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Facts
The assessee trust applied for registration under Section 12AB. The CIT(Exemptions) rejected the application citing non-compliance and non-appearance for hearings. The assessee contended that notices were sent to an expired email address of a deceased trustee, and their updated email address was not used.
Held
The Tribunal held that the assessee was denied a proper opportunity of being heard due to notices being sent to an incorrect email address. Registration under Section 12AB is a substantive matter, and denial without a fair chance to present information violates natural justice.
Key Issues
Whether the denial of registration under Section 12AB was justified when notices were not properly served on the assessee, violating principles of natural justice.
Sections Cited
12AB, 12AA, 10AB, 10AC, 12AB(1)(b)(ii)(B)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI SIDDHARTHA NAUTIYAL & SHRI BHAGIRATH MAL BIYANI
O R D E R
PER SIDDHARTHA NAUTIYAL - JM:
The present appeal has been filed by the assessee against the order of the Commissioner of Income Tax (Exemption), Bhopal vide order dated 06.12.2024 passed for A.Y. 2022-23.
The Assessee has raised the following grounds of appeal:
“1. That the denial of registration u/s 12AB on the ground that information called vide three notices could not be complied is on the facts and in the circumstances of the case quite erroneous, unjustified improper, arbitrary and bad in law.
2. That the appellant has not been allowed proper opportunity of being heard. The appellant could not comply with notices fixing the date of hearing on 08-11-2024, 19-11- 2024 and 26-11-2024 as these notices were not served on proper e-mail address. The notices were served on email id of Mr. Sanjay Jain who had expired on 04-06-2023 at his email id max.sanjay@rediffmail.com. New email id jaintrustnemawar@gmail.com was updated by the assessee in profile section of income tax department but notices were not sent on the updated email.id. Honourable ITAT Pune Bench on similar facts restored the Shri Digamber Jain Rewatat Sidhyoday Siddh Kshetra Trust vs. CIT(E) A.Y. 2022-23 - 2 - matter back to the ld. CIT(Exemption) in case of Indus Foundation vs. CIT(Exemption) in dated 16-10-2024.
That the appellant further craves leave to add, to alter and/or to amend any of the foregoing grounds of appeal
as and when necessary.”
3. The brief facts of the case are that the assessee trust had applied for registration under section 12AB of the Income-tax Act, 1961 (“the Act”) by filing Form No. 10AB under the new registration regime. In order to process the application and to verify the objects and activities of the assessee, the learned Commissioner of Income-tax (Exemptions) issued several opportunity letters dated 24.10.2024, 11.11.2024 and 20.11.2024, fixing the hearings on 08.11.2024, 19.11.2024 and 26.11.2024 respectively and calling for various documents and details. According to the CIT(Exemptions), no reply or compliance was made by the assessee in response to any of the notices issued. In view of the alleged non- compliance and non-furnishing of requisite documents and information necessary to verify the application, the learned CIT(Exemptions) rejected the application filed in Form No. 10AB for grant of registration under section 12AB of the Act. Consequent to such rejection, the provisional registration earlier granted to the assessee under section 12AB vide Form No. 10AC dated 04.04.2022 was also cancelled by invoking the provisions of section 12AB(1)(b)(ii)(B) of the Act.
The assessee is in appeal before us against the order passed by the CIT(Exemptions) dismissing the application of the assessee for registration under section 12AB of the Act.
Shri Digamber Jain Rewatat Sidhyoday Siddh Kshetra Trust vs. CIT(E) A.Y. 2022-23 - 3 - 5. The Counsel for the assessee submitted before us by way of written submissions, that the order rejecting registration under section 12AB of the Act was passed by the learned CIT(Exemptions), on 06.12.2024 and was served through email on the same date. It was submitted that there occurred a delay in filing the appeal before the Hon’ble Tribunal because the order as well as the earlier notices were served on the email id of the managing trustee, Shri Sanjay Jain, who had expired on 04.06.2023 after prolonged illness. Due to his demise, the said email id was not being monitored by the successor trustees, who were not aware of the proceedings or the passing of the order under section 12AB. It was further submitted that the assessee trust had already updated a new email id, namely jaintrustnemawar@gmail.com, in the profile section of the income-tax portal, but despite such updation, the notices and the impugned order continued to be sent to the old email id of the deceased trustee, namely max.sanjay@rediffmail.com. The Counsel submitted that the assessee was having valid registration under section 12AA of the Act earlier and had duly applied for provisional registration in Form No. 10A, which was granted on 04.04.2022. Thereafter, the assessee applied for permanent registration in Form No. 10AB on 29.06.2024. The application was rejected solely on the ground of non-appearance on the dates fixed for hearing, without examining the objects and activities of the trust on merits. It was submitted that the assessee could not appear or furnish details as the notices were not served on the correct and operative email address, resulting in denial of a proper opportunity of being heard. The Counsel submitted that the action of the CIT(Exemptions) is in violation of principles of natural justice. Reliance was placed on the Shri Digamber Jain Rewatat Sidhyoday Siddh Kshetra Trust vs. CIT(E) A.Y. 2022-23 - 4 - decision of the Hon’ble ITAT, Pune Bench in the case of Indus Foundation vs. CIT (Exemption) in dated 16.10.2024, wherein on similar facts the matter was restored to the file of the CIT(Exemptions) for fresh consideration. The Counsel, therefore, prayed that the impugned order be set aside and the matter be restored to the file of the CIT(Exemptions) for de-novo adjudication after granting proper opportunity to the assessee.
We have considered the rival contentions and perused the material available on record. It is an admitted position that the application filed by the assessee in Form No. 10AB has been rejected by the learned CIT(Exemptions) solely on the ground of non-compliance and non- appearance, without examining the objects and activities of the trust on merits. From the written submissions made before us, it is evident that the notices and the impugned order were sent to the email id of the deceased managing trustee and not to the updated email id of the assessee trust, which has been placed on record. In such circumstances, the assessee cannot be faulted for non-compliance, as the opportunity of being heard was not effectively served. We are of the considered view that registration under section 12AB is a substantive matter having significant civil consequences for the assessee trust and the same cannot be denied without affording a real and meaningful opportunity of being heard. The principles of natural justice demand that the assessee should be given a fair chance to place all relevant documents and explanations before the competent authority. In the interest of justice, therefore, we set aside the impugned order passed by the learned CIT(Exemptions) rejecting the application for registration under section 12AB and cancelling the provisional registration. The matter is restored to the file of the CIT(Exemptions) for de-novo consideration in accordance with law. The learned CIT(Exemptions) shall issue fresh notices at the correct and updated email address of the assessee, afford reasonable opportunity of being heard, examine the objects and activities of the trust on merits, and thereafter pass a speaking order in accordance with law.
The appeal of the assessee is allowed for statistical purposes. This Order pronounced on 23/12/2025