SPKS SHIKSHAN FOUNDATION,DADAR EAST-MUMBAI vs. CIT EXEMPTION, CUMBALLA HILLS-MUMBAI

The brief facts of the case are that the applicant trust filed an application seeking regular registration under section 12AB of the Act. The Commissioner of Income-tax (Exemptions) observed that the application filed by the applicant, was incomplete and various documents prescribed under Rule 17A(2) had not been furnished. The CIT(Exemptions) issued notices dated 02.07.2025, 20.08.2025 and 29.08.2025 asking the applicant to furnish the complete set of documents contemplated under Rule 17A. The CIT(Exemptions) held that despite three opportunities having been granted, the assessee / applicant trust did not remove the deficiencies pointed out.

Accordingly, since the applicant had failed to comply with the notices issued by him, CIT(Exemptions) rejected the application filed under section 12AB of the Act.

Further, the applicant had application seeking approval under section 80G(5) of the Act. While considering this application, the CIT(Exemptions) that the application for registration under section 12AB had already been rejected by order dated 16.09.2025. Since the applicant did not possess registration under section 12AB of the Act, the CIT(Exemptions) held that the basic statutory condition for grant of approval under section 80G of the Act was not satisfied.

Accordingly, the Commissioner rejected the application seeking approval under section 80G of the Act.

The assessee is in appeal before us against the order passed by CIT(Appeals) dismissing the appeal of the assessee.

We have heard the rival contentions and perused the material on record.

The CIT(Exemptions) rejected the application on the ground that the assessee / applicant trust did not make compliance and therefore he was unable to satisfy himself regarding the objects of the trust, the genuineness of its activities of the trust and whether the assessee / applicant trust had fulfilled the conditions of section 12AB of the Act. On that basis, CIT(Exemptions) rejected the application filed by the assessee / applicant trust.

We are of the considered view that where the applicant fails to cooperate with the proceedings, the Commissioner cannot be said to be incorrect in requiring the assessee / applicant trust to provide necessary documents for arriving at the satisfaction contemplated under the Statute. At the same time, we also find that in the impugned order CIT(Exemptions) could not examine the applicant's objects, the activities carried out by the assessee or analyze the relevant material which may have been available on record. The CIT(Exemptions) has rejected the application on the basis of non-compliance by the assessee / applicant trust with the notices issued by him. However, considering the totality of the facts and circumstances of the case, and in the interest of justice, we are of the considered opinion that one final opportunity may be granted to the applicant trust to place on record all the requisite documents before the learned CIT(Exemptions) for his consideration. We, therefore, consider it appropriate to restore the matter to the file of the learned CIT(Exemptions) for de novo adjudication.

Accordingly, the appeal of the applicant is allowed for statistical purposes.

This appeal is with respect to the rejection of the applicant's application for grant of approval under section 80G(5) of the Act. We observe that the learned CIT(Exemptions) has rejected the application solely in consequence to the earlier order dated 16.09.2025 whereby the applicant's application for registration under section 12AB of the Act was rejected. The learned CIT(Exemptions) held that since the applicant did not possess registration under section 12AB of the Act, it failed to satisfy the basic condition prescribed under section 80G(5) of the Act, and accordingly the application for approval under section 80G was rejected.

While adjudicating the connected appeal relating to registration under section 12AB of the Act, we have already s restored the matter to the file of the learned CIT(Exemptions) for de novo adjudication after providing adequate opportunity of being heard to the applicant. Since the rejection of approval under section 80G of the Act is dependent upon the outcome of the proceedings under section 12AB of the Act, the impugned order passed under section 80G also cannot survive independently and is accordingly restored to the file of the learned CIT(Exemptions) for de novo consideration.

In the result, appeal of the applicant is allowed for statistical purposes.

In the combined result, both the appeals of the assessee are allowed for statistical purposes.