INTERNATIONAL NAVODAYA CHAMBER OF COMMERCE,DELHI vs. CIT EXEMPTION, DELHI

My Lord, had the provisional registration been deemed invalid ab initio, the initial application ought to have been rejected at the threshold itself. However, the department, instead of doing so. proceeded to issue successive notices, seek clarifications, call for documents, and even serve multiple questionnaires. Such conduct unequivocally indicates that the application was treated as valid and maintainable throughout the proceedings.

The rejection at this stage, after full compliance and participation, amounts to an unjust denial of natural justice, especially when all required documents and clarifications have already been submitted.” 4. We have heard the ld. AR for the assessee and Ld. DR for the Revenue and examined the impugned order in both the appeals. The only contention raised before us is that the Principle of Natural Justice has not been followed while passing the impugned order as no effective opportunity of hearing has been given when rejecting the application u/s 12AB of the Act as well as u/s 80G of the Act. It is therefore prayed that matter may be restored to the file of the ld. CIT(E) for considering it afresh by giving opportunity of hearing and to permit to file necessary documents. The Ld. DR on the other hand stated that despite of numerous opportunity given by ld. CIT(E) as find mentioned in para 3 of the impugned order therefore, the assessee is not entitled to any mercy due to their conduct and appeal is required to be dismissed.

We have considered the rival submission and examined the record, Section 250(2)(a) of the Act lays down as under:

Thus, the hearing mandated by Section 250(2)(a) of the Act is not a mere formality but a mandatory statutory requirement for following the principle of natural justice by the quasi-judicial authority. We extract the para 3 of the impugned order in which would make clear that the effective opportunity of hearing has not been given which is required u/s 250(2)(a) of the Act. “3. On perusal of documents it is noticed that earlier form 10AB for registration u/s 12A(1)(ac)(iii) was rejected vide order dated 10.12.2024, issued vide DIN & notice no. ITBA/ EXMP/ F/ EXM45/ 2024- 25/1071041865(1), and provisional certificate of 12A issued by CPC vide URN AAGCI2318NE20219 issued for the period from A.Y. 2022-23 to 2024-25 was also cancelled. Hence, without provisional registration certificate u/s 12A, present application filed on 21.03.2025 in Form 10AB for registration u/s 12A(1)(ac)(iii) of the Income Tax Act, 1961 filed is infructuous and hereby rejected.”

Further, the earlier order dated 10.12.2024 wherein provisional registration was cancelled, the said order was passed without following the principle of natural justice as no opportunities of effective hearing was given. The contents of the order dated 10.12.2024 is extracted below as under: The applicant, International Navodaya Chamber of Commerce, is a Non-profit company and incorporated on 23.07.2021. The applicant has obtained provisional registration from CPC on 23.02.2022 vide Unique Registration number AAGCI2318NE20219 for the period from A.Y 2022-23 to A.Y 2024-25. It has now filed an application on 27.06.2024 in Form 10AB for regular registration under section 12A(1) (ac) (iii) of the Income Tax Act, 1961.

The applicant was issued a questionnaire dated 22.07.2024 with a request to furnish certain details/documents/clarifications in support of its claim of registration u/s 12A(1)(ac)(iii) of the Income Tax Act, 1961. The case was fixed for compliance on or before06.08.2024.The applicant failed to submit the reply. The applicant was afforded another opportunity vide letter dated 13.08.2024 and the case was fixed for compliance on 28.08.2024. The applicant submitted the part reply on 28.08.2024.

The applicant vide letter dated 20.11.2024 was requested to provide the remaining / additional / details/documents/clarifications in support of its claim of registration u/s 12A(1)(ac)(iii) of the Income Tax Act, 1961.The case was fixed for compliance on or before 28.11.2024.The applicant failed to comply. Therefore, the applicant was afforded final opportunity vide letter dated 02.12.2024 and case was fixed for compliance on or before 06.12.2024. The applicant failed to comply this notice till date.

As the assessee has failed to file details/information required by the notices referred above, in support of genuineness of the activities, the application filed in Form 10AB for grant of registration u/s 12A(1)(ac)(iii) of the Income Tax Act, is hereby rejected due to non-submission of the documents for verification of charitable nature of object as well as genuineness of activities.

Since, the application filed in Form 10AB seeking registration under sub clause (iii) of clause (ac) of sub- section (1) of section 12A of the Act is rejected, the provisional registration granted vide order dated 23.02.2022 having Unique Registration Number AAGCI2318NE20219 for the period from A.Y 2022-23 to A.Y 2024-25, is also cancelled.”

In view of the above facts and circumstances, it is evident that the impugned order has been passed without effective hearing and principle of natural justice has not been followed and as a consequence the approval u/s 80G of the Act has also been denied which is subject matter of ITA No. 7429/Del/2025. For these reasons, the impugned order in both the appeals are not maintainable and accordingly set aside. The end of justice shall be met in case the matter is restored to the file of the Ld. CIT(E) for deciding the issue of requisite approval sought by the appellant afresh by affording an effective opportunity of hearing and considering the submissions to be made by the appellant/assessee. The assessee/appellant is also directed to make the necessary submissions/ detailed material before the Ld. CIT(E) within the period of 60 days of this order.