ITAT Remits Tax Applications u/s 80G(5) and 12AB Back to CIT(E) for Fresh Adjudication

The Income Tax Appellate Tribunal (ITAT) has recently made a significant decision regarding the tax applications of Lotsawa Rinchen Zangpo, an educational trust. The CIT(E) had previously granted multiple opportunities for the assessee to present their case, but these were not availed of. On the final hearing date, no one appeared on behalf of the assessee, leading the department to proceed with the adjudication using the assistance of a departmental representative.

Thereafter, the applications for approval under Section 80G(5)(ii) of the Income Tax Act, 1961, and Section 12AB were rejected on the grounds of non-persuasion. The assessee, dissatisfied with this decision, approached the ITAT, arguing that detailed replies had already been filed but were not considered by the CIT(E), Delhi.

The departmental representative noted that it was unclear from the orders whether the assessee had indeed filed any replies or complied with the opportunities provided. This ambiguity led to a lack of transparency in the decision-making process.

The ITAT, recognizing the importance of procedural fairness and the interests of justice, felt that the matters should be remitted back to the CIT(E) for fresh adjudication and consideration. The bench, consisting of Mahavir Singh (Vice President) and Sanjay Awasthi (Accountant Member), allowed the appeal for statistical purposes.

This decision underscores the need for thorough and transparent adjudication processes in tax matters, ensuring that all relevant information is considered and that assessees are given a fair opportunity to present their case. The remittance back to the CIT(E) is expected to provide a more comprehensive and just outcome for the Lotsawa Rinchen Zangpo Education Trust.

The case, titled 'Lotsawa Rinchen Zangpo Education Trust vs Commissioner of Income Tax', was heard on 03 April 2026, with Shri Sharvan Kumar representing the respondent. The decision by the ITAT highlights the importance of due process and the need for careful consideration of all documents and responses provided by the assessee.

In the interest of justice and procedural fairness, the ITAT's decision to remit the matter back to the CIT(E) is a significant step towards ensuring that tax applications are adjudicated in a transparent and equitable manner. This case serves as a reminder to both tax authorities and assessees about the importance of thorough documentation and clear communication in tax proceedings.