Natural Justice Violations: ITAT restores Foundation’s Applications for Income Tax Section 12AB and 80G Registration [Read Order]
The assessee argued that the denial of registration and cancellation of provisional approvals without an effective SCN were unlawful and in violation of principles of natural justice.
Natural Justice Violations - ITAT - Taxscan
Natural Justice Violations - ITAT - Taxscan
The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has set aside orders of the Commissioner of Income Tax (Exemptions) [CIT(E)], which had rejected Shree Gopinathji Jyotipith Foundation’s applications for registration under Section 12AB and approval under Section 80G(5) of the Income Tax Act, 1961.
The appellant, a public charitable trust incorporated as a non-profit under Section 8 of the Companies Act, 2013, had filed applications in Form 10AB seeking registration under Section 12A(1)(ac)(iii) and approval under Section 80G(5). The CIT(E) issued notices to the trust’s email in July and August 2024. The trust failed to respond, as the email went unnoticed due to the consultant’s absence, leading to an ex-parte rejection of its applications in September 2024.
Aggrieved, the trust filed appeals before the Tribunal with a delay of 12 days, citing Diwali holidays of staff members. The ITAT condoned the delay, accepting the explanation furnished in the supporting affidavit.
The assessee argued that the denial of registration and cancellation of provisional approvals were unlawful and in violation of principles of natural justice, as no effective show-cause notice or opportunity of hearing was granted. It was submitted that the trust was established with charitable objectives including education, relief for the poor, running libraries, publication of books and articles, and environmental activities like plantation.
The Ahmedabad ITAT Bench comprising Dr. B.R.R. Kumar (Vice President) and T.R. Senthil Kumar (Judicial Member) heard the case.
The Tribunal observed that the CIT(E) summarily dismissed the applications on account of non-compliance without considering that the trust could not respond due to the absence of its consultant.
Stressing that “no prejudice will be caused to the revenue if an opportunity of hearing is provided,” the Bench held that the matter should be examined on merits rather than disposed of ex-parte.
Accordingly, the ITAT remanded the matter to the CIT(E) with a direction to re-examine the trust’s applications under Section 12AB and Section 80G of the Income Tax Act. The assessee has been directed to furnish all details sought by the CIT(E) without seeking unnecessary adjournments.
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