HIRA MEHTA CHARITABLE TRUST,MUMBAI V. COMMISSIONER OF INCOME TAX (EXEMPTION), MUMBAI

ITA 5595/MUM/2024

AI Insights

The case involves Hira Mehta Charitable Trust appealing against the decision of the Commissioner of Income Tax (Exemption), who rejected their application for final registration under section 80G(5)(iv)(B) of the Income Tax Act. The Trust argued that the CIT(E) erred in law by rejecting their application without a fair opportunity to respond to a system-generated notice, which they claimed led to miscommunication and ultimately to the rejection of their application without consideration of their provisional registration status. The Tribunal found that the CIT(E) had not adequately addressed the Trust's compliance with the necessary conditions for registration under section 80G, nor had they provided a clear explanation for the rejection, thus necessitating a remand for further consideration.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 32253 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BISWANATH DAS
• Assessee Lawyers: RAJESH VINAYKANT PAREKH
• Keywords: Principle of natural justice; Charitable institution
• Section: 80G

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL Mumbai “E” Bench, Mumbai. Before Shri Sandeep Gosain (JM) & Shri Omkareshwar Chidara (AM) ITA No. 5595/MUM/2024 (Assessment Year : 2025-26) Hira Mehta Charitable Trust Building No. 37, 2nd Floor Hamam Street, Mumbai GPO Mumbai-400 001. Vs. The CIT(E) 601, 6th Floor Cumballa Hill MTNL, Pedder Road, Mumbai-26 PAN : AAATH0929D Appellant Respondent Assessee by : Shri Rajesh Vinaykant Parekh Revenue by : Shri Biswanath Das Date of Hearing : 11/02/2025 Date of pronouncement : 03/03/2025 O R D E R Per Omkareshwar Chidara (AM) :- In the above captioned appeal, the following grounds of appeal were raised by the appellant :- 1. Error in Law: The learned Commissioner of Income Tax (Exemption) erred in law in rejecting the application for final registration under section 80G(5)(iv)(B) of the Income Tax Act. 2. Failure to Provide a Fair Opportunity: The C1T (Exemption) failed to give the appellant a fair opportunity to respond to the notice of hearing dated 19th June 2024. The assessee had approached the department for clarification regarding the requirements for responding to the notice but was informed that no action was required as the notice was system-generated. This miscommunication led to the rejection of the application without the assessee being able to present any additional documents or clarifications. 3. Failure to Consider Provisional Registration: The CIT (Exemption) failed to consider appellant was granted provisional registration under section 80G on 1sl May 2023, valid until Assessment Year 2026-2027. 4. The appellant Prays that: • The order dated 31.08.2024 passed by the CIT (Exemption) be set aside. • Direct the CIT (Exemption) to grant final approval within a time bound period. Hira Mehta Charitable Trust 2 • Such order rectify as may be demand appropriate in the facts and circumstances. 2. Thus, the main grievance of the appellant is that they were not able to present any additional documents/clarification, especially when the Ld. CIT(Exemption) has granted provisional registration under section 80G of the I.T. Act which is valid till A.Y. 2026-27. 3. The Ld. AR of the appellant has submitted during the course of hearing, that the order of rejecting the application u/s. 80G of the Act was very cryptic without mentioning which stipulated conditions were not fulfilled. 4. Ld. DR relied on the order of Ld. CIT(E). 5. Both parties are heard. Para 4 which is the operative portion of Ld. CIT(E) order, is reproduced as under :- 4. As per above mentioned provision of Income Tax Act, the assessee has to file Form 10AB u/s 80G(5)(iv)(B), if the assessee has not claimed exemption in previous year. Since the assessee has claimed exemption in previous years, therefore this application u/s 80G is not allowable. Further, the assessee is not fulfilling the stipulated conditions prescribed for filing application for approval in Form 10AB. In view of the above this application Form is hereby rejected. 6. From the above, it is seen that the Ld. CIT(E) has rejected the application for seeking registration u/s. 80G of the Act without mentioning which stipulated conditions prescribed for filing application for approval in Form 10AB of the Act were not fulfilled. Moreover, it appears from the grounds of appeal filed by the appellant, their submission was only to grant an opportunity to explain that all the required conditions were fulfilled. The principles of natural justice require that the appellant should be given to explain the legal provisions, especially when the Department has already granted provisional registration u/s. 80G of the Act till A.Y. 2026-27. The Ld. CIT(E) is directed to grant reasonable opportunity to produce the documents/clarifications, the appellant wants to submit, and take a decision as per law. The matter is remitted to the file of Ld. CIT(E) as above. Hira Mehta Charitable Trust 3 7. The appellant is allowed for statistical purposes. Order pronounced in the open Court on 03/03/2025. Sd/- Sd/- (SANDEEP GOSAIN) (OMKARESHWAR CHIDARA) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 03/03/2025 Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. BY ORDER, //True Copy// (Assistant Registrar) ITAT, Mumbai PS "