Hamdard Laboratories India vs CIT(Exemptions)

PER RAMIT KOCHAR, AM:

This appeal is filed by the assessee against order passed by Learned Commissioner of Income Tax (Exemptions), New Delhi [CIT(E), in short] dated 30.03.2026 . ( DIN & Notice No. ITBA/EXM/F/EXM45/2025-26/1088116229(1)) rejecting application as withdrawn by the assessee for grant of registration u/s 12A(1)(ac)(ii) of the Income Tax Act, 1961 (“the Act” in short).

The grounds of appeal raised by the assessee in its Memo of Appeal filed with the Income Tax Appellate Tribunal, Delhi Benches, reads as under:

Brief facts of the case are that the assessee has filed an application dated 30.09.2025 in Form No.10AB for grant of registration u/s 12A(1)(ac)(ii) of the 1961 Act, before learned CIT(E). The Ld. CIT(E) initiated necessary processing of the said application filed by the assessee by making necessary enquiries. It transpired that there were several discrepancies, contradictions, claims and counterclaims with respect to inclusion as well exclusion of properties claimed by the assessee in its aforesaid application dated 30.09.2025. The ld. CIT(E) recorded in details in page 3-13 of its aforesaid order dated 30.03.2026 passed by ld. CIT(E) , the details of discrepancies, contradictions, claims , counterclaims etc made by the assessee as well by third parties. The ld. CIT(E) gave opportunity to the assessee to file corrected Form No. 10AB. The assessee filed details which were contradictory to its earlier stand. The assessee also claimed that the assessee has claimed that another Trust namely Hamdard Food India through its two trustees acting on their own vested certain properties of the assessee in Hamdard Food India. It was also observed by ld. CIT(E) that some of the properties listed in the application filed in Form No. 10AB are not listed in the financial statements as on 31.03.2025 filed by the assessee. It was also observed by ld. CIT(E) that there are contradictory statements made by the assessee wrt properties. While undertaking aforesaid enquiry in processing the aforesaid application for registration u/s 12A(1)(ac)(ii), the ld. CIT(E) gave opportunities of being heard to the assessee to explain its stand with respect to several contradictions, discrepancies, claims and counter claims with respect to the properties, and the assessee also participated in the proceedings before ld. CIT(E). The details are recorded in the order passed by ld. CIT(E). The ld. CIT(E) even issued notice u/s 133(6) dated 26.02.2026 to the aforesaid Hamdard Foods India to seek details from it directly. The said Hamdard Foods India submitted reply to ld. CIT(E) wherein it submitted that the properties listed in the notice dated 26.02.2026 issued by ld. CIT(E) are in its possession and control wef 01.07.2024. It was contended that one property out of seven already stood registered in its name while remaining six are vested with it and , are pending formal registration and mutation in its favour before the concerned State Registrar and Revenue Authorities. It was also contended by Hamdard Foods India that these properties were transferred by the assessee to it wef 01.07.2024 , and transfer has been recorded in the books of assessee as well in the books of Hamdard Foods India , and has been duly disclosed in the financial statements of the assessee, which was signed by Mr. Hammad Ahmed (Food Division) and Mr. Abdul Majeed(Medicine Department) on 10.12.2025 substantiating transfer of Food Division assets from assessee to the Trust. The details are recorded by ld. CIT(E) in the impugned order dated 30.03.2026. Thus, in nut-shell the ld. CIT(E) after details enquiry observed several contradictions, discrepancies, claims and counterclaims wrt properties claimed by the assessee. When the enquiry/processing was at advanced stage of disposal by ld. CIT(E), the assessee on 25.03.2026 filed an application requesting to withdraw its Form No. 10AB filed on 30.09.2025. It is pertinent to mention that the assessee filed its application in Form No. 10AB for registration u/s 12A(1)(ac)(ii) on 30.09.2025. It is also pertinent to mention that as per Section 12AB(3)(ii) of the 1961 Act, the ld. CIT(E) is required to pass an order granting or refusing registration in such cases before the expiry of six months calculated from the end of the quarter in which the aforesaid application for registration u/s 12A(1)(ac)(ii) was received by ld. CIT(E), which in the instant case happens to be time barring on 31.03.2026 as the initial application was filed on 30.09.2025. Thus, the ld. CIT(E) was obligated to pass order granting registration or refusal of registration latest by 31.03.2026. The assessee on 25.03.2026 filed an application requesting to withdraw its Form No. 10AB filed on 30.09.2025 i.e. just before the time barring limitation was going to happen on 31.03.2026, as the time barring for passing order by ld. CIT(E) was 31.03.2026. The ld. CIT(E) took the said letter for withdrawal filed by the assessee on record. The ld. CIT(E) observed that it is evident from the properties details filed by the assessee in Form No. 10AB were not correct and the same are not as per the details filed by the assessee in its audited books as on 31.03.2025. The ld. CIT(E) also observed that the assessee has itself mentioned that Trustees of the assessee has entered into a Family Settlement dated 22.10.2019 , which is decreed by Hon’ble Delhi High Court on 13.12.2019 , and conditioned that the parties will remain bound by the terms and conditions of the said family settlement. The ld. CIT(E) observed and held that considering that there is mismatch in properties mentioned in audited accounts as on 31.03.2025 of the assessee and in Form No. 10AB and the assessee letter dated 25.03.2026 requesting to withdraw its application, the application dated 30.09.2025 filed in Form No. 10AB was rejected as withdrawn by ld. CIT(E). The ld. CIT(E) granted liberty to the assessee to reapply again after removing the discrepancies in its application, vide orders dated 30.03.2026.

The assessee has now filed an appeal before the Tribunal being aggrieved by the order dated 30.03.2026 passed by ld. CIT(E), albeit its request for dismissal of its aforesaid application dated 30.09.2025 was acceded and allowed by ld. CIT(E) and no prejudice is caused to the assessee . When this appeal came up for hearing before the Bench, the ld. Counsel for the assessee CA Shri R M Mehta submitted that the assessee has filed fresh application in Form No. 10AB dated 31.03.2026 for grant of registration u/s 12A(1)(ac)(ii) with ld. CIT(E), which is filed pursuant to withdrawal of its application in Form No 10 AB dated 30.09.2025 filed with ld. CIT(E) for grant of registration u/s 12A(1)(ac)(ii) with ld. CIT(E), which aforesaid initial application dated 30.09.2025 was permitted by ld. CIT(E) to be withdrawn and was accordingly rejected, vide orders dated 30.03.2026. The aforesaid fresh application dated 31.03.2026 is placed on record in filed. Initially the ld. Counsel for the assessee Shri R M Mehta, CA submitted that the ld. CIT(E) ought not to have made any observations while allowing withdrawal of its initial application dated 30.09.2025, and all the observations made by the ld. CIT(E) should be expunged as this is the prejudice caused to the assessee by recording of observations by ld. CIT(E) while rejecting application dated 30.09.2025 as withdrawn, but later the ld. Counsel for the assessee restricted its arguments that the Tribunal should direct vide its order disposing of this appeal that ld. CIT(E) while processing /pursuing its fresh application for registration u/s 12A(1)(ac)(ii), dated 31.03.2026 should grant fair hearing to the assessee and the order should be passed on merits in accordance with law by ld. CIT(E). The ld. Counsel for the assessee relied upon the judgment and order of Hon’ble Madras High Court in the case Tamizhavel P.T.Rajan v. ITO(E), dated 08.02.2023 in Writ Appeal Nos. 114, 115 , 123, 124 and 126 of 2023, wherein the Hon’ble Madras High Court by relying on the judgment and order of Hon’ble Supreme Court in the case of Tin Plate Company of India Limited v. State of Bihar , (1998) 8SCC 272) , held that if writ petitions are dismissed on the ground of alternate remedy, the High Court is not required to express any opinion on the merits of the case which is to be pursued before an alternative forum, and hence accordingly observations/finding on the merits of case made by ld. Single Judge passed in writ petition were vacated/set aside by Hon’ble Madras High Court. On being asked by the Bench that in the instant case before us, it is not the alternative remedy which the assessee is contemplated to pursue , but rather the assessee sought withdrawal of its application for registration in Form No. 10AB u/s 12A(1)(ac)(ii), dated 30.09.2025 filed before ld. CIT(E) , and again filed the fresh application in Form No. 10AB dated 31.03.2026 with the same authority i.e. ld. CIT(E) as before, after the earlier application was rejected as withdrawn by ld. CIT(E) vide orders dated 30.03.2026 wherein the ld. CIT(E) made certain observations which were as a result of detailed enquiry conducted by him while processing assessee application for registration dated 30.09.2025 filed in Form No. 10AB for grant of registration u/s 12A(1)(ac)(ii) of the 1961 Act. Thus, speaking academically although not in context of the assessee’s case, that once an tax-payer is cornered by department in pursuit of its appeal say with ld. CIT(E) or applications filed for seeking registration u/s 12A with ld. CIT(E) and so on and the concerned authority is about to pass an order which is likely to be going to be adverse to the tax-payer , and the tax-payer then seeks withdrawal of its aforesaid appeal or application , to be followed by the fresh appeal or application with the same legal forum, will it not be the misuse/abuse of the process of law when the assessee seeks indulgence of the Court to expunge the observation recorded by diligent officers in discharge of their duties consequent to enquiries made by the concerned officer while processing said appeal/application, while allowing withdrawal of taxpayers initial application/appeal, the ld. Counsel for the assessee submitted that all that what assessee wanted is fair hearing before ld. CIT(E) wrt to its fresh application dated 31.03.2026 and secondly the orders must be passed by ld. CIT(E) on merits in accordance with law. The ld. CIT-DR submitted that the assessee is pursuing the same remedy by filing the fresh application for registration u/s 12A(1)(ac)(ii) with the same legal forum and not an alternative remedy , by filing application for registration u/s 12A(1)(ac)(ii) with ld. CIT(E). We have heard both the parties as well we have perused the material on record. We have elaborately discussed in this order about the background surrounding the case, and the same are not repeated. Suffice to say that the right to fair hearing is a mandatory component of the procedure established by law. Reference is drawn to judgment and order of Hon’ble Supreme Court in the case of Maneka Gandhi v. UOI , reported in 1978 AIR 597. Further, all the statutory authorities are bound to dispose off the applications / appeals etc filed by the tax-payers , on merits in accordance with law. It appears that the assessee is having some pre-conceived notion that processing of its fresh application dated 31.03.2026 by ld. CIT(E) shall not be fairly disposed off , and/or the officer concerned shall be colored /prejudiced by the facts/ remarks/ observations made/recorded by ld. CIT(E) , while allowing withdrawal of its earlier application dated 30.09.2025 , vide orders dated 30.03.2026. In any case, if any prejudice is caused to the assessee , there are always legal remedies available to the assessee as are provided under the Statute and/or by Constitutional Courts , which if so advised, the assessee may always avail of. Thus, with these remarks, we dispose of this appeal filed by the assessee. We order accordingly.

In the result, the appeal filed by the assessee is disposed off in the manner as stated above in this order.