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Judgment
Per Raj Kumar Chauhan, Judicial Member:
The appeal of the assessee is directed against order of the Ld. CIT(E), Chandigarh, dated 29.11.2024, wherein the application for approval u/s 80G(5)(ii) of the Income Tax Act, 1961 (hereinafter referred to as "the Act"), filed by the applicant on 17.06.2024 has been rejected in the absence of approval u/s 80G of the Act.
Aggrieved by the impugned order, the assessee is in appeal and has raised following grounds as under:
"1.That on the facts and in the circumstances of the case, the Ld. CIT (Exemptions), Chandigarh erred both in law and on facts in rejecting/cancelling the application filed by the appellant in Form No. 10AB u/s 80G(5)(iii) of the Income-tax Act, 1961 without appreciating the material already available on record and without evaluating the genuineness of activities of the appellant-society.
2.That the Ld. CIT(E) erred in holding that a fresh application u/s 80G is not maintainable once a previous application was rejected, despite the statute permitting re-application under the amended regime of Section 80G read with Rule 11AA and CBDT Circulars governing re-registration.
3.That the Ld. CIT(E) failed to appreciate that the rejection order dated 29.11.2024 was passed merely for non-compliance of notices, and therefore the second application could not have been summarily cancelled without granting mandatory opportunity of being heard as required under Section 80G(5)(iv), Section 12AB(4), and the principles of natural justice.
4.That the Ld. CIT(E) erred in treating the second application as "non-maintainable" without jurisdiction, ignoring that: (a) There is no bar in the Act preventing an assessee from applying afresh, (b) The rejection order was not on merits of the objects or activities, and (c) The assessee had furnished complete documentary evidence in the subsequent filing.
5.That the Ld. CIT(E) failed to appreciate that the appellant-society is duly registered under the Societies Registration Act, has commenced genuine charitable activities, maintains proper books of account, audit reports, bank statements, financials, photographs, beneficiary records, and satisfies all conditions prescribed u/s 80G(5).
6.That the Ld. CIT(E) erred in rejecting/cancelling the application solely on technical grounds and without examining the:
(i)Annual audited accounts,
(ii)Income-tax returns,
(iii)Ledgers & activity details,
(iv)Photographs & evidence of charitable activities,
(v)Affidavits & undertakings u/s 2(15), 13(1), 13(3), duly furnished by the appellant.
7.That the Ld. CIT(E) erred in adopting a hyper-technical approach and in mechanically rejecting the application, ignoring binding judicial precedents that registration/approval under 12AB/80G is to be granted at the stage of initial approval unless activities are found to be non-genuine or non-charitable.
8.That the Ld. CIT(E) erred in rejecting the application without making any adverse finding regarding:
- Nature of the objects of the appellant (charitable),
- Genuineness of activities (supported by evidence),
- Violation of s. 13(1)(c),
- Violation of first proviso to s. 2(15).
9.That the rejection order is bad in law as it is contrary to:
- Section 80G(5),
- Rule 11AA,
- Principle of audi alteram partem,
- CBDT Circular No. 11/2019,
- Judgments of SC/HC/ITAT supporting liberal interpretation in favour of granting initial registration/approval.
10.That the Ld. CIT(E) erred in ignoring the written submissions, evidence file, and documentary proof uploaded by the appellant which were not considered at all in the impugned order.
11.That the cancellation order dated 08.10.2025 is invalid, non-speaking, mechanical, cryptic, and passed without application of mind and therefore liable to be quashed.
12.That the appellant satisfies all statutory conditions for grant of approval u/s 80G and therefore the Ld. CIT(E) ought to have granted approval instead of rejecting/cancelling the application."
None appears on behalf of the assessee. However, the Id. DR has filed the adjournment application which is rejected. Accordingly, the matter is decided ex-parte qua assessee. The only contention raised before us is that the Principle of Natural Justice has not been followed while passing the impugned order as no effective opportunity of hearing has been given when rejecting the approval u/s 80(G) of the Act. It is thus deemed appropriate that in the light of principle of natural justice, the matter may be restored to the file of the Id. CIT(E) for considering it afresh by giving opportunity of hearing and to permit to file necessary documents.
We have considered the material on record. It is noticed that no proof of service of notices as shown in table enumerated in para 3.1 of the impugned order is placed on record. Ld. CIT(E) is a quasi judicial authority who is duty bound to follow the principal of natural justice. We extract the para 3.1 & 3.2 of the impugned order which would make clear that the effective opportunity of hearing has not been given, as under:
"3.1On 26.10.2024, in response to the notice, the applicant has sought for an adjournment. Therefore, another letter granting necessary opportunity was issued to the applicant on 06.11.2024 and the matter was fixed for reply by 12.11.2024. In response to the above notice, the applicant has neither furnished any reply nor sought any adjournment. Another letter granting final opportunity was issued to the applicant on 14.11.2024 and the matter was fixed for reply by 20.11.2024. In response to the above notices, again the applicant has neither furnished any reply nor sought any adjournment. As per the portal, it can be seen from the table below that the notices were delivered to the email id of the applicant as well as on the portal:
S. No. Date of Issue PAI/TAN Addressee Name Comm. Ref. No. Email Sent On Email Delivered On Shared With e- Proceeding on Read In Tax Payer On 1 14-11-2024 AAHAB41.10E [email protected] ITBA/EXM/R/EXM/3/2024 25/10705253(1) 14-11-2024 12:43 14-11-2024 12:43 14-11-2024 13:49 2 14-11-2024 AAHAB41.10E BHAGWAN VAMKI AMBEDKAR SHKSHA SAMITI ITBA/EXM/R/EXM/3/2024 25/10705253(1) 14-11-2024 12:43 14-11-2024 12:43 14-11-2024 13:49 3 06-11-2024 AAHAB41.10E [email protected] ITBA/EXM/R/EXM/3/2024 25/10705253(1) 06-11-2024 13:24 06-11-2024 13:25 06-11-2024 14:23 4 06-11-2024 AAHAB41.10E BHAGWAN VAMKI AMBEDKAR SHKSHA SAMITI ITBA/EXM/R/EXM/3/2024 25/10705253(1) 06-11-2024 13:24 06-11-2024 13:25 06-11-2024 14:23 5 07-10-2024 AAHAB41.10E [email protected] ITBA/EXM/R/EXM/3/2024 25/10908178(1) 07-10-2024 12:43 07-10-2024 12:43 07-10-2024 15:04 11-10-2024 13:10 6 07-10-2024 AAHAB41.10E BHAGWAN VAMKI AMBEDKAR SHKSHA SAMITI ITBA/EXM/R/EXM/3/2024 25/10908178(1) 07-10-2024 12:43 07-10-2024 12:43 07-10-2024 15:04 11-10-2024 13:10 3.2From the above table, it is evident that sufficient opportunities were afforded to the applicant to furnish the details/ documents and the applicant had read the notice on 11.10.2024. However, no information was filed by the applicant. Given the non-compliances on the aforesaid occasions afforded to the applicant, it becomes evident that the applicant is not interested in pursuing the matter. In the absence of submissions regarding the activities, it is difficult to verify both the nature of objects & genuineness of activities of the applicant. It can safely be concluded that the queries raised could not be answered satisfactorily by the applicant."
In view of the above facts and circumstances, it is evident that the impugned order has been passed without effective hearing and principle of natural justice has not been followed. For these reasons, the impugned order is not maintainable and accordingly set aside. The end of justice shall be met in case the matter is restored to the file of the Ld. CIT(E) for deciding the issue of requisite approval sought by the appellant afresh by affording an effective opportunity of hearing and considering the submissions to be made by the appellant/assessee. The assessee/appellant is also directed to make the necessary submissions/ detailed material before the Ld. CIT(E) within the period of 60 days of this order.
In the result, the appeal of the assessee is allowed for statistical purposes with the direction to decide the matter as expeditiously.