No Need to Re-examine Section 10 Exemption Claim from Income Tax if Opportunity of being Heard not Provided: ITAT Decides in Rs.112 Cr Matter [Read Order]

The Income Tax Appellate Tribunal (ITAT), New Delhi Bench, heard a INR 112 crore matter wherein it was held that there is no need to re-examine exemption from income tax claim if opportunity of being heard is not provided.

The main issue in the present case was whether the assessee, Hamdard Laboratories India, was correct in appealing the action of the Commissioner of Income Tax (Appeals) [CIT(A)] who directed the Assessing Officer (AO) to examine the claim of the assessee under section 10(23C)(iv).

Section 10(23C) of the Act is a specific exemption available to certain Government and non-government universities and educational institutions. The brief facts of the case are that the assessee had filed a return of income declaring nil income while claiming exemption under Section 10(23C).

Section 10(23C)(iv) reads as:

(iv) any other fund or institution established for charitable purposes which may be approved by the [Principal Commissioner or Commissioner], having regard to the objects of the fund or institution and its importance throughout India or throughout any State or States; or

The assessee, on first appeal, contested and won the contention that the addition required deletion as there is no addition maintainable under Section 14(1) unless an opportunity of being heard was given. However, the First Appellate Authority also directed the AO to re-exammine the claim of the assessee under Section 10 of the Income Tax Act, 1961.

The ITAT bench also found merit in the argument that there is no case of issuance of directions. Madhumita Roy (Judicial Member) and Ambitabh Shukla (Accountant Member) accordingly quashed the order dated 27.10.2025 under Section 250 passed by CIT(A), Madurai. The grounds, and the appeal itself was therefore allowed.

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