Loading judgment…
Facts
The assessee filed an application for approval under section 80G, which was rejected by the CIT(E) for failing to establish genuineness and compliance. The assessee claimed they were not given a reasonable opportunity and missed responding to a second notice due to an adjournment not being considered.
Held
The Tribunal found that the CIT(E) ought to have examined the available material and provided a reasonable opportunity. The principles of natural justice were not followed. Therefore, the order was set aside for fresh adjudication.
Key Issues
Whether the CIT(E) erred in rejecting the application for approval under section 80G without providing a reasonable opportunity to the assessee. Whether principles of natural justice were violated.
Sections Cited
80G, 80G(5), 80G(5)(iii)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “ C ” BENCH, AHMEDABAD
Before: SHRI T.R. SENTHIL KUMAR & SHRI MAKARAND V. MAHADEOKAR
PER MAKARAND V. MAHADEOKAR, AM: ] ] This appeal has been filed by the assessee against the order of the Ld. Commissioner of Income Tax (Exemption), Ahmedabad [hereinafter referred to as "CIT(E)"] dated 21-11-2024, rejecting the application for approval under section 80G of the Income Tax Act, 1961 [hereinafter referred to as “the Act"].
. Indigive Foundation vs. CIT(Exemption)
Facts of the Case
The assessee, Indigive Foundation, filed an application in Form No. 10AB seeking approval under section 80G(5)(iii) of the Act. The Ld. CIT(E) issued a notice dated 20-09-2024, fixing the date of hearing on 07-10-2024. In response, the assessee filed a reply on 07-10-2024, seeking an adjournment. However, the adjournment request was not considered. Thereafter, a second notice was issued on 07-11-2024, but the assessee missed responding to it. Consequently, the Ld. CIT(E) rejected the application on the ground that the assessee failed to establish the genuineness of its activities and compliance with clauses (i) to (v) of section 80G(5) of the Act.
Aggrieved by the said order, the assessee has preferred the present appeal before us with following grounds of appeal -
1. 1. On the facts and in the circumstances of the case, respected C1T Exemption has erred in fact and in law in rejecting the application of approval u/s 80G of the Income Tax Act, 1961 on the ground of non-satisfaction about genuineness of activities of the institution.
2. On the facts and in the circumstances of the case, respected CIT Exemption has erred in fact and in law in rejecting the application of approval u/s 80G of the Income Tax Act, 1961 on the ground of non-satisfaction about the fulfillment of all the conditions laid down in clauses (i) to (v) of section 80G(5) of the act.
3. The appellant was not given reasonable opportunity to provide the necessary details, documents and information in support of its application for approval u/s 80G of the act. 4. Respected CIT Exemption has erred in fact and in law in rejecting the application of approval u/s 80G of the Income Tax Act, 1961 without considering the material and documents available on record. 5. The appellant prays to reserve its right to add, alter or withdraw any grounds of appeal till the time of final hearing.
During the course of hearing, the Ld. Authorised Representative (AR) submitted that the assessee duly filed a reply on 07-10-2024, seeking an . Indigive Foundation vs. CIT(Exemption)
3 adjournment in response to the notice dated 20-09-2024. However, the Ld. CIT(E) did not consider the request and proceeded ex parte. The Ld. AR further submitted that while the assessee inadvertently missed responding to the second notice, the Ld. CIT(E) ought to have decided the application on the basis of the material already available on record. Instead, the application was summarily rejected without proper consideration. The Ld. AR, therefore, requested that the order of the Ld. CIT(E) be set aside and the matter be restored for fresh adjudication.
The Ld. Departmental Representative (DR) fairly conceded that only two notices were issued by the Ld. CIT(E) and did not object to the matter being restored for fresh adjudication.
We have heard the rival contentions and perused the material available on record. It is an admitted fact that the assessee filed a reply on 07-10-2024 in response to the first notice dated 20-09-2024, seeking an adjournment. However, the adjournment was not considered by the Ld. CIT(E). Further, the assessee missed responding to the second notice. The rejection of the application under section 80G(5) was primarily based on non-satisfaction of the genuineness of activities and non-fulfillment of statutory conditions. However, we find that the Ld. CIT(E) ought to have examined the material already available on record before arriving at a conclusion. The principles of natural justice require that adequate opportunity be provided before rejecting an application, particularly when an assessee has sought an adjournment in response to the initial notice.
The Ld. DR has also not objected to restoring the matter to the file of the Ld. CIT(E) for fresh adjudication. In view of these facts, we deem it . Indigive Foundation vs. CIT(Exemption) appropriate to set aside the order of the Ld. CIT(E) and restore the matter to his file for fresh consideration.
The Ld. CIT(E) is directed to examine the assessee’s application afresh after providing a reasonable opportunity of being heard and considering all material on record. At the same time, the assessee is also directed to cooperate with the proceedings and furnish the necessary documents as required by the Ld. CIT(E).
In light of the above discussion, we set aside the order of the Ld. CIT(E) and restore the matter to his file for fresh adjudication in accordance with law.
In the result the appeal is allowed for statistical purposes.
Order pronounced in the Open Court on 21stFebruary,2025 at Ahmedabad.