PUNJAB DEFENCE AND SECURITY RELIEF FUND,CHANDIGARH V. COMMISSIONER OF INCOME TAX(EXEMPTIONS), CHANDIGARH

ITA 238/CHANDI/2025

AI Insights

The case involves the Punjab Defence and Security Relief Fund appealing against the order of the CIT (Exemptions), Chandigarh, which rejected their application for registration under section 10(23C)(iii) of the Income Tax Act, 1961. The CIT (Exemptions) had rejected the application on the grounds that the certificate of registration was not provided, despite the Assessee being constituted under a gazetted notification by the Punjab Government, which did not require such a certificate. The Assessee argued that the rejection was arbitrary and violated the principles of natural justice as no show cause notice was issued. The tribunal agreed with the Assessee's arguments and remanded the case for fresh adjudication.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 716711 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2024-2025
• Appeal Filed On: 14-02-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Department Lawyers: KUSAM BANSAL
• Assessee Lawyers: MANOJ KUMAR
• Keywords: Opportunity of being heard; Principle of natural justice

Judgement Text

"आयकर अपीलȣय अͬधकरण, चÖडीगढ़ Ûयायपीठ, चÖडीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH, ‘B’, CHANDIGARH BEFORE SHRI LALIET KUMAR, JUDICIAL MEMBER & SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER आयकर अपील सं./ ITA No. 238/CHD/2025 Ǔनधा[रण वष[ / Assessment Year : 2024-25 Punjab Defence and Security Relief Fund, Room No. 22, 2nd Floor, CM office, Confidential Branch, Punjab Civil Secretariate, Chandigarh 160001 बनाम Vs. The CIT (Exemptions), Chandigarh èथायी लेखा सं./ PAN NO: AAALP2265N अपीलाथȸ/Appellant Ĥ×यथȸ/Respondent ( VIRTUAL MODE ) Ǔनधा[ǐरती कȧ ओर से/Assessee by : Sh. Manoj Kumar, CA राजèव कȧ ओर से/ Revenue by : Smt. Kusam Bansal, CIT DR सुनवाई कȧ तारȣख/Date of Hearing : 05.08.2025 उदघोषणा कȧ तारȣख/Date of Pronouncement : 18.08.2025 आदेश/Order Per Laliet Kumar, JM : Appeal in this case has been filed by the assessee against the order dated 16.12.2024 passed by the Ld. CIT(Exemptions), Chandigarh for the Assessment Year 2024-25. 2. Grounds of appeal are as under: Printed from counselvise.com 238-Chd-2025 Punjab Defence and Security Relief Fund, Chandigarh 2 1. That The Id. CIT(Exemption) is wrong in rejecting the application for registration u/s 10(23C) (iii) on the arbitrary ground that the certificate of registration of the assessee was not provided, ignoring the undisputed fact that the assessee is not required to obtain such a certificate, as it was constituted under the Gazetted notification issued by the Punjab Government vide No. 11538-HM-65/30522 dated 12th Sept 1965 and Notification number was clearly mentioned in the Rules & Regulations of the assessee fund, which were filed during the course of proceedings. Therefore, the rejection order passed u/s 10(23C) is bad-in-law and is liable to be quashed 2. The Id. CIT(Exemption) is wrong in rejecting the application for registration u/s 10(23C) (iii) without providing any opportunity of being heard, since show cause notice was not issued to the assessee, which is against the principle of natural justice and so, order passed is liable to be quashed. 3. At the very outset, ld. Counsel for the Assessee submitted that the Ld. CIT(E) has wrongly rejected the application of the Assessee u/s 10(23C) (iii) of the Income Tax Act, 1961 (in short 'the Act') without providing any opportunity of being heard. It has further been submitted that no show cause notice was issued to the Assessee Printed from counselvise.com 238-Chd-2025 Punjab Defence and Security Relief Fund, Chandigarh 3 which is against the principle of natural justice and thus, the order passed by the Ld. CIT(E) is liable to be quashed. Further, it has been submitted that the Assessee has a fair case on merit. It has also been submitted that the Assessee is not required to obtain a certificate of registration as it was constituted under the gazetted notification issued by the Punjab Govt vide no. 11538-HM- 65/30522 dt. 12.9.1965 and there was a mention of it in the Rules and Regulations, which was duly filed during the course of proceedings, therefore, the rejection order passed u/s 10(23C) is bad in law. The ld. Counsel for the Assessee also submitted that the matter may be remanded back to the CIT(E) for fresh adjudication. 6. Per Contra, the ld. DR relied on the order of the Ld. CIT(E). 7. We have considered the facts brought on record by the ld. Counsel for the Assessee and we have also gone through the order passed by the ld. CIT(E). We find that although the Assessee did not get show cause notice in question for which the order was passed, still then, the Printed from counselvise.com 238-Chd-2025 Punjab Defence and Security Relief Fund, Chandigarh 4 Ld. CIT(E) has not passed the order on merit on the basis of material available on record. Therefore, we are of this considered view that in order to have natural justice for the Assessee and in the fitness of things the matter should be remanded back to CIT(E) for adjudication afresh. Accordingly, the case is remanded back to the CIT(E) for adjudication afresh on merit, in accordance with law, on affording due and adequate opportunity of hearing to the Assessee. The Assessee, no doubt, shall cooperate in the fresh proceedings before the CIT(E). All pleas available under the law shall remain so available to the assessee. Ordered accordingly. The appeal of the Assessee is allowed for statistical purposes. 8. In the result, the appeal is allowed for statistical purposes. Order pronounced on 18.08.2025. Sd/- Sd/- (MANOJ KUMAR AGGARWAL ) ( LALIET KUMAR ) ACCOUNTANT MEMBER JUDICIAL MEMBER rkk Printed from counselvise.com 238-Chd-2025 Punjab Defence and Security Relief Fund, Chandigarh 5 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the order forwarded to : 1. अपीलाथȸ/ The Appellant 2. Ĥ×यथȸ/ The Respondent 3. आयकर आयुÈत/ CIT 4. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय आͬधकरण, चÖडीगढ़/ DR, ITAT, CHANDIGARH 5. गाड[ फाईल/ Guard File सहायक पंजीकार/ Assistant Registrar Printed from counselvise.com "