SMT BASANTI DEVI FOUNDATION,JODHPUR vs. CIT EXEMPTION, JAIPUR

We have considered the explanation furnished by the assessee in the respective condonation petitions. Having regard to the circumstances explained therein, particularly the illness and subsequent demise of the director to whose e-mail address the impugned orders were communicated, we are satisfied that the assessee was prevented by sufficient cause from filing the appeals within the prescribed period. The delays are neither deliberate nor attributable to any want of bona fides on the part of the assessee. Accordingly, the delay of 32 days in ITA No. 314/Jodh/2025 and the delay of 34 days in ITA No. 329/Jodh/2025 are condoned. Both appeals are admitted for adjudication on merits.

The grounds raised by the assessee in ITA No. 314/Jodh/2025 are:

The assessee was granted provisional registration and provisional approval in Form No. 10AC on 24.05.2022, stated to be valid up to assessment year 2025-26. On 29.06.2024, the assessee filed an online application in Form No. 10AB under clause (iii) of section 12A(1)(ac), seeking regular registration under section 12AB of the Act. The learned CIT(E) issued a questionnaire dated 03.09.2024 requiring the assessee to

For examining the genuineness of the activities, the learned CIT(E) required the assessee to furnish, inter alia, the list of donors, annual accounts, bank statements, bills and vouchers, ledger accounts, photographs of activities, particulars of beneficiaries, details of blood donation camps and particulars of payments made to persons specified in section 13(3) of the Act.

The learned CIT(E) observed that the assessee had not furnished complete supporting records relating to its expenditure and charitable activities. It was further observed that the assessee had not furnished complete particulars of the blood donation camps, beneficiaries, payments made to persons specified in section 13(3), mementos given to blood donors and food packets stated to have been distributed to poor persons. The learned CIT(E), therefore, held that the activities of the

Accordingly, by order dated 23.12.2024 passed in Form No. 10AD, the learned CIT(E) rejected the application seeking registration under section 12AB on the ground of non-genuineness of activities. By invoking section 12AB(1)(b)(ii)(B), the learned CIT(E) also cancelled the provisional registration granted to the assessee on 24.05.2022.

The assessee had separately filed an application in Form No. 10AB on 29.06.2024 seeking approval under section 80G(5)(iii). The learned CIT(E) observed that registration under section 12A or section 12AB, or notification under section 10(23C), was a precondition for granting approval under section 80G. Referring to the rejection of the assessee’s application under section 12AB and observing that the genuineness of its activities remained unverified, the learned CIT(E) rejected the application seeking approval under section 80G.

Consequently, by a separate order dated 23.12.2024 passed in Form No. 10AD the learned CIT(E) rejected the application under section 80G(5)(iii) and also cancelled the provisional approval granted to the assessee on 24.05.2022.

Before us, by way of written submission, the learned Authorised Representative (AR) submitted that the assessee-company was incorporated on 02.07.2021 under section 7(2) read with section 8(1) of the Companies Act, 2013. The learned AR submitted that the objects of the assessee are charitable in nature and extend throughout India. He referred to the objects contained in the memorandum of association and submitted that the assessee was established, inter alia, to promote and facilitate educational, social, economic and medical relief to poor and downtrodden persons; undertake objects of general public utility and community welfare; promote commerce, art, science, sports, education, research, social welfare, religion, charity and protection of the environment; and promote the study, practice and knowledge of music, art and science.

Adverting to the finding of the learned CIT(E) regarding non- genuineness of the activities, the learned AR submitted that the finding was contrary to the documentary evidence furnished by the assessee. According to him, the assessee had furnished all the documents called

The learned AR submitted that the assessee had furnished the following documents before the learned CIT(E) and had again placed them in the paper book:

With regard to the observation concerning non-production of bills, vouchers, bank statements, bank book, cash book and payment particulars, the learned AR submitted that the assessee had furnished detailed replies dated 11.11.2024 and 12.12.2024, copies of which were placed at pages 166 to 176 of the paper book. The bills and vouchers relating to charitable expenditure, along with photographs of the activities, were placed at pages 60 to 74. The financial statements and related accounts were stated to have been furnished at pages 26 to 58 of the paper book.

As regards the details of bank transactions exceeding Rs.10,000/-, the learned AR submitted that the requisite particulars had been furnished along with the detailed reply dated 12.12.2024 and were placed at page 174 of the paper book. In relation to the query concerning payments to persons specified in section 13(3), he submitted that the

With regard to the blood donation camp, the learned AR submitted that the relevant particulars had been furnished through the reply dated 12.12.2024, placed at pages 174 and 175 of the paper book. He submitted that a Government doctor had been deputed for the blood donation camp and no payment was made by the assessee to the doctor. Compounders from the Government hospital had attended the camp with the requisite kit and collected blood from the donors.

The learned AR submitted that the blood donation camp was organised at CYB-4, BLG House, Cyber Park, near Saras Dairy, Heavy Industrial Area, Jodhpur-342003, Rajasthan. The blood collected at the camp was handed over to the Government Hospital, Jodhpur, for use by needy persons. He further submitted that the assessee incurred expenditure of Rs.8,282/- during the financial year 2021-22 towards refreshments, including tea, coffee and samosas, supplied at the camp. Mementos were also given to the blood donors who participated in the camp during that year.

On the strength of the aforesaid material, the learned AR contended that the assessee had duly responded to the queries raised by the learned CIT(E) and had furnished documentary evidence demonstrating the genuineness of its charitable activities. It was submitted that the applications under sections 12AB and 80G had been rejected without proper appreciation of the evidence and without affording an effective opportunity to the assessee.

The learned DR submitted that, in the absence of the aforesaid particulars and supporting evidence, the activities of the assessee were

We have heard the rival submissions and perused the material available on record. The learned CIT(E) rejected the application seeking registration under section 12AB principally on the ground that the assessee had not furnished complete documentary evidence concerning its charitable activities and expenditure. The learned CIT(E) recorded that the assessee had not furnished bills and vouchers, ledger accounts, payment particulars, photographs of activities, details of payments to persons specified in section 13(3), particulars of mementos given to blood donors and supporting evidence concerning the distribution of food packets to poor persons.

On the other hand, the learned AR has specifically referred to the documents placed in the paper book, including the annual accounts at pages 26 to 58, photographs and particulars of charitable activities at pages 60 to 68, bills and vouchers at pages 69 to 74, detailed replies at pages 166 to 176, list of donors at page 169, bank particulars at page 170

We have heard the rival submissions and perused the material available on record. The learned CIT(E) rejected the application seeking registration under section 12AB on the ground that the assessee had not furnished sufficient documentary evidence to establish the genuineness of its charitable activities. The learned CIT(E) recorded that the assessee failed to furnish bills and vouchers, ledger accounts, payment particulars, photographs of activities, details of payments to persons specified in section 13(3), particulars of mementos given to blood donors and supporting evidence concerning the distribution of food packets to poor persons.

The aforesaid findings, however, are not borne out by the material placed before us. The assessee furnished its certificate of incorporation, memorandum and articles of association at pages 1 to 25 of the paper book; annual accounts for the preceding three years at pages 26 to 58; photographs and particulars of charitable activities at pages 60 to 68;

The memorandum of association shows that the assessee was incorporated under section 8 of the Companies Act, 2013 for charitable objects, including educational, social and medical relief to poor and downtrodden persons, community welfare and other objects of general public utility. There is no finding in the impugned order that any of the objects of the assessee is non-charitable or that its activities were undertaken for the benefit of any particular religious community or caste.

The material placed on record further shows that the assessee undertook charitable activities consisting of organisation of a blood donation camp, distribution of food packets to poor persons and donation of steel benches to MDM Hospital. The assessee furnished bills, vouchers, ledger accounts, photographs and payment particulars relating to these activities. In relation to the blood donation camp, the assessee explained that a Government doctor and compounders from a

The assessee also furnished an explanation that no payment was made to any person specified in section 13(3) of the Act. In respect of the other charitable activities, the assessee produced evidence of expenditure of Rs.11,000/- on distribution of food packets to poor persons and Rs.21,000/- on donation of steel benches to MDM Hospital. The corresponding ledger accounts and bills were placed at pages 69 to 74 of the paper book. The learned CIT(E) has neither discussed these documents nor recorded any finding that they were false, unreliable or unrelated to the stated charitable activities.

The learned CIT(E) proceeded on the premise that the assessee had furnished only a resolution contained in its articles of association. This observation is contrary to the replies and supporting documents placed in the paper book. The impugned order does not deal with the contents of the replies dated 11.11.2024 and 12.12.2024 or with the supporting accounts, bills, vouchers, bank particulars and activity records furnished

We have noted the judicial precedents relied on by the assessee. The collective ratio emerging from the decisions is that an application seeking registration under section 12AB cannot be rejected without a proper examination of the documents and explanations furnished by the applicant. Where the alleged deficiencies relate to non-production or incomplete production of supporting documents, such deficiencies are curable and the applicant must be afforded an effective opportunity to place the requisite material on record. These decisions further recognise that the satisfaction concerning the genuineness of the activities must be founded upon an objective consideration of the evidence and not merely upon an allegation of non-compliance. They also hold that where approval under section 80G is rejected as a consequence of rejection of registration under section 12AB, the decision concerning section 80G must necessarily follow the determination made in the proceedings under section 12AB.

The aforesaid principles squarely apply to the present case. The assessee had furnished the documents and explanations relating to its

Ordinarily, where further factual verification is required, the matter may be restored to the learned CIT(E). In the present case, however, the relevant documents are already available on record and have been specifically identified by the assessee. The learned DR has not pointed out any particular defect in these documents or any activity of the assessee which is contrary to its stated charitable objects. The dispute does not concern the absence of material but the failure of the learned CIT(E) to consider the material furnished. In these circumstances, restoring the matter merely for reconsideration of the same evidence would unnecessarily prolong the proceedings.

The scope of enquiry under section 12AB is to ascertain whether the objects of the applicant are charitable and whether its activities are genuine. The genuineness of the activities does not depend upon the scale or quantum of the charitable expenditure. What is required is that

The assessee is a section 8 company and its activities are consistent with its stated charitable objects. There is no allegation or finding concerning diversion of funds, private benefit, violation of section 13, non-charitable application of income or carrying on of activities for profit. The documentary evidence furnished by the assessee has also not been found to be false or unreliable. We, therefore, hold that the charitable nature of the objects and the genuineness of the activities stand established.

We, therefore, hold that the objects of the assessee are charitable and that the genuineness of its activities stands established by the material placed on record. Since the relevant documents are already available and no further factual verification has been shown to be necessary, restoration of the matter to the learned CIT(E) would amount to directing reconsideration of the same material and would unnecessarily prolong the proceedings.

Coming to the application under section 80G(5)(iii), the learned CIT(E) rejected the application principally because the application seeking registration under section 12AB had been rejected. No independent violation of any condition prescribed under section 80G or rule 11AA of the Income Tax Rules, 1962 has been identified in the impugned order.

Since the assessee is held entitled to registration under section 12AB and the learned CIT(E) has not recorded any independent ground of ineligibility under section 80G, the very foundation of the rejection under section 80G ceases to survive. The genuineness of the activities is established by the material placed on record and no useful purpose would be served by restoring the application for reconsideration.

In the result, ITA No. 314/Jodh/2025 and ITA No. 329/Jodh/2025 filed by the assessee are allowed.