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Facts
The assessee's application for registration under section 12A(1)(ac)(ii) of the Income Tax Act was rejected by the CIT(E). The assessee appealed, arguing that the CIT(E) violated principles of natural justice by rejecting an adjournment request and failing to consider a detailed reply before passing the order.
Held
The Tribunal noted the assessee's non-compliance in submitting documents despite opportunities. However, considering the element of natural justice, it remanded the case back to the CIT(E) for a fresh decision, instructing the CIT(E) to provide a proper opportunity to the assessee. The assessee was directed to pay a cost of Rs. 5,000/- to the ‘Poor Patient Welfare Fund’.
Key Issues
Whether the CIT(E) erred in rejecting the assessee's application for registration u/s 12A(1)(ac)(ii) by violating principles of natural justice, particularly by not considering the adjournment request and detailed reply.
Sections Cited
12AB, 12A(1)(ac)(ii)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, CHANDIGARH BENCH, ‘A’, CHANDIGARH
Before: SHRI LALIET KUMAR & SHRI KRINWANT SAHAY
BEFORE SHRI LALIET KUMAR, JUDICIAL MEMBER & SHRI KRINWANT SAHAY, ACCOUNTANT MEMBER आयकर अपील सं./ U./s 12AB Arya Education Society, The CIT(E), बनाम DAV High School, Chandigarh Khandsa Road, Vs. Gurgaon �थायी लेखा सं./ PAN NO: AABTA2027N अपीलाथ�/Appellant ��यथ�/Respondent ( HYBRID HEARING ) �नधा�रती क� ओर से/Assessee by : Sh. Baldev Raj & Sh. Maneesh Upnejja, CA’s (Virtually) राज�व क� ओर से/ Revenue by : Sh. Manav Bansal, CIT DR सुनवाई क� तार�ख/Date of Hearing : 12.02.2026 उदघोषणा क� तार�ख/Date of Pronouncement : 13.02.2026 आदेश/Order Per Krinwant Sahay, AM : Appeal in this case has been filed by the assessee against the order dated 14.10.2025 passed by the Ld. CIT, Exemptions, Chandigarh
Grounds of appeal, as raised by the Assessee are reproduced as under:
1381-Chd-2025 2
That on the facts and in circumstances and in law, the order dt. 14.10.2025 as passed by the Ld. CIT Exemption, Chandigarh [referred as "The Ld. CIT (E)] is bad in law and void ab initio and liable to be quashed 2 That on the facts and in circumstances and in law, the Ld. CIT (E) erred in rejecting Appellant application of registration u/s 12A(1)(ac) (ii) of the Act. 3. That, on facts and in the circumstances of the case and in law, the Ld. CIT(E) erred in violating the principal of natural justice by not considering the adjournment request filed by the Appellant on 07.10.2025 seeking time up to 23.10.2025 and passing rejection order without granting requested adjournment. 4. That, on facts and in the circumstances and in law, the Ld. CIT(E) erred in not consider the detailed reply submitted by the Appellant on 14.10.2025 and proceeded to pass the order on the same day, i.e., 14.10.2025, thereby denying the Appellant a fair and reasonable opportunity of being heard 5. All the above-mentioned grounds are independent and without prejudice to others, and the appellant carves the right to add, alter, amend, and DLEETE the ground(s) of appeal during the course of hearing
1381-Chd-2025 3
During the proceedings before us, ld. Counsel for the Assessee submitted that the Ld. CIT(E), Chandigarh erred in violating the principal of natural justice by not considering the adjournment request filed by Assessee and passed the rejection order. It has further been submitted that the Ld. CIT(E) had not considered the detailed reply submitted by the Assessee and proceeded to pass the order on the same day, thereby denying the Assessee a fair and reasonable opportunity of being heard. Accordingly, a prayer has been made to remand the matter back to the CIT(E).
Per contra, Ld. DR relied on the order of the Ld. CIT(E).
We have considered the findings given by the Ld. CIT(E) in the order and we have also considered the arguments and facts brought on record by the ld. Counsel for the Assessee. We find from the order of the Ld. CIT(E) that in spite of opportunity afforded to the Assessee to furnish details / documents, the Assessee failed the submit the requisite information and, thus, in the absence
1381-Chd-2025 4 of the requisite submissions of the Assessee, the application of the Assessee for registration u/s 12AB of the Act was rejected by the Ld. CIT(E). From the order of the Ld. CIT(E) it is clear that opportunity was given to be Assessee but the Assessee did not comply with. We find that the Assessee neither filed the required details nor documents as sought by the Department. It is very serios thing where Assessee’s are not appearing nor filing the requisite information before the lower authorities and directly coming to the Tribunal. Therefore, as discussed with ld. AR during the proceeding, a cost of Rs. 5,000/- (Rs. Five thousand only) is imposed upon the Assessee, which is required to be deposited by the Assessee, in the ‘Poor Patient Welfare Fund’ maintained by PGIMER, Chandigarh within 15 days of receipt of this order.
However, on going through the material available on record and considering the submissions of the Assessee claiming that the reply of the Assessee was not considered by the Ld. CIT(E) and keeping in view the element of natural justice, we feel one more opportunity needs to be 1381-Chd-2025 5 provided to the Assessee to produce and furnish necessary documents / information before the Ld. CIT(E).
In view of this, the matter is restored to the file of the CIT(E) for decision afresh in accordance with law. Needless to say, that the ld. CIT(E) will give proper opportunity to the Assessee to present its case and to furnish necessary evidences and details. The Assessee is also directed to present its case before the Ld. CIT(E) as and when called for and will not contribute in unnecessary delay in the hearing of the appeal.
In the result, the appeal of the Assessee stands allowed for statistical purposes.