ACADEMY OF LIBERAL EDUCATION REGD,SULLIA vs. CIT(EXEMPTION), BANGALORE

In this appeal, the assessee has raised the following grounds: - 1. The learned CIT(E) erred in passing the order in the manner he did.

We have considered the submissions of both sides and perused the material available on record. The brief facts of the case are that the assessee is a trust constituted with the main object of imparting general/technical/medical education by establishing educational institutions. The assessee is registered as a society under the provisions of the Karnataka Societies Registration Act, 1960. There are a total of 13 educational institutions under the assessee trust. After the introduction of the new regime of registration, the assessee was granted registration under section 12A(1)(ac)(i) of the Act from the assessment year 2022-23 to the assessment year 2026-27. For renewal of the registration under section 12AB of the Act, the assessee filed an application in Form 10AB on 24.09.2025. Upon perusal of the said application, the learned CIT(E) observed that the assessee has not furnished its return of income (ITR-7) for the consecutive assessment years 2024-25 and 2025-26 as required under the provisions of section 139(4A)/139(4C) of the Act and has also not furnished the audit report in Form No. 10B/10BB as mandated under section 12A(1)(b) of the Act. Despite the grant of sufficient and adequate opportunities, the assessee failed to respond or make any necessary submissions to the notices issued by the learned CIT(E). Accordingly, vide impugned order, the learned CIT(E) rejected the application filed by the assessee in Form No. 10AB for seeking registration under section 12AB of the Act. Being aggrieved, the assessee is in appeal before us.

During the hearing, the learned Authorised Representative (“learned AR”) submitted that seven educational institutions under the assessee society did not send their books of account, and therefore, the auditor was unable to complete the audit and prepare the financials for the financial year 2023-24. The learned AR submitted that the society, in this regard, issued clear directions to the principal of these educational institutions to furnish the books of accounts and provide necessary cooperation to the auditors. However, these educational institutions failed to provide the books of accounts, due to which the financials of the society for the financial year 2023-24 and subsequent years could not be finalised. It was submitted that, accordingly, the assessee approached the Hon’ble Karnataka High Court seeking necessary directions for obtaining the books of accounts of these seven educational institutions through the Deputy Registrar of Cooperative Societies. The learned AR submitted that, in further litigation in this regard, the principal of these educational institutions furnished the books of account on 29.09.2025 to the statutory auditor, and the tax audit report, as required under the statute, has now been prepared. Thus, the learned AR submitted that due to the aforesaid circumstances, there was a delay in filing the income tax returns, which issue has now been resolved.

Having considered the submissions of both sides and perused the material available on record, we restore the application filed by the assessee for seeking registration under section 12AB of the Act to the file of the learned CIT(E) for de novo adjudication with a direction to the assessee to furnish all the details and comply with all the statutory conditions for seeking registration under section 12AB of the Act. The learned CIT(E) shall be at liberty to seek any other information from the assessee, as per law, while considering the assessee's request for registration under section 12AB of the Act afresh. With the above directions, the impugned order is set aside, and the grounds raised by the assessee are allowed for statistical purposes.

In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 29th June, 2026