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Facts
The assessee, Rajkot Runners Association, filed an application for registration under Section 80G of the Income Tax Act, 1961. The CIT(E) rejected the application and cancelled the provisional approval, citing non-submission of documents and lack of reply to notices. The assessee sought adjournment due to pre-occupation, which was not considered.
Held
The Tribunal noted that the CIT(E) rejected the application without issuing a show cause notice or providing an opportunity to be heard, violating principles of natural justice. Therefore, the matter was restored to the CIT(E) for de novo adjudication.
Key Issues
Whether the rejection of the assessee's application for registration under Section 80G by the CIT(E) was valid without providing an opportunity of being heard and considering the adjournment request, and if the order is liable to be set aside on grounds of violation of natural justice.
Sections Cited
80G, 80G(5)(iii), 80G(5)(iv), 12AB(1)(b), 8
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT
Before: DR. ARJUN LAL SAINI & SHRI DINESH MOHAN SINHA
�नधा�रती क� ओर से/Assessee by : Shri Darshak Thakkar, AR राज�व क� ओर से/Revenue by : Smt. Pallavi, CIT-DR सुनवाई क� तार�ख /Date of Hearing : 05/08/2025 घोषणा क� तार�ख /Date of Pronouncement : 03/11/2025 ORDER Per Dinesh Mohan Sinha, Judicial Member: Captioned appeal filed by assessee pertaining to Assessment Year 2024- 25, is directed against the order passed under section 80G of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) by Commissioner of Income-tax (Exemption), Ahmedabad (in short ‘CIT(E)’), dated 21.11.2024, wherein ld. CIT(E) rejected assessee’s application filed in Form No.10AB u/s 80G(5)(iii) of the Act and provisional approval was also cancelled.
The grounds of appeal raised by the assessee are as under:
Rajkot Runners Association vs. CIT(E) (AY : 2024-25) 2 “1. The Commissioner of Income Tax (Exemption) has erred on facts and in law in rejecting application for registration u/s.80G (5) (iii) of income tax act, 1961 due to non-submission of reply to notices.
2. The Commissioner of Income Tax (Exemption) has erred on facts and in law by not issuing show cause notice proposing rejection and cancellation of registration u/s 80G (5) of the Income Tax Act, 1961.
3. The Commissioner of Income Tax (Exemption) has erred on 3 facts and in law in cancelling registration u/s.80G (5) of income tax act, 1961.”
Brief facts of the case are that:
i. The appellant is a nonprofit company incorporated u/s.8 of Companies Act, 2013 with Registrar of Company on 22/10/2022. ii. The appellant is carrying out health awareness activities like marathon run, run for fun and other awareness programs for fitness. iii. The appellant is assessed to tax with DCIT(Exemption), Circle 2, Ahmedabad. iv. The appellant is registered u/s.12AB(1)(b) of Income Tax Act, 1961 having registration No.AAMCR2357N23AD01 dated 09/01/2024. v. The appellant had filed application for provisional registration u/s.80G(5)(iv) of the Income Tax Act, 1961 on 01/02/2023. vi. Application was accepted and provisional registration was granted to the appellant by the Principal Commissioner of Income Tax / Commissioner of Income Tax in form No.10AC w.e.f.28/02/2022 to AY 2025-26 vide order dated 28/02/2023 vii. Thereafter, the appellant had filed application for final registration u/s.80G(5)(iii) of the Income Tax Act, 1961 on 21/06/2024. vii. Questionnaire cum notice was issued by The Commissioner of Income Tax (Exemption), Ahmedabad on 24/11/2023 and 09/01/2024 asked the appellant to submit required details on or before 24/01/2024.
Rajkot Runners Association vs. CIT(E) (AY : 2024-25) 3 ix. However, due to pre-occupation, appellant had sought adjournment to notice on 12/11/2024. x. However, without considering request for adjournment, the Commissioner of Income Tax (Exemption), Ahmedabad has passed order and summarily rejected the application on the ground that appellant has failed to file documentary evidence nor sought any adjournment. xi. However, The Commissioner of Income Tax (Exemption) has not issued any show cause notice or opportunity of being heard proposing rejection of application. The same is against principal of natural justice.
Being aggrieved by the order of the Ld. CIT(E), the assessee preferred this appeal before us.
Ld. Counsel submitted that order passed by the Ld. CIT(E) is an ex parte order, as the assessee could not file relevant documents and evidences before the Ld. CIT(E). However, now the assessee is ready to submit relevant documents and details before the Ld. CIT(E), hence, matter may be remitted back to the file of the Ld. CIT(E) for fresh adjudication.
On the other hand, Ld. CIT-DR for the Revenue submitted that assessee- trust was negligent during the proceedings before Ld. CIT(E), hence appeal of the assessee may be dismissed.
We have heard both the parties. Considering the above facts, we note that assessee could not plead his case successfully before the Ld. CIT(E). Hence, we are of the view that one more opportunity should be given to the assessee to file relevant documents and evidences and plead the case before Ld. CIT(E). We note that it is settled law that principles of natural justice and fair play require that the affected party is granted sufficient opportunity of being heard to contest his case. Therefore, without delving much deeper into the merits of the case, in Rajkot Runners Association vs. CIT(E) (AY : 2024-25) 4 the interest of justice, we restore the matter back to the file of Ld. CIT(E) for de novo adjudication and pass a speaking order after affording sufficient opportunity of being heard to the assessee, who in turn, is also directed to contest his stand forthwith. Therefore, we deem it fit and proper to set aside the order of the Ld. CIT(E) and remit the matter back to the file of the Ld. CIT(E) to adjudicate the issue afresh on merits.
In the result, appeal filed by the assessee is allowed for statistical purposes.
Order is pronounced in the open court on 03/11/2025