2025 (12) TMI 393 - AT - Income Tax

Rejection of u/s 80G approval set aside; case remanded after finding lack of fair opportunity to respond

ITAT Delhi set aside the order of CIT(E) rejecting the assessee's application for approval u/s 80G on the ground of non-availability of information. The ... Rejection of assessee’s application u/s 80G - non- availability of information from the assessee - HELD THAT:- We observe that assessee has complied to various notices issued previously and due to certain unavoidable circumstances, assessee could not submit or comply to the recent notices. Ld. CIT (E) has rejected application due to non-availability of information from the assessee. Remit this issue back to the file of CIT (E) to consider the facts in this case and collect the relevant information from the assessee and grant the registration as per law, after giving proper opportunity of being heard to the assessee. Appeal filed by the assessee is allowed for statistical purposes. 1. ISSUES PRESENTED AND CONSIDERED 1.1 Whether rejection of the application for approval under section 80G(5) on the ground of non-compliance with the last notices, despite prior compliances, was justified. 1.2 Whether principles of natural justice required granting further opportunity to furnish information before rejecting the section 80G application and cancelling provisional approval. 1.3 Whether the matter should be remitted to the authority for fresh consideration of the application for approval under section 80G(5). 2. ISSUE-WISE DETAILED ANALYSIS Issue 1 & 2 - Validity of rejection of section 80G(5) approval for non-compliance with last notices and requirements of natural justice Interpretation and reasoning 2.1 The Tribunal noted that the authority had rejected the application under section 80G on the premise that, despite several opportunities, the assessee did not file proper submissions and did not comply with notices dated 18.11.2024 and 06.12.2024. 2.2 The assessee demonstrated that it had responded to earlier notices dated 04.07.2024, 13.09.2024, and 18.11.2024 and furnished the information called for, and that non-compliance with the last notice was due to unavoidable circumstances and was not intentional. 2.3 The Tribunal observed that the rejection was based on non-availability of information consequent to non-compliance with the recent notices, despite the assessee's compliance with various previous notices and submission of substantial information for grant of registration under section 80G. 2.4 Considering these circumstances, and to ensure 'complete justice', the Tribunal held that the assessee should be afforded a proper opportunity to furnish the requisite information before any final decision on the application. Conclusions 2.5 The rejection of the application for approval under section 80G(5), founded solely on non-compliance with the last notices in the face of prior compliances and substantial information already on record, was not sustained. 2.6 Principles of natural justice required that the assessee be given a further, proper opportunity of being heard and to furnish the necessary information before rejection of its application and cancellation of provisional approval. Issue 3 - Remand for fresh consideration of section 80G(5) approval Interpretation and reasoning 3.1 The Tribunal considered it appropriate, in the interest of complete justice, to remit the matter to the authority to re-examine the assessee's application under section 80G after collecting the relevant information. 3.2 The Tribunal directed that the authority should consider the facts of the case afresh, call for and obtain necessary information from the assessee, and then decide the grant of registration strictly in accordance with law, after affording proper opportunity of being heard. Conclusions 3.3 The matter was remanded to the authority for de novo consideration of the assessee's application for approval under section 80G(5), with a direction to collect relevant information and pass a fresh order in accordance with law after giving due opportunity to the assessee. 3.4 The appeal was allowed for statistical purposes, with no final adjudication on the merits of entitlement to approval under section 80G(5).