NID FOUNDATION,CHANDIGARH vs. COMMISSIONER OF INCOME TAX (EXEMPTIONS), , CHANDIGARH

A show cause notice was initially issued by CIT (Exemptions), Lucknow on 10.10.2024, to which the assessee responded and also informed the Department about the change in its operational address, requesting transfer of jurisdiction. Accordingly, the case was transferred to CIT (Exemptions), Chandigarh on 04.12.2024 3. A final show cause notice was issued by the new jurisdiction on 06.12.2024, granting the assessee only 6 days to respond. The notice was merely uploaded on the e-filing portal, and the email communication bounced. No further effort was made to serve the notice through other valid and prescribed modes. 4. Despite this, an ex-parte order rejecting the application under Section 12AB was passed on 13.12.2024. The limited timeframe coupled with the failure of proper service resulted in the assessee being denied a fair and reasonable opportunity of being heard. 5. Consequently, the related application under Section 80G was also rejected on the same date without independent examination, solely on 133 & 134-chd-2025 NID foundation, Chandigarh 4 the ground that registration under Section 12AB had not been granted. 4. During appellate proceedings, the ld. Counsel for the Assessee filed written submissions on this issue and argued the case on the line of his written submissions it is as under:

The Ld. CIT (Exemptions), Chandigarh proceeded on an erroneous assumption that the show cause notice dated 06.12.2024 was duly served merely by uploading it on the e-filing portal. However, the Department's own records confirm that the corresponding email communication bounced, and no further attempt was made to effect service through other legally recognized and prescribed modes under Section 282 read with Rule 127.

The CIT (Exemptions) failed to acknowledge that no opportunity of being heard was granted and passed the order ex parte in contravention of the principles of natural justice, which are inherent to tax proceedings under the Act.

Despite these material procedural lapses, the Ld. CIT (Exemptions), Chandigarh proceeded to pass the impugned rejection order dated 13.12.2024 under Section 12AB(l)(b)(ii), solely on the basis of alleged non-compliance. This mechanical approach without ensuring proper notice and hearing renders the order unsustainable in law.

Having noticed as above, this Court is of the firm view that the petitioner has not been given sufficient opportunity to put up his pleas with regard to the proceedings under Section 12A(l)(ac)(iii) of the Act of 1961 and as he was not served with any notice. Therefore, he would be entitled to file his reply and the Department would of course be entitled to examine the same and pass a fresh order thereafter.”

Keeping in view the ratio laid down by the Hon'ble Jurisdictional High Court of Punjab & Haryana on the issue of issuance of notice on I.T. Portal and respectfully following the findings given by the Hon'ble Jurisdictional High Court on this issue, both the appeals of the Assessee are remanded back to the CIT(E) for adjudication afresh on merits, 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 appeals of the Assessee are allowed for statistical purposes.