Vidya Jyoti Charitable Trust Vs CIT (Exemptions) (ITAT Chandigarh)
The Income Tax Appellate Tribunal (ITAT), Chandigarh, disposed of two appeals filed by the assessee against the order of the Commissioner of Income Tax (Exemptions) dated 11.03.2026 concerning registration under Section 12AB and approval under Section 80G of the Income Tax Act, 1961.
The assessee challenged the rejection of approval under Section 80G, contending that it had been rejected on the technical ground that the application was filed under the wrong clause. Before the Tribunal, the assessee also submitted that the CIT(E) had passed the order without affording a reasonable opportunity of being heard and requested another opportunity. The Departmental Representative opposed the grant of such opportunity.
The Tribunal observed that the application for registration under Section 12AB had been rejected primarily because it was filed under an incorrect clause of the prescribed form. It noted that the rejection was not based on examination of the assessee’s eligibility on merits but on a procedural defect. The Tribunal held that a curable procedural or technical defect, such as mentioning an incorrect clause in the prescribed application, should not be the sole basis for rejecting an application under Section 12AB. It further observed that where such a defect is curable and does not go to the root of the matter, the competent authority should provide an opportunity to rectify the defect or treat the application under the appropriate clause, if permissible under law.
Accordingly, the Tribunal set aside the order passed under Section 12AB and restored the matter to the file of the CIT(E) with directions to provide the assessee an adequate opportunity to rectify the defect or treat the application under the appropriate clause, if permissible, and thereafter adjudicate the application afresh on its merits by passing a speaking order.
The Tribunal also observed that the rejection of approval under Section 80G was consequential to the rejection under Section 12AB. As the Section 12AB proceedings had been restored, the order rejecting approval under Section 80G was also set aside and remanded for fresh adjudication after disposal of the Section 12AB application.
The assessee was directed to furnish all requisite documents, explanations, and evidence and cooperate during the remand proceedings. The CIT(E) was granted liberty to make necessary enquiries and pass a fresh order in accordance with law. Both appeals were allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT CHANDIGARH
The present two appeals have been filed by the assessee feeling aggrieved by the order passed by the ld. Commissioner of Income Tax (Exemptions) [in short ‘the CIT (E)’] dated 11.03.2026 for the assessment year 2027-28.
2. In this case, the grievance of the assessee is that the ld. CIT (E) has erred in rejecting the approval u/s 80G of the Income Tax Act, 1961 on a technical ground that application is under wrong clause.
3. Before this Tribunal, the ld. counsel for the assessee in its appeal has submitted that the ld. CIT (E) has dismissed the appeal of the assessee without affording a reasonable opportunity of being heard and therefore, the assessee deserves to be given one more opportunity. Therefore, one more opportunity of being heard may kindly be granted.
4. The ld. DR has opposed the grant of opportunity.
5. We have heard the rival submissions and carefully perused the material available on record. It is noticed that the application of the assessee seeking registration under section 12AB of the Income-tax Act, 1961 has been rejected by the learned CIT(E), inter alia, on the technical ground that the application was filed under an incorrect clause of the prescribed Form. The rejection is not based upon the examination of the assessee’s eligibility on merits but primarily on a procedural defect in the application. In our considered view, a curable procedural or technical defect, such as mentioning an incorrect clause in the prescribed application, ought not to be made the sole basis for rejecting an application seeking registration under section 12AB. Procedural prescriptions are intended to facilitate the administration of justice and not to defeat substantive rights. Where the defect is curable and does not go to the root of the matter, the competent authority is expected to afford an opportunity to the applicant to rectify such defect or to treat the application under the appropriate clause, if otherwise permissible in law.
6. We are, therefore, of the considered opinion that instead of rejecting the application on a technical ground, the learned CIT(E) ought to have granted an opportunity to the assessee to rectify the application or to consider the same under the appropriate clause of the prescribed Form. Accordingly, in the interest of substantial justice, the impugned order passed by the learned CIT(E) under section 12AB is set aside and the matter is restored to his file with a direction to afford adequate opportunity to the assessee to rectify the defect in the application and/or to treat the application under the appropriate clause, if permissible under law, and thereafter adjudicate the application afresh on its own merits by passing a speaking order in accordance with law.
7. We further notice that the rejection of the assessee’s application for approval under section 80G is purely consequential to the rejection of registration under section 12AB and is founded upon the said rejection. Since we have restored the proceedings relating to registration under section 12AB to the file of the learned CIT(E) for fresh adjudication, the order rejecting approval under section 80G cannot survive independently. Accordingly, the order passed under section 80G is also set aside and the matter is restored to the file of the learned CIT(E) to be decided afresh after adjudication of the assessee’s application under section 12AB, in accordance with law.
8. The assessee is directed to furnish all requisite documents, explanations and evidences as may be called for by the learned CIT(E) and shall extend full cooperation during the remand proceedings. The learned CIT(E) shall be at liberty to make such enquiries as may be considered necessary before passing a fresh order in accordance with law.
9. Before parting, we observe that the assessee shall fully cooperate in the fresh proceedings and shall not seek unnecessary adjournments. In the event of any failure on the part of the assessee to comply with the directions or to furnish the requisite details, the learned CIT(E) shall be at liberty to decide the matter on the basis of the material available on record in accordance with law.
10. In the result, the appeal relating to registration under section 12AB as well as the consequential appeal relating to approval under section 80G are allowed for statistical purposes.
Order pronounced on 01.07.2026.
