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Facts
The assessee, N Natarajan Charitable Trust, filed an application under Section 80G(5) of the Income-tax Act, 1961, seeking approval. The Commissioner of Income Tax (Exemptions) rejected this application, citing the assessee's failure to provide a satisfactory explanation despite being given opportunities. The assessee's representative contended before the Tribunal that adequate opportunity was not granted.
Held
Considering the principles of natural justice, the Tribunal set aside the CIT(E)'s order. The matter was remitted back to the CIT(E) with a direction to provide the assessee with another opportunity to be heard and to examine the application afresh in accordance with law.
Key Issues
Whether the CIT(E) was justified in rejecting the application for Section 80G(5) approval without granting adequate opportunity to the assessee, and if the principles of natural justice necessitate another opportunity to substantiate the claim.
Sections Cited
80G, 80G(5)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘D’ BENCH: CHENNAI
Before: SHRI SS VISWANETHRA RAVI & SHRI JAGADISH
आदेश / O R D E R
PER JAGADISH, A.M : Aforesaid appeal filed by the assessee arises out of the order of Learned Commissioner of Income Tax (Exemption), Chennai [hereinafter “CIT(A)”] dated 24.12.2024.
The assessee has filed an application on 14.06.2024 in Form No.10AB under Rule 11AA of the Income Tax Rules, 1962 (hereinafter “the Rules”), seeking approval under clause (iii) of first proviso to sub section (5) of Section 80G of the Income-tax Act, 1961 (hereinafter
ITA No.625/Chny/2025 :- 2 -:
“the Act”). However, the Ld. CIT(E) rejected the application on the ground that the assessee failed to offer any satisfactory explanation, despite having been afforded sufficient opportunity.
The Ld. Authorized Representative (A.R) of the assessee before us has submitted that assessee trust is primarily engaged in conducting moot court competitions for law students and organizing similar competitions in India, but the assessee could not furnish supporting evidence at the relevant time. The Ld. AR therefore, prayed that one more opportunity be provided to the assessee to substantiate its claim.
The Ld. Departmental Representative (DR), on the other hand, supported the order passed by the Ld. CIT(E) in rejecting the application as the assessee has not complied with the notices issued.
We have heard the rival submissions, and perused the materials available on record. It is noted that the Ld. CIT(E) had rejected the application filed by the assessee seeking approval under clause (iii) of first proviso to sub section (5) of Section 80G of the Act on account of assessee’s failure to provide satisfactory explanation regarding its activities. However, before us, the Ld. AR has contended that adequate opportunity was not granted by the Ld. CIT(E) to produce the :- 3 -: necessary details. In the interest of justice and considering principles of natural justice, we are of the view that the assessee be provided with another opportunity of hearing to substantiate its case before the Ld. CIT(E). Accordingly, we set aside the order passed by the Ld. CIT(E) and remit the matter to his file with a direction to examine the application afresh, after providing due opportunity of being heard to the assessee in accordance with law. We also direct the assessee to appear before the Ld. CIT(E) on the date of hearing without fail. In view of the above, the appeal filed by the assessee is allowed for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced on 30th April, 2025.