SABUDH FOUNDATION,CHANDIGARH V. COMMISSIONER OF INCOME TAX(CIT) EXEMPTION, CHANDIGARH

ITA 117/CHANDI/2025

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The case involves Sabudh Foundation, which appealed against the rejection of their applications seeking registration/approval under section 80G(5) of the Income Tax Act. The applications were initially rejected due to the cancellation of regular registration under section 12A(1)(ac)(i), which was found to be irregular. The Tribunal found that the cancellation was not justified as the assessee had acted in good faith, relying on the valid approvals granted by the statutory authority. The Tribunal emphasized that mere technical errors should not deprive the assessee of its legitimate claims.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 716701 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 21-01-2025
• Laws Referred To: Section 80G(5), Section 12(1)(ac)(vi), Section 12A(1)(ac)(i), Section 12AA, Section 12A(1)(ac)(iii)
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: TARUNDEEP KAUR LD
• Assessee Lawyers: ANMOL ATTRY LD
• Keywords: Set aside; Principle of natural justice; Cancellation of registration
• Section: 12AA; 12A; 80G

Judgement Text

"1 IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH, CHANDIGARH HYBRID HEARING BEFORE HON’BLE SHRI LALIET KUMAR, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM 1. आयकरअपीलसं./ ITA No. 45/CHANDI/2025 & 2. आयकरअपीलसं./ ITA No. 117/CHANDI/2025 Sabudh Foundation H No 329 Sector 33A Chandigarh-160020 बनाम/ Vs. CIT (Exemption) Room No 1 5th Floor CR Building, Himalaya Marg Sector 17-E, Chandigarh ̾थायीलेखासं./जीआइआरसं./PAN/GIR No.ABACS-5751-N (अपीलाथŎ/Appellant) : (ŮȑथŎ / Respondent) अपीलाथŎकीओरसे/ Appellant by : Shri Anmol Attry(CA) -Ld. AR ŮȑथŎकीओरसे/Respondent by : Smt.Tarundeep Kaur (CIT) – Ld. DR सुनवाईकीतारीख/Date of Hearing : 07-08-2025 घोषणाकीतारीख /Date of Pronouncement : 18-08-2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aggrieved by rejection of twin applications seeking registration / approval u/s 80G(5) vide impugned orders dated 12-11-2024 & 22-11- 2024 of Ld. Commissioner of Income Tax (Exemption), Chandigarh, [CIT(E)], the assessee is in further appeal before us. 2. First, we take up ITA No.117/Chandi/2025 wherein the assessee filed Form No.10AC and sought registration u/s 80G(5)(iii). It transpired that the assessee was granted provisional registration by CPC u/s Printed from counselvise.com 2 12(1)(ac)(vi) on 27-05-2021 for three years (AYs 2021-22 to AY 2023- 24) and regular registration u/s 12A(1)(ac)(i) on 24-11-2021 for 5 years (AYs 2022-23 to 2026-27). As per Act, regular registration could be granted only to those applicants who already had regular registration u/s 12AA prior to 01-04-2021. However, the assessee was not having such registration. In the absence any reply forthcoming from the assessee, the regular registration granted by CPC on 24-11-2021 was suo-moto cancelled by Ld. CIT(E) vide order dated 12-11-2024. Consequently, the application seeking registration u/s 80G(5) was rejected vide separate order dated 22-11-2024 which is subject matter of ITA No.45/Chandi/2025. Aggrieved, the assessee is in further appeal before us. 3. From case records, it emerges that the assessee applied for 12A registration under old regime on 26-03-2021 which was granted by CPC on 27-05-2021 for three years. Subsequently, the assessee applied for regular registration on 17-11-2021 within stipulated period of 6 months which was also granted by CPC on 24-11-2021 for 5 years. The assessee applied for 80G provisional registration on 16-11-2021 which was also granted on 23-11-2021 from 23-11-2021 to AY 2024- 25. The assessee then applied for regular registration u/s 80G on 14- 05-2024 which has been rejected by impugned order dated 22-11-2024 primarily due to the fact that the regular registration granted u/s 12A(1)(ac)(i) on 24-11-2021 for 5 years was held to be irregular and consequently, cancelled by registration authority. Printed from counselvise.com 3 4. The prime argument of Ld. AR is that suo-moto cancellation is bad-in-law. The Ld. AR urged that due to unintentional manual error, while filing Form 10A for getting final registration u/s 12A, inadvertently, Sec.12A(1)(ac)(i) was selected instead of correct Sec.12A(1)(ac)(iii). The said error was not pointed out by registration authority and the assessee was accorded approval on 24-11-2021 for 5 years. No chance was granted to the assessee to rectify the same which is in violation of principles of natural justice. The Ld. AR also pointed out the final registration was granted by Pr. CIT/ CIT and not by CPC. The Ld. AR stated that the assessee acted in good faith and relied on the valid approvals as granted by statutory authority. 5. From the above stated facts, it could be culled out that the assessee has been granted provisional registration as well as regular registration u/s 12A by appropriate authority. The assessee has also been granted provisional approval u/s 80G. No violation of any the registration condition has been noted. In our considered opinion, mere technical errors could not deprive the assessee of its legitimate claims. The assessee has acted in good faith and relied on valid successive approvals as granted by the appropriate authority from time to time. The suo-moto cancellation of registration, therefore, could not be held to be justified. On these facts, we set aside the impugned orders and restore the applications back to the file of Ld. CIT(E) for fresh consideration after affording opportunity of hearing to the assessee. Any technical mistake / error that have occurred due to new regime Printed from counselvise.com 4 coming into force w.e.f. 01-04-2021 may reasonably be overlooked. The assessee is directed to plead and prove its case forthwith. 6. Both the appeals stand allowed for statistical purposes. Order pronounced on 18-08-2025. Sd/- Sd/- (LALIET KUMAR) (MANOJ KUMAR AGGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 18-08-2025. आदेश की Ůितिलिप अŤेिषत /Copy of the Order forwarded to : 1. अपीलाथŎ/Appellant 2. ŮȑथŎ/Respondent 3. आयकरआयुƅ/CIT 4. िवभागीयŮितिनिध/DR 5. गाडŊफाईल/GF ASSISTANT REGISTRAR ITAT CHANDIGARH Printed from counselvise.com "