SHRI MULUND (E)VARDHMAN STHANAK VASHI JAIN SHRAVAK SANGH,MULUND EAST vs. CIT (EXEMPTION), CUMBALLA HILLS

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ITA 2935/MUM/2026Status: DisposedITAT Mumbai15 July 2026AY 2026-275 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the principles of natural justice require a fair and effective opportunity to be heard before rejecting an application with significant civil consequences. Since this was not afforded, the matter was restored.

What were the facts?

The assessee's application for renewal of registration under Section 12AB was rejected by the CIT(E) for non-compliance with a notice seeking additional documents. The assessee argued that they were not given an effective opportunity to respond.

What were the issues?

Whether the rejection of a Section 12AB registration renewal application without affording an effective opportunity of being heard violates principles of natural justice.

Which sections of the Income-tax Act were involved?

Section 12AB

AI-generated summary — verify with the full judgment below

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “G” MUMBAI

BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI PAWAN SINGH (JUDICIAL MEMBER)

ITA No. 2935/MUM/2026 Assessment Year: 2026-27

Shri Mulund (E), Vardhman CIT (Exemption), 601, 6th Floor, Sthanak Vashi, Jain Shravak Cumballa Hill, MTNL TE Sangh, 101/102, Vs. Building, Pedder Road, Dr. Kailashdham, G.V. Scheme Gopalrao Deshmukh Marg, Road No.4, Mulund (E), Cumballa Hill, Mumbai – 400026, Mumbai – 400080. Maharashtra. PAN NO. AACTS 0972 R Appellant Respondent

: Ms. Vinitha Nara, Adv Assessee by Revenue by : Shri Basavaraj Hiremath – CIT DR a/w Shri Rajgopal Parthasarathi – SR DR.

: 13/07/2026 Date of Hearing : 15/07/2026 Date of pronouncement ORDER U/s 254(1) of the Income-Tax Act,1961 PER OM PRAKASH KANT, AM

This appeal by the assessee is directed against the order dated 01.03.2026 passed by the learned Commissioner of Income Tax (Exemptions), Mumbai [hereinafter referred to as "the Ld. CIT(E)"], whereby the application filed by the assessee for renewal of

Shri Mulund (E) Vardhman Sthanak 2 ITA No. 2935/MUM/2026

registration under section 12AB of the Income-tax Act, 1961 ("the Act") came to be rejected.

2.

We have heard the rival submissions and carefully perused the material available on record. The record reveals that the Ld. CIT(E) issued a notice dated 22.01.2026 calling upon the assessee to furnish the requisite details and documents in support of its application in Form No. 10AB. It is an admitted position that the assessee did not furnish the requisite compliance pursuant to the said notice. Consequently, without granting any further opportunity, the Ld. CIT(E) proceeded to reject the application by observing as under:

“2. On verification of the application in Form 10AB filed by the applicant, it was found that the application was not complete, and all the documents required to be accompanying the application were not furnished. Hence, a notice was issued to the applicant vide notice dated 22.01.2026 requesting the applicant to furnish the complete set of documents/details as required under Rule 17A(2). However, the applicant has not complied with all terms of the said notice, till date. 3. Since registration under section 12AB is to be granted in terms of the provisions of section 12AB(1)(b) of the Act after being satisfied about the objects of the trust or institution, the genuineness of activities, and the compliance of any other law for the time being in force as are material for the purposes of achieving its objects. In absence of necessary compliance by the applicant, the undersigned is unable to arrive at a satisfactory conclusion on these parameters. As such, the undersigned is left with no other option but to reject the application seeking renewal of registration under section 12AB of the Act. However, the applicant is at liberty to pursue the remedies available in Statute, without any prejudice. 4. In conclusion, this application for renewal of registration stands rejected on grounds of non-compliance to all the terms of notices issued to the applicant.” 3. Before us, the learned counsel for the assessee submitted that the application came to be rejected solely on account of non-

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compliance with a single notice and that no effective opportunity was afforded to explain the circumstances or to furnish the requisite documents. It was, therefore, pleaded that one final opportunity may be granted to the assessee to place the relevant material before the Ld. CIT(E).

4.

We have given our thoughtful consideration to the rival submissions. The power conferred upon the Commissioner under section 12AB of the Act is coupled with a statutory obligation to examine the objects of the trust, the genuineness of its activities, and the fulfilment of the prescribed conditions before arriving at a satisfaction contemplated under the statute. Equally, such satisfaction must be reached after affording the applicant a fair and effective opportunity of presenting its case. The principles of natural justice are not empty formalities but constitute an integral component of every quasi-judicial proceeding.

5.

In the present case, the impugned order reveals that the application has been rejected primarily on account of non- compliance with the notice dated 22.01.2026. Although the assessee failed to respond to the said notice, the record does not indicate that any further or effective opportunity was afforded before the application was finally rejected. Considering that the consequence of rejection is the denial of statutory registration, which has significant civil consequences, we are of the considered

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view that the ends of justice would be better served by restoring the matter to the file of the Ld. CIT(E) for fresh adjudication.

6.

Accordingly, in the interest of justice and without expressing any opinion on the merits of the assessee's claim, we set aside the impugned order and restore the matter to the file of the Ld. CIT(E). The Ld. CIT(E) shall reconsider the assessee's application for renewal of registration under section 12AB of the Act afresh, after affording the assessee an effective and reasonable opportunity of being heard and after considering such documents and submissions as may be placed on record, in accordance with law. The assessee is also directed to extend full cooperation and file all requisite details and evidences within the time stipulated by the Ld. CIT(E). Failure to do so shall entitle the Ld. CIT(E) to proceed in accordance with law on the basis of the material available on record.

7.

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

Order pronounced in the open Court on 15/07/2026. Sd/- Sd/- (PAWAN SINGH) (OM PRAKASH KANT) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 15/07/2026 M. Ranganath Vittal , Sr. P.S.

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Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file.

BY ORDER, //True Copy// (Assistant Registrar) ITAT, Mumbai

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