANU KUMAR GIRI & HON’BLE SHRI AMITABH SHUKLA
प्रत्यर्थी की ओर से /Revenue by : Shri ARV Sreenivasan, CIT सुनवाई की तारीख/Date of Hearing : 25.08.2025 घोषणा की तारीख /Date of Pronouncement : 25.08.2025 आदेश / O R D E R PER AMITABH SHUKLA, A.M :
This appeal is filed by the assesseee against the order bearing DIN & Order No.ITBA / EXM / F / EXM45 / 2025-26 / 1076662465(1) dated 03.06.2025 of the Learned Commissioner of Income Tax (Exemption) [herein after “CIT(E), Chennai. The reference to the word “Act” in this order hereinafter shall mean the Income Tax Act, 1961 as amended from time to time.
2.0 The only issue raised through its grounds of appeal is regarding the denial of exemption u/s 12A by the Ld.CIT(E ) on the premise that the assesseee trust did not comply with the statutory notices issued by him.
3.0 Brief facts of the case are that the assesseee trust, registered under the society Act had applied for grant of registration u/s 12AB through online application dated 11.12.2024. The assesseee trust was in possession of a provisional registration granted by the Revenue. The impugned application was rejected by the Ld.CIT(E) through its order dated 03.06.2025 for non-compliance to statutory notices. The impugned order is being contested before us through this appeal.
4.0 The Ld.Counsel for the assesseee has argued that the Ld.CIT(E) has not accorded due opportunity being heard. It was argued that its application was mechanically dismissed for non-compliance for the limitation period expiring on 30.06.2025. The Ld.Counsel submitted that admittedly, compliance could not be made because of contemporaneous preoccupation in other activities of the trust. The Ld.Counsel accordingly requested that the matter may be remanded back to the Ld.CIT(E ) for readjudication by giving one last opportunity. The Ld.Counsel personally assured that full compliance now would be made.
Page - 2 - of 4 5.0 Per contra, the Ld.DR relied upon the order Ld.CIT(E). It was however argued that remission if any may be made by imposing costs upon the assessee for wasting the precious time of the Courts.
6.0 We have heard rival submissions in the light of material available on records. We find sufficient force in the arguments of the appellant assessee. At the outset, we have noted that the Ld.CIT(E) has passed a stereotyped order recording assessee’s non-compliance and the fact of limitation period expiring on 30.06.2025. A unilateral conclusion cannot be basis for a judicious decision. It is trite law that opportunity of being heard is the basic right available to a litigant and cannot be taken away unilaterally. Accordingly, we set aside the order of the Ld.CIT(E ) and direct him to readjudicate the matter afresh by passing a speaking order, in accordance with law, and after giving due opportunity of being heard. The assesseee shall comply with all the notices issued by the Ld.CIT(E ). This order is however subject to payment of cost of Rs.5,000/-(Rupees five thousand only) by the assessee to the Tamil Nadu State Legal Services Authority at Hon’ble High Court of Madras within 30 days of the receipt of this order. Accordingly, all the grounds of appeal raised by the assesseee are allowed for statistical purposes.
Page - 3 - of 4 7.0 In the result, the appeal of the assesseee is allowed for statistical purposes.
Order pronounced on 25th , Aug-2025 at Chennai. Sd/- Sd/- (मनु कुमार धिरर) (अधमताभ शुक्ला) (MANU KUMAR GIRI) (AMITABH SHUKLA) न्याधयक सदस्य / Judicial Member लेखा सदस्य /Accountant Member चेन्नई/Chennai, धदनांक/Dated: 25th , Aug-2025. KB/- आदेश की प्रतितिति अग्रेतिि/Copy to: 1. अिीिार्थी/Appellant 2. प्रत्यर्थी/Respondent 3. आयकर आयुक्त/CIT - Chennai/Coimbatore/Madurai/Salem. 4. तिभागीय प्रतितिति/DR 5. गार्ड फाईि/GF
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