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Judgment
Per Raj Kumar Chauhan, Judicial Member:
The appeals are directed against order of the Ld. CIT(E), Delhi, dated 25.09.2025, wherein the application for registration u/s 12A(1)(ac)(ii) of the Act, filed by the applicant on 21.03.2025 in IT A No. 7429 & 7430/Del/2025, respectively alo ngwith request to the approval u/s 80G of the Act has been rejected in the absence o f reg istratio n u/s 12AB of the Act.
By this common order, we propose to decide the ITA Nos. 7429 & 7430/Del/2025 as the appellant is the same and facts are similar and accordingly in order to avoid the repetition, both the appeals are taken up together for disposal.
Aggrieved by the impugned ord er, the assessee is in appeal and has raised fo llowing grounds as under:
ITA N o. 7429/Del/2025:
“1 . The Ho n’ble CIT(Exemption) has erred i n law and on facts in r ejecting the applicati on tiled in form 10AB on the sol e gro und after multiple queri es and without givi ng any remar k on t heir charitabl e object s. The rej ecti on appears to be based on summari es, c onj ectur e and assumptions without any substantial or cogent material to support the findi ngs. S uch an order, bei ng bas ed on c onj ec ture, is not sustai nabl e i n law and s hould be set aside.
2.The proceedings were thus concluded prematurely and i n violati on of natural j ustice , without co nsideri ng the circumstances or the fact that we had been consistently res ponsive prior to the me dical eme rgenc y.
3.My Lo rd, had t he provisional regist ration been dee med i nvalid ab initi o, the i nitial appli cation ought t o hav e be en r eject ed at the threshol d itself. Howe ver, t he department, i nstead of doing so. proceede d t o issue succ essive notices, seek clarifi cati ons, call for documents, and e ven serve multipl e questionnaires. S uch co nduct unequivocall y indi cates that the application was treated as val id and m ai ntainabl e t hr ougho ut the pr oce edings .
4.The rej ecti on at t his stage, after full compliance and participati on, amounts to an unj ust de nial of natur al justice, especially when all require d d ocume nts and clarifications hav e already been s ubmitt ed.”
ITA N o. 7430/Del/2025:
“1 . The Ho n’ble CIT(Exemption) has erred i n law and on facts in r ejecting the applicati on tiled in form 10AB on the sol e gro und after multiple queri es and without givi ng any remar k on t heir charitabl e object s. The rej ecti on appears to be based o n summari es, c onj ectur e and assumptions without any substantial or cogent material to support the findi ngs. S uch an order, bei ng bas ed on c onj ec ture, is not sustai nabl e i n law and s hould be set aside.
2.The proceedings were thus concluded prematurely and i n violati on of natural j ustice , without co nsideri ng the circumstances or the fact that we had been consistently res ponsive prior to the me dical eme rgenc y.
3.My Lo rd, had t he provisional regist ration been dee med i nvalid ab initi o, the i nitial appli cation ought t o hav e be en r eject ed at the threshol d itself. Howe ver, the department, i nstead of doing so. proceede d t o issue succ essive notices, seek clarifi cati ons, call for documents, and e ven serve multipl e questionnaires. S uch co nduct unequivocall y indi cates that the application was treated as val id and m ai ntainabl e t hr ougho ut the pr oce edings .
4.The rej ecti on at t his stage, after full compliance and participati on, amounts to an unj ust de nial of natur al justice, especially when all require d d ocume nts and clarifications hav e already been s ubmitt ed.”
We have heard the ld. AR for the assessee and Ld. DR for the Revenue and examined the impug ned order in both the appeals. The o nly conte ntion 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 w hen rejecting the application u/s 12AB o f the Act as well as u/s 80G of the Act. It is there fore prayed that matter may be restored to the file of the ld. C IT(E) for consider ing it afresh by giving opportunity of hearing and to permit to file necessary documents. T he Ld . DR on the other hand stated that despite of numerous opportunity given by ld. CIT(E) as find mentioned in para 3 of the imp ugned order the refore, the assessee is not entitled to any mercy due to their conduct and appeal is require d to be dismissed.
We have co nsidered the rival submission and examined the record, Section 250(2)(a) of the Act lays down as under:
“250(2 ) The fol lo wing shall have the right to be heard at the heari ng o f the appeal-
(a)the appellant, either i n person or by an authori zed repres entative;”
Thus, the hear ing mandated by Section 250(2)(a) of the Act is no t a mere formality but a mandatory statutory requirement for following the principle of natur al justice by the quasi-judicial authority. We extract the para 3 of the impugned order in ITA no . 7430/Del/2025 which would make clear that the effective opportunity of hearing has not been given which is required u/s 250(2)(a) of the Act.
“3 . On perusal of documents it is noticed that earlier form 10AB for registrati on u/s 12A(1)(ac )(iii) was rej ected vi de ord er dat ed 10.12.2024, iss ued vide DIN & notice no. ITBA/ EXMP/ F/ EXM45/ 20 24-25/1071041865(1), and pr ovisional certifi cate of 1 2A issued by CPC vide UR N AAGC I2318NE20219 i ssued for the period from A.Y. 2022-23 to 2024-25 was also cancelled. Hence , without provisional registrati on certificate u/s 12A, pres ent applicatio n filed on 21.03.2025 in Form 10AB for registration u/s 12A(1)(ac )(iii) of the Income Tax Act, 1961 filed is infruct uous and hereby r ej ected.”
Further, the earlier order dated 10.12.2024 wherein provisional registration was cancelled, the said order was passed witho ut following the principle of natural justice as no opportunities of effective hearing was given. The contents of the order dated 10.12.2024 is extracted be low as under:
The applicant, Internati onal Navodaya C hambe r of Commerce, i s a Non-profit company and inco rporat ed on 23.07.2021. The appl icant has obtai ned pr ovisional registr ati on from CPC on 23.02.2022 vide U nique Registration number AAGCI2318NE2 0219 for the period from A.Y 2022-23 to A. Y 2024-25. It has now file d an applicatio n on 27.06.2024 in Form 10AB for regular registr ati on under secti on 12A(1 ) (ac) (iii) of the Income Tax Act, 1961.
2.The appli cant wa s issued a questionnaire dated 22.07.2024 wit h a request to fur nish cert ain details/d ocume nts/clarifi catio ns i n support of its claim of registr ati on u/s 1 2A(1)(a c)(iii) of the Income Tax Act, 1961. The case was fixed f or compliance on or before06.08.2024.The applicant failed to submit t he reply . The a pplicant was afforded anot her o pportunit y vide l etter dated 13.08.2024 and the c as e was fixed for complianc e o n 28.08.2024. The applicant s ubmit ted t he part reply on 28.08.2024.
3.The appli cant vide l ett er date d 2 0.11.2024 was request ed t o pr ovide the remaini ng / additiona l / details/d ocume nts/clarifi catio ns i n support of its claim of registr ati on u/s 1 2A(1)(a c)(iii) of the Income Tax Act, 1961.The case was fix ed for com pli ance on or before 28.11.2024.The applicant fai led t o comply. Therefore, the applicant was afforded fi nal opportunity vide letter dat ed 02.12.2024 and case was fix ed for c ompli ance on or before 06.12.2024. The applicant failed to com ply this notice till date.
4.As t he assessee has fai led to file details/information requi red by the notices refer red above, in suppor t of genui neness of the activities, the applicatio n filed in Form 10AB for grant of registration u/s 12A(1 )(ac)(iii) of t he Inc ome Tax Act, is hereby rej ected due t o non-s ubmissio n of the documents for ve rificati o n of charitable nat ure of object as well as genui neness of ac tivities.
5.Since , the application filed in F orm 10AB see ki ng registr ati on under sub clause (iii ) of clause (ac ) of sub-section (1 ) of s ection 12A of the Act is rej ected, t he provisional registration granted vide order dat ed 23.02.2022 having Unique R egistra tion Number AAGCI2318NE20219 for the peri od from A.Y 2022-23 to A.Y 2024-25, is al so cancelled.”
In view of the ab ove facts and circumstances, it is evident that the impugned order has been passed w ithout effective hearing and principle of natural justice has no t b een followed and as a consequence the approval u/s 80G of the Act has also been denied which is sub ject matter of IT A No. 7429/Del/2025. For these reasons, the impugned order in both the appeals are not maintainable and accordingly set aside. The e nd of justice shall be me t 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 o f this order.
Bo th the appeals of the assessee are allowed for statistical purposes in above terms.