Serving Notice Solely Through the ITBA Portal is Invalid and Cannot Justify Denying Trust Registration or Approvals

By | June 15, 2026
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Serving Notice Solely Through the ITBA Portal is Invalid and Cannot Justify Denying Trust Registration or Approvals

Issue

  1. Whether serving statutory notices exclusively through the Income Tax Business Application (ITBA) portal constitutes a valid method of service under Section 282(1) read with Rule 127(1), and whether an application for fresh registration under Section 12AB can be dismissed for non-compliance with such notices.

  2. Whether the consequential denial of approval under Section 80G(5) can be sustained when the underlying rejection of Section 12AB registration has been set aside and remanded for fresh adjudication.

Facts

  • Assessee Profile: The assessee is a charitable society dedicated to providing accommodation and care to chronically ill, permanently disabled, and leprosy-cured individuals.

  • Registration Application: The society filed Form 10AB seeking fresh registration under Section 12A(1)(ac) / Section 12AB.

  • Issuance of Notices: The CIT(Exemption) issued informational notices solely through the ITBA portal. Because the assessee did not respond, the CIT(Exemption) dismissed the registration application in limine (at the threshold) for non-prosecution.

  • Denial of 80G Approval: Following the rejection of the Section 12AB registration, the CIT(Exemption) also rejected the society’s application for approval under Section 80G(5) relying entirely on the fact that registration had been denied.

Decision

  • Invalid Service of Notice: The court held that merely uploading notices to the ITBA portal does not satisfy the legal requirements for the valid method and manner of service specified under Section 282(1) read with Rule 127(1).

  • Section 12AB Matter Remanded: Because the assessee was not properly served, the dismissal was set aside. The matter was remitted back to the CIT(Exemption) for a de novo (fresh) disposal after providing a reasonable and effective opportunity for the assessee to be heard.

  • Section 80G Matter Remanded: Since the denial of the Section 80G approval was based solely on the invalid rejection of the Section 12AB registration, the 80G order could not be sustained. This application was also remitted back to the CIT(Exemption) for fresh consideration alongside the registration application.

Key Takeaways

  • Portal Uploading Is Not Full Service: Income Tax authorities cannot treat the mere uploading of a communication onto the ITBA portal as a complete and legally binding service of notice unless the prescribed modes under Section 282 and Rule 127 are properly satisfied.

  • Natural Justice Over Technical Dismissals: Applications for charitable status cannot be summarily dismissed for non-prosecution without ensuring that the taxpayer actually received the communication and had a fair opportunity to respond.

  • Interdependent Approvals: Rejections of consequential tax benefits (like Section 80G donor deductions) that rely entirely on the rejection of primary registrations (like Section 12AB) will automatically collapse and require re-evaluation if the primary rejection is overturned or remanded.

IN THE ITAT CHENNAI BENCH ‘C’
Cheshire Homes India KATP
v.
Commissioner of Income-tax , Exemptions*
ABY T. VARKEY, Judicial Member
and Inturi Rama Rao, Accountant Member
IT Appeal Nos. 950 & 951 (CHNY) of 2026
MAY  25, 2026
S. Krishnan and S. Nageswaran, FCAs for the Appellant. Bipin C.N., CIT for the Respondent.
ORDER
Inturi Rama Rao, Accountant Member. – These are two appeals filed by the assessee are directed against the separate orders of Learned Commissioner of Income Tax(Exemption), Chennai denying grant of approval u/s.12AB(4) and 80G of the Income Tax Act, 1961 both dated 01.12.2025.
2. Since identical facts and issues are involved in both these appeals, these appeals were heard together and disposed of by this common order. For the sake of clarity and convenience the facts relevant in the ITA No.950/CHNY/2026 are stated herein:
3. The Assessee in ITA No.950/CHNY/2026 raised the following grounds of appeal :
“1. On the facts and circumstances of the case, the order dated 01/12/2025 passed by the Learned Commissioner of Income Tax (Exemptions) rejecting the renewal of approval under section 80G (5) of the appellant CHESHIRE HOMES INDIA KATP without affording an opportunity by issuing a personal hearing notice and / or giving one more opportunity is contrary to law, facts of the case and weight of evidences when the registration form in FORM 12AB has been filed with all enclosures well within time ON 25/06/2025 WHEN THE LAST DATE OF FILING WAS 30/09/2025.
2. On the facts and circumstances of the case the Appellant thus be given one more opportunity to file all details called by the Commissioner of Income tax (Exemptions) Chennai 600034 vide his letter dated 10/09/2025 and to appear in person.
3. The Appellant CHESHIRE HOMES INDIA KATP craves leave to add, amend, alter, vary and or withdraw any or all of the above grounds of appeal.”
4. Briefly the facts of the case are that the appellant is a society duly registered under the Societies Act. It is formed with the object of providing accommodation on the lines of a home for the care, treatment, nourishment and general well-being of men, women and children of all communities and classes who are chronically ill and/or are permanently disabled or that of leprosy cured and who are without any means or resources or of limited means and resources. The Trust was duly registered u/s.12A of the Income Tax Act, 1961 on 18.03.2004 and the provisional registration was granted and the appellant had filed an application in Form-10AB seeking registration u/s.12A(1)(ac) of the Income Tax Act, 1961. On receipt of the application, the ld.CIT(Exemption) issued notices calling for certain information through ITBA Portal. However, the appellant could not comply with the said notices.
5. Being aggrieved, the appellant preferred an appeal before us in the present appeal. It is submitted that the appellant could not comply to the notices issued by the ld.CIT(Exemption), no notice was served on the appellant society.
6. On the other hand, ld.CIT-DR opposed the above submissions.
7. We heard the rival submissions and perused the material on record. At the outset, we find that the ld.CIT(Exemption) dismissed the appeal in limine for non-prosecution. We also find that ld.CIT(Exemption) issued notices through ITBA Portal which is not a proper service of notice.
8. In our considered opinion, it is not a valid method and manner of service of notice as specified under the provisions of section 282(1) of the Income-tax Act, 1961 Act and Rule 127(1) of the Income-tax Rules, 1962. Therefore, it is crystal clear that the notices were not served upon the appellant. To fortify our view, we would like to make reference to a decision rendered by the Hon’ble Punjab & Haryana High Court in the case of Munjal BCU Centre of Innovation and Entrepreneurship v. CIT (Exemptions ) [2024]  629/463 ITR 560 (Punjab & Haryana), wherein the Hon’ble High Court after making reference to provisions of 282(1) held that service of notice through ITBA portal is not valid service and remanded the matter to AO for de novo disposal of case. The relevant paragraphs of the judgment are reproduced below :
“7. We are afraid that we cannot subscribe to the submissions as advanced by the learned counsel for the Revenue-respondent. The provisions of section 282(1) of the Act of 1961 and rule 127(1) of the Income-tax Rules, 1962 provides for a method and manner of service of notice and orders which read as follows :
…………………………….
…………………………….
8. In view of the above, it is essential that before any action is taken, communication of the notice must be done in terms of the provisions as enumerated hereinabove. The provisions do not mention communication to be “presumed” by placing notice on the e-portal. A pragmatic view has to be adopted always in these circumstances. An individual or a company is not expected to keep the e-portal of the Department open all the time so as to have knowledge of what the Department is supposed to be doing with regard to the submissions of forms etc. The principles of natural justice are inherent in the income-tax provisions and the same are required to be necessarily followed.
9. Having noticed as above, this court is of the firm view that the petitioner has not been given sufficient opportunity to put up its please with regard to the proceedings under section 12A(1)(ac)(iii) of the Act of 1961 and as it was not served with any notice. Therefore, he would be entitled to file his reply and the Department would of course be entitled to examine the same and pass a fresh order thereafter.
10. In view of the above, the writ petition is allowed and the order dated January 16, 2023 (annexure P-5) is quashed and set-aside. The Department would provide an opportunity of hearing to the petitioner and they will also allow the petitioner to appear personally for the purpose and pass a speaking order independent of the order passed earlier by them on January 16,2023. The same shall be done expeditiously provided the petitioner file his reply within a period of three weeks.”
9. In view of the above legal position, we are of the considered opinion that proper notice(s) of hearing were not served upon the appellant. Therefore, we are of the considered opinion that in the interest of justice, the matter should be remitted back to the file of ld.CIT(Exemption) for denovo disposal of application after affording reasonable opportunity to the appellant, in accordance with law.
10. In the result, the appeal filed by the assessee stands partly allowed for statistical purposes.
ITA No.951/CHNY/2026 – 80G
11. From the perusal of the ld.CIT(E) order, we observe that ld.CIT(E) denied the grant of approval u/s.80G(5) of the Act, merely for the reason that the appellant trust was denied registration u/s.12AB of the Act. In the appeal above in ITA No.950/CHNY/2026, we directed the matter back to the file of ld.CIT(E) for denovo adjudication, therefore, following the parity of the same reasoning, this appeal in ITA No.951/CHNY/2026 is also remitted back to the file of ld. CIT(Exemption) for denovo disposal of application after affording reasonable opportunity to the appellant, in accordance with law.
12. In the result, appeal filed by the assessee in ITA No.951/CHNY/2026 is partly allowed for statistical purposes.
13. To sum up, both appeals of the assessee are partly allowed for statistical purposes.