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Facts
The assessee, Astha Charitable Trust, a public charitable trust registered in 2016, had applied for renewal of registration under Section 12A(1)(ac)(ii) of the Income-tax Act, 1961, using Form 10AB. The CIT (Exemptions) issued notices seeking details and documents under Rule 17A(2), but the assessee failed to respond, attributing this to the tax consultant's preoccupation and the notices escaping attention. Consequently, the CIT (Exemptions) rejected the application for renewal, citing non-furnishing of details and lack of evidence regarding the genuineness of activities and compliance with applicable laws.
Held
The Tribunal observed that the rejection was primarily due to the assessee's non-response to notices, despite the assessee claiming sufficient cause and asserting that relevant material was already available on record. Emphasizing the principles of natural justice and citing Supreme Court precedents (Andaman Timber Industries and Tin Box Company), the Tribunal held that denying an opportunity to be heard vitiates proceedings. Therefore, the impugned order by the CIT (Exemptions) was set aside, and the matter was restored for de novo consideration, with directions to afford the assessee adequate opportunity of being heard and to consider all furnished documents and explanations.
Key Issues
Whether the CIT (Exemptions) was justified in rejecting the application for renewal of registration under Section 12A(1)(ac)(ii) due to the assessee's non-response to notices, without providing an effective opportunity of being heard, thereby violating principles of natural justice.
Sections Cited
Section 12A(1)(ac)(ii), Section 12AB(1)(b), Rule 17A, Rule 17A(2), Income-tax Act, 1961
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Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD
Before: DR. BRR KUMAR & SHRI SIDDHARTHA NAUTIYAL
O R D E R
PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER:
This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Exemption), (in short “Ld. CIT(E)”), Ahmedabad vide order dated 30.01.2025 passed for A.Y. 2025- 26.
The assessee has raised the following grounds of appeal:
“1.1 The order passed u/s. 12A(1)(ac)(ii) on 30.10.2025 by CIT (Exem), Ahmedabad rejecting the application for renewal of registration u/s 12A(1)(ac)(ii) is wholly illegal, unlawful and against the principles of natural justice. 1.2 The ld. CIT(Exem), has grievously erred in law and or on facts in not appreciating that there was a sufficient cause for failure to respond to the notices of hearing issued on 26.06.2025 and 27.08.2025. Therefore, the appellant ought to have been allowed further opportunity in the interest of justice. 1.3 On the facts and circumstances of the case Ld. CIT(E) has erred on facts and in law in rejecting the application for registration under section 12A(1)(ac)(ii) of the Astha Charitable Trust vs. CIT(E) Asst.Year –2025-26 - 2– Act, despite the objects of the appellant being charitable in nature and the activities of the assessee being genuine and discernable from the record available on IT Portal. 1.4 That the in the facts and circumstances of the ld. CIT(Exem), ought not to have rejected the application for registration by ignoring the actual activities carried on by the trust. 1.5 The appellant craves leave to add, amend or alter of the grounds of appeal
.”
3. The brief facts of the case are that the assessee is a public charitable trust constituted by a trust deed dated 27th April 2016 and duly registered under the Bombay Public Trust Act. The trust was earlier granted registration under the Income-tax Act, 1961 (“Act”) under section 12A(1)(ac)(ii) of the Act for a specified period and, in accordance with the amended provisions of the Act, it filed an application for renewal of registration in Form No. 10AB under section 12A(1)(ac)(ii) of the Act. The procedure for disposal of such application is governed by section 12AB(1)(b) of the Act read with Rule 17A of the Income-tax Rules, 1962, which requires the applicant to furnish prescribed documents and enables the Commissioner to satisfy himself about the genuineness of activities, conformity of activities with the objects of the trust and compliance with other applicable laws.
The CIT (Exemptions) issued notices from time to time calling upon the assessee to furnish various details and documents as prescribed under Rule 17A(2). According to the CIT (Exemptions), these notices were duly served; however, the assessee neither filed the called-for details nor sought adjournment. It was observed in the order that no documentary evidence was produced to enable the authority to examine the genuineness of activities of the trust, whether the activities were in consonance with its Astha Charitable Trust vs. CIT(E) Asst.Year –2025-26 - 3– stated objects, and whether other relevant laws were complied with. On account of such non-compliance and lack of material on record, the CIT (Exemptions) held that the statutory requirements of section 12AB of the Act were not satisfied and accordingly CIT (Exemptions) rejected the application for renewal of registration filed in Form No. 10AB.
The assessee is in appeal before us against the order passed by the CIT (Exemptions) dismissing the application of the assessee.
Before us, the ld. counsel for the assessee contended that the order passed by the CIT (Exemptions) rejecting the application for renewal under section 12A(1)(ac)(ii) of the Act is illegal, arbitrary and violative of the principles of natural justice. It was submitted that there was sufficient cause for not responding to the notices issued on 26.06.2025 and 27.08.2025, as the notices were sent to the email ID of the tax consultant who was preoccupied with statutory compliances during the relevant period and, therefore, the notices escaped his attention. It was further contended that the assessee trust is a duly registered public charitable trust with well-defined charitable objects relating to medical relief, education, welfare activities and social development, and that its activities and financial particulars were already available on the Income-tax Portal through earlier filings such as returns of income and audit reports. According to the ld. counsel, the CIT (Exemptions) could have examined these records to satisfy himself about the genuineness of activities instead of rejecting the application outright. It was further that the rejection was made without granting an effective opportunity of being heard and without Astha Charitable Trust vs. CIT(E) Asst.Year –2025-26 - 4– appreciating that the objects of the trust are charitable in nature and its activities are genuine. On these grounds, the assessee submitted that that the matter be restored to the file of the CIT (Exemptions) for fresh consideration after affording due opportunity to the assessee.
We have considered the rival submissions and perused the material available on record. It is evident that the application for renewal of registration under section 12A(1)(ac)(ii) has been rejected primarily on the ground of non-furnishing of details and absence of response to notices. At the same time, it is also apparent that the assessee claims existence of sufficient cause for such non-compliance and asserts that relevant material regarding its objects and activities was already available on record through statutory filings. It is a settled position of law that the principles of natural justice require that a reasonable and effective opportunity of being heard must be afforded. The Hon’ble Supreme Court in Andaman Timber Industries vs. Commissioner of Central Excise (281 CTR 241) has held that denial of opportunity to present one’s case amounts to violation of natural justice and vitiates the proceedings. Similarly, the Hon’ble Supreme Court in Tin Box Company v. CIT (249 ITR 216) has held that where proper opportunity is not granted, the matter should be restored to the file of the authority for fresh adjudication.
Considering the totality of facts and in the interest of justice, we deem it appropriate to set aside the impugned order passed by the CIT (Exemptions) and restore the matter to his file for de novo consideration. The CIT (Exemptions) shall examine the application afresh in accordance Astha Charitable Trust vs. CIT(E) Asst.Year –2025-26 - 5– with law, after affording adequate opportunity of being heard to the assessee and after considering the documents and explanations that may be furnished in support of the claim for renewal of registration. The assessee is also directed to cooperate and file all requisite details as may be called for.
In the result, the appeal of the assessee is allowed for statistical purposes. This Order pronounced in Open Court on 13/02/2026
Sd/- Sd/- (DR. BRR KUMAR) (SIDDHARTHA NAUTIYAL) VICE PRESIDENT JUDICIAL MEMBER Ahmedabad; Dated 13/02/2026 TANMAY, Sr. PS TRUE COPY आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��थ� / The Respondent. 3. संबंिधत आयकर आयु� / Concerned CIT 4. आयकर आयु�(अपील) / The CIT(A)- 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad गाड� फाईल / Guard file. 6. आदेशानुसार/ BY ORDER,