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Facts
The assessee, Punjab Defence and Security Relief Fund, appealed against the CIT(Exemptions)'s order rejecting its application for registration under Section 10(23C)(iii) for AY 2024-25. The rejection was based on the non-provision of a certificate, which the assessee contended was not required as it was constituted by a Gazetted notification.
Held
The Tribunal noted that the CIT(E) did not issue a show-cause notice and the order was not passed on merit. Emphasizing natural justice, the Tribunal remanded the case back to the CIT(E) for fresh adjudication on merits, ensuring the assessee is given due opportunity of hearing.
Key Issues
Whether the CIT(E) validly rejected the application for registration under Section 10(23C)(iii) without providing an opportunity of being heard and ignoring the assessee's constitution by gazetted notification, thus violating natural justice.
Sections Cited
10(23C)(iii)
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Income Tax Appellate Tribunal, CHANDIGARH BENCH, ‘B’, CHANDIGARH
Before: SHRI LALIET KUMAR & SHRI MANOJ KUMAR AGGARWAL
Order Per Laliet Kumar, JM : Appeal in this case has been filed by the assessee against the order dated 16.12.2024 passed by the Ld. CIT(Exemptions), Chandigarh for the Assessment Year 2024-25.
Grounds of appeal are as under:
1. 238-Chd-2025 Punjab Defence and Security Relief Fund, Chandigarh 2 1. That The Id. CIT(Exemption) is wrong in rejecting the application for registration u/s 10(23C) (iii) on the arbitrary ground that the certificate of registration of the assessee was not provided, ignoring the undisputed fact that the assessee is not required to obtain such a certificate, as it was constituted under the Gazetted notification issued by the Punjab Government vide No. 11538-HM-65/30522 dated 12th Sept 1965 and Notification number was clearly mentioned in the Rules & Regulations of the assessee fund, which were filed during the course of proceedings. Therefore, the rejection order passed u/s 10(23C) is bad-in-law and is liable to be quashed 2. The Id. CIT(Exemption) is wrong in rejecting the application for registration u/s 10(23C) (iii) without providing any opportunity of being heard, since show cause notice was not issued to the assessee, which is against the principle of natural justice and so, order passed is liable to be quashed.
At the very outset, ld. Counsel for the Assessee submitted that the Ld. CIT(E) has wrongly rejected the application of the Assessee u/s 10(23C) (iii) of the Income Tax Act, 1961 (in short 'the Act') without providing any opportunity of being heard. It has further been submitted that no show cause notice was issued to the Assessee
238-Chd-2025 Punjab Defence and Security Relief Fund, Chandigarh 3 which is against the principle of natural justice and thus, the order passed by the Ld. CIT(E) is liable to be quashed. Further, it has been submitted that the Assessee has a fair case on merit. It has also been submitted that the Assessee is not required to obtain a certificate of registration as it was constituted under the gazetted notification issued by the Punjab Govt vide no. 11538-HM- 65/30522 dt. 12.9.1965 and there was a mention of it in the Rules and Regulations, which was duly filed during the course of proceedings, therefore, the rejection order passed u/s 10(23C) is bad in law. The ld. Counsel for the Assessee also submitted that the matter may be remanded back to the CIT(E) for fresh adjudication.
Per Contra, the ld. DR relied on the order of the Ld. CIT(E).
We have considered the facts brought on record by the ld. Counsel for the Assessee and we have also gone through the order passed by the ld. CIT(E). We find that although the Assessee did not get show cause notice in question for which the order was passed, still then, the 238-Chd-2025 Punjab Defence and Security Relief Fund, Chandigarh 4 Ld. CIT(E) has not passed the order on merit on the basis of material available on record. Therefore, we are of this considered view that in order to have natural justice for the Assessee and in the fitness of things the matter should be remanded back to CIT(E) for adjudication afresh. Accordingly, the case is remanded back to the CIT(E) for adjudication afresh on merit, in accordance with law, on affording due and adequate opportunity of hearing to the Assessee. The Assessee, no doubt, shall cooperate in the fresh proceedings before the CIT(E). All pleas available under the law shall remain so available to the assessee. Ordered accordingly. The appeal of the Assessee is allowed for statistical purposes.
In the result, the appeal is allowed for statistical purposes.
Order pronounced on 18.08.2025.