Kayantar Foundation faced rejection of tax exemption applications under sections 12A and 80G of the Income Tax Act, which led to the appeals ITA Nos.2699 & 2700/Del/2022. These appeals address the procedural fairness in handling exemption applications.
The Foundation argued that the CIT (Exemption) erred both factually and legally by not considering its submissions and failing to provide an effective opportunity to be heard before rejecting the exemption claims.
During the tribunal proceedings, the Foundation presented additional documentation to support its eligibility for exemption. The Tribunal noted a lack of adequate opportunity provided by the CIT (Exemption) to the Foundation for making its case.
This case highlights the critical importance of ensuring procedural justice in the administration of tax laws, especially in matters involving exemptions that significantly impact the financial operations of non-profit entities.
The ITAT set aside the CIT (Exemption)’s orders and remanded the case for a fresh decision, mandating a thorough review of the submitted materials and a proper hearing. This outcome underscores the judiciary’s role in safeguarding the rights of taxpayers to a fair process.
The decision was pronounced on June 28, 2023, providing another opportunity for Kayantar Foundation to substantiate its claims for tax exemptions.
Case Review: Kayantar Foundation vs. CIT on Exemption Rejection, ITA No.2699/DEL/2022
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