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Facts
The assessee filed an application in Form No.10AB seeking approval under Section 80G(5)(iii) of the Income-tax Act, 1961. The Ld. CIT(E) rejected this application, primarily due to an alleged failure by the assessee to respond to a show cause notice and because the application was not filed within the prescribed time limit, as the trust's activities commenced much earlier.
Held
The Tribunal condoned a 279-day delay in filing the appeal. It found that the Ld. CIT(E) had rejected the application without providing the assessee a proper opportunity of hearing, as the assessee claimed non-receipt of the show cause notice via email. Applying the principles of natural justice, the Tribunal set aside the Ld. CIT(E)'s order and remitted the matter back for fresh adjudication.
Key Issues
Whether the Ld. CIT(E) was justified in rejecting the assessee's application for Section 80G(5)(iii) approval without affording a reasonable opportunity of being heard, considering the assessee's claim of non-receipt of the show cause notice and the issue of timely application filing.
Sections Cited
80G(5), 80G(5)(iii), Rule 11AA of the IT Rules, 1962
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI
Before: SHRI MANU KUMAR GIRI & SHRI S.R.RAGHUNATHA
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 16.03.2024 in rejecting the application in Form No.10AB under clause (iii) of first proviso to section 80G(5) seeking approval u/s 80G(5)(iii) of the Income-tax Act, 1961 (hereinafter “the Act”).
(AY -) Dindigul Builders Trust 2. The registry has noted delay of ‘279’ days in filing the appeal. Considering the period of delay and reasons explained in the condonation petition, we condone the delay and admit the appeal for adjudication.
The assessee has filed an application dated 01.09.2023 in Form No.10AB under Rule 11AA of the IT Rules, 1962 seeking approval u/s.80G(5)(iii) of the Act. The Ld. CIT(E) has issued show cause notice on 02.01.2024 as to why the application dated 01.09.2023 in Form 10AB should not be rejected. The assessee has not received the aforesaid notice through email, however the Ld. CIT(E) rejected the application, as the assessee has failed to submit an explanation in response to the show cause notice holding it activities of the trust genuine. The ld. CIT(E) held as under:
4.1. It is an admitted fact that the applicant has submitted that it has commenced its activities on 02.08.2016. Further, during the present proceedings, the applicant/assessee has submitted copies of its accounts for FY 2020-21, 2021-22 and 2022-23. The above said facts clearly prove that the activities of the applicant/assessee have commenced long back. Even going by its submissions, the activities of the applicant/assessee has commenced on 02.08.2016 and the present application filed in Form No.10AB u/s 80G(5)(iii) of the Act has not been filed within the time limit prescribed therein and therefore the same is liable to be rejected.
The Ld. Authorized Representative (A.R) of the assessee has submitted that Ld. CIT(E) has rejected the application without assessee (AY -) Dindigul Builders Trust 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 seeking approval u/s.80G(5)(iii) of the Act 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 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.
(AY -) Dindigul Builders Trust 7. 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.