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Facts
The assessee filed an application in Form No.10AB for approval under section 80G(5)(iii) of the Income-tax Act. The CIT(E) rejected the application, citing the assessee's failure to provide requested documents and evidence, leading to an ex parte order. The assessee appealed, arguing they did not receive the notices and therefore could not present their case, violating principles of natural justice.
Held
The Tribunal noted that the assessee could not present its case before the CIT(E) due to not receiving the notices, resulting in an ex parte order. Observing that principles of natural justice require an opportunity to be heard, the Tribunal decided to restore the matter to the CIT(E) for fresh adjudication.
Key Issues
Whether the rejection of the application for approval under section 80G(5)(iii) without providing a reasonable opportunity of hearing violates the principles of natural justice.
Sections Cited
80G(5)(iii), 80G(5), 12AB
AI-generated summary — verify with the full judgment below
Before: SHRI SANJAY GARG & SHRI BIJAYANANDA PRUSETH
आदेश / O R D E R PER BIJAYANANDA PRUSETH: This appeal by assessee emanates from the order dated 21.11.2024, passed by the Commissioner of Income-tax (Exemption), Ahmedabad [in short, ‘CIT(E)’], wherein the CIT(E) rejected the application filed in Form No.10AB for approval u/s 80G(5)(iii) of the Income-tax Act (in short, ‘the Act’). 2. The grounds of appeal
1. raised by assessee are as under: “1. On the facts and in circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Exemption) has erred in rejecting the application filed by the assessee trust without granting reasonable opportunity of hearing.
2. On the facts and circumstances of the case as well as law on the subject, the ld. Commissioner of Income Tax (Exemptions) has erred in rejecting the application filed by the Appellant Trust in Form 10AB for grant of approval under clause (iii) of first proviso to section 80G(5) of the I.T. Act.
/AY.2024-25 Swami Shree Akhandanand & Medical Charitable Trust 3. It is therefore prayed that order of ld. Commissioner of Income-tax (Exemption) rejecting application of assessee may please be quashed.
4. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal.”
Brief facts of the case are that the assessee filed application in Form No.10AB under sub-clause (B) of clause (iii) of first proviso to sub-section (5) of section 80G of the Act. The CIT(E) had issued notices of hearing on 12.09.2024 and 29.10.2024 and requested assessee to furnish details and documents. The applicant had neither filed any submission nor sought any adjournment. The CIT(E) relied on the decisions of Hon’ble Supreme Court in case of CIT vs. Dawoodi Bohra Jamat, in Civil Appeal No.2492 of 2014 and M/s New Nobel Educational Society, in Civil Appeal No.3795 of 2014. The CIT(A) has observed that due to failure of assessee to file documentary evidences; he was unable to be satisfied about (i) genuineness of the activities of the institution or fund and (ii) the fulfilment of all the conditions laid down in clauses (i) to (v) of section 80G(5) of the Act. The CIT(E) rejected the application filed in Form 10AB for approval under clause (iii) of section 80G(5) of the Act.
Aggrieved by the order of CIT(E), the assessee filed appeal before the Tribunal. The learned Authorized Representative (ld. AR) of the assessee submitted that the assessee could not represent its case before the CIT(E) and the order being an ex parte, stood vitiated on account of violation of principles of natural justice. He submits that the assessee had not received the notices issued by the CIT(E) on 12.09.2024 and 29.10.2024 and hence, the assessee /AY.2024-25 Swami Shree Akhandanand & Medical Charitable Trust could not file the documents and evidences before the CIT(E), which resulted in the CIT(E) passing an ex parte order. Therefore, ld. AR requested that an opportunity may be granted to the assessee to plead his case before the CIT(E) in the interests of justice and fair play.
On the other hand, the learned Senior Departmental Representative (ld. Sr. DR) for the revenue did not have any objection if the matter is remitted to the file of the CIT(E) for fresh adjudication.
We have heard both the parties and perused the materials available on record. We note that assessee-trust could not plead its case before the CIT(E) by submitting explanation and other details/documents as requisitioned by the CIT(E) vide his notices dated 12.09.2024 and 29.10.2024. The CIT(E) passed an ex parte order based on materials available in the application for registration of the trust u/s 12AB of the Act. The reasons for not filing further details have been properly explained by the ld. AR. The ld. Sr. DR has also no objection, if matter is remitted to the CIT(E). Considering all these facts, we are of the view that one more opportunity should be given to the assessee to plead its case before the CIT(E). It is settled law that principles of natural justice require that the affected party is granted sufficient opportunity of being heard to present his case. Therefore, without delving deeper into the merits of the case, in the interests of justice, we restore the matter to the file of CIT(E) for fresh adjudication and pass a speaking order after affording sufficient opportunity of being heard to the assessee. The assessee is directed to furnish its submission and the relevant /AY.2024-25 Swami Shree Akhandanand & Medical Charitable Trust details/documents before the CIT(E). For statistical purposes, the appeal of the assessee is treated as allowed.
In the result, appeal of the assessee is allowed for statistical purposes. Order is pronounced under provision of Rule 34 of ITAT Rules, 1963 on 30/05/2025.