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Facts
The assessee filed an application for approval under section 80G(5)(iii) of the Income Tax Act, 1961. The CIT(E) rejected the application after issuing show cause notices with short timeframes and not receiving a response.
Held
The tribunal held that the principles of natural justice were not properly followed by the CIT(E) due to the short notice period given to the assessee. The tribunal decided to grant the assessee one more opportunity.
Key Issues
Whether the CIT(E) properly followed the principles of natural justice in rejecting the application for approval.
Sections Cited
80G(5)(iii), Rule 17A of the Income Tax Rules, 1962
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Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI
Before: HON’BLE SHRI MANOJ KUMAR AGGARWAL & HON’BLE SHRI MANU KUMAR GIRI
O R D E R
PER MANU KUMAR GIRI (Judicial Member ) This appeal filed by the assessee is arising out of the order of the Ld. Commissioner of Income Tax (Exemption) Chennai (in short ‘’the Ld. CIT (E)’’) dated 06.08.2024. 2. Brief facts of the case are that the assessee filed an application dated 13.03.2024 in form 10AB under Rule 17A of the Income Tax Rules, 1962 (in short ‘’the Rule’’) seeking approval u/s.80G(5)(iii) of the Income Tax Act, 1961 (in short ‘’the Act’’). The ld. CIT(E) issued a letter dated 06.06.2024 to furnish detailed note on the activities actually carried by the trust and assessee vide letter dated 06.06.2024 had submitted reply to the questionnaire. Further, the ld. CIT(E) issued another show cause notice dated 11.07.2024 requesting the assessee trust to furnish complete details to know whether the trust is a religious cum charitable trust or not on or before 16.07.2024. However, there was no response from assessee. Hence, the ld. CIT(E) rejected the application. Aggrieved, assessee preferred an appeal before us.
Before us, ld. Counsel for the appellant submitted that the ld. CIT(E) had not properly followed the principles of natural justice in true spirit. Ld. Counsel for the appellant further submitted that notice dated 11.07.2024 was issued with a direction to furnish the details by 16.07.2024, i.e within a short period of five days. Ld. Counsel prayed that if an adequate opportunity of hearing is given before the ld. CIT(E), assessee will prosecute the case properly. Per contra, the Ld. CIT-DR pleaded for dismissal of the appeal on the ground that the assessee failed to appear before the CIT(E).
We have gone through the order of CIT(E) and submissions addressed by both the parties. We are of the considered view that to meet the ends of the justice assessee should be given one more opportunity before the ld. CIT(E) since the time gap given by the ld. CIT(E) to furnish the details is only five days. Therefore, in the light of aforesaid factual position we deem it fit to set aside this appeal to the file of ld. CIT(E) for denovo adjudication of seeking approval. The ld.
CIT(E) who shall proceed for denovo adjudication of application in form 10AB under Rule 17A of the Rules after providing proper opportunity of hearing to the assessee. The assessee is directed to substantiate its case forthwith without any fail, failing which ld.CIT(E) shall be at liberty to proceed with the application of registration filed in form 10AB as per law.
In the result, the appeal of the assessee is allowed for statistical purpose. Order pronounced in the open court at the time of hearing on 10th December, 2024