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Facts
The assessee, Ideal Educational Trust, obtained provisional registration under Section 80G. Subsequently, it applied for final registration under Section 80G (Form 10AB), which the CIT (Exemption) rejected, cancelling the existing registration. The CIT(E) cited non-response to show-cause notices and the assessee's failure to obtain registration under Section 12A/12AB of the Act. The assessee contended that it had not received the notices via email.
Held
The Tribunal found that the CIT(E) rejected the application without affording the assessee a proper opportunity of being heard, thus violating principles of natural justice. Consequently, the Tribunal set aside the CIT(E)'s order and remanded the matter back to the CIT(E) for fresh adjudication, directing that the assessee be given another opportunity to present its case.
Key Issues
Whether the CIT(E) was justified in rejecting the assessee's application for final registration under Section 80G and canceling its registration without providing a proper opportunity of hearing, and whether the alleged failure to obtain registration under Section 12A/12AB was a valid ground for rejection.
Sections Cited
80G(5), 12AB, 12A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI
Before: SHRI MANU KUMAR GIRI & SHRI JAGADISH
आदेश / O R D E R
PER MANU KUMAR GIRI, JM:
This is an appeal preferred by the assessee against the order of the Learned Commissioner of Income Tax (Exemption), (in short ‘the Ld.CIT(E)’), Chennai, dated 23.12.2024 for the Assessment Year (in short ‘AY’) 2024-25 in rejecting the application in Form No.10AB under clause (iii) of first proviso to section 80G(5) seeking registration u/s 12AB of the Income-tax Act, 1961 (hereinafter “the Act”).
(AY 2024-25) Ideal Educational Trust 2. The registry has noted delay of ‘69’ days in filing the appeal. Considering the period of delay and reasons pleaded, we condone the delay and admit the appeal for adjudication.
The brief facts of the case are that the assessee is Educational trust registered under the provisions of the Indian Trust Act and had filed Form 10A for obtaining provisional registration and Under Section 80G on 19.08.2021 and the registration was approved by the PCIT/CIT (Exemptions) on 24.09.2021 from 24.09.2021 to AY 2024-25. The assessee trust had filed for final registration in Form 10AB on 28.06.2024 under Section 80G of the Income Tax Act, 1961. The CIT (Exemptions) has passed his order in Form 10AD rejecting the application Under Section 80G and cancelling the registration on 23.12.2024 stating that the assessee trust did not respond to the show cause notices issued to verify the details regarding the trust without giving opportunity of being heard to the assessee in violation of principles of natural justice.
The ld.CIT(E) while rejecting the application Under Section 80G held as under:
4.1 There was no response from the applicant till date. As such, the applicant failed to offer any satisfactory explanation in spite of affording sufficient opportunity.
(AY 2024-25) Ideal Educational Trust 4.2. As explained in para 1 of this order, as per the provisions of clause (iii) of first proviso to section 80G(5), under which the applicant has filed the present Form No.10AB, the applicant is mandatorily required to be registered u/s 12A/12AB of the Act. But, in the instant case the applicant has failed to get registration u/s 12A/12AB of the Act and obtain Form No.10AC. Hence, the applicant is not entitled to file application in Form No. 10AB under clause (iii) of first proviso to section 80G(5).
The Ld. Authorized Representative (A.R) of the assessee has submitted that Ld. CIT(E) has rejected the application without assessee submitting reply to the show cause notice therefore, one more opportunity may be provided to substantiate his case before Ld. CIT(E).
The Ld. Departmental Representative (DR), on the other hand, has relied on the orders of the Ld. CIT(E) .
We have heard the rival contentions, perused the materials available on record. On perusal of the order of Ld. CIT(E), we find that the Ld. CIT(E) has rejected the application in Form No.10AB u/s.80G(5)(iii) of the Act seeking approval u/s.80G of the Income-tax Act, 1961 as the assessee has failed to furnish any explanation of the show cause notice. The Ld. A.R has submitted that the Ld. CIT(E) has rejected the application without providing an opportunity to the assessee as the assessee has not received any notice through email and, therefore it is requested that the case may be remanded back to the Ld. CIT(E) for fresh adjudication. We are of the opinion that keeping in view the principles of natural justice, the assessee be provided with another opportunity of hearing to (AY 2024-25) Ideal Educational Trust substantiate his case before the Ld. CIT(E). Accordingly, we set aside the order passed by the Ld. CIT(E) and remit the matter back to the file of the Ld. CIT(E) to adjudicate this issue afresh in accordance with law. We also direct the assessee to appear before the Ld. CIT(E) on the date of hearing without fail and furnish complete details for his fresh consideration. In view of the above, the appeal filed by the assessee is allowed for statistical purposes only.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced on the 21st day of July, 2025, in Chennai.