SPARC SAMUDAYA NIRMAN SAHAYAK,MUMBAI vs. DCIT (EXEMPTIONS), CIRCLE-2, MUMBAI

PDF · subscribers
ITA 3987/MUM/2026Status: DisposedITAT Mumbai30 June 20268 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the rejection orders were passed without affording the assessee a clear understanding of the deficiencies and a reasonable opportunity to comply. Therefore, the impugned orders were set aside.

What were the facts?

The assessee's applications for renewal of registration under section 12AB and approval under section 80G were rejected by the CIT(E) for not furnishing complete documents and details. The assessee argued that the notice issued by the CIT(E) was vague and did not specify the deficiencies.

What were the issues?

Whether the rejection of applications for renewal of registration and approval was based on a proper procedure, including specific notice of deficiencies and a reasonable opportunity to comply.

Which sections of the Income-tax Act were involved?

Section 12AB,Section 80G

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH MUMBAI

Before: SHRI SAKTIJIT DEY & SHRI MAKARAND VASANT MAHADEOKAR

For Appellant: Shri Dharmesh Shah & Ms. Mitali
For Respondent: Shri Yogesh Kamat, Ld. DR
Hearing: 25.06.2026Pronounced: 30.06.2026

Heard together (2 matters)

ITA No. 3987/Mum/2026
ITA No. 3988/Mum/2026

Read from the judgment's own cause title. This page is filed under one of them.

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH MUMBAI BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT & SHRI MAKARAND VASANT MAHADEOKAR, ACCOUNTANT MEMBER 1. ITA No. 3987/Mum/2026 (Assessment Year: N.A.) 2. ITA No. 3988/Mum/2026 (Assessment Year: N.A.) Sparc Samudaya DCIT (Exemptions), Nirman Sahayak Circle-2 Vs. 503, Jolly Bhavan No. 6th Floor, Cumblla Hill, 1, New Marine Lines, Mtnl Building, Pedder Churchgate, Mumbai- Road,Mumbai-400026, 400020, Maharashtra Maharashtra PAN/GIR No. AABTS8659N (Applicant) (Respondent) Assessee by Shri Dharmesh Shah & Ms. Mitali M.Parekh, Ld. ARs Revenue by Shri Yogesh Kamat, Ld. DR Date of Hearing 25.06.2026 Date of Pronouncement 30.06.2026 आदेश / ORDER PER MAKARAND VASANT MAHADEOKAR, AM: These two appeals preferred by the assessee are directed against two separate orders, both dated 04.03.2026, passed by the learned Commissioner of Income Tax (Exemptions), Mumbai

2 ITA No. 3987 & 3988/Mum/2026 Sparc Samudaya Nirman Sahayak

[“the learned CIT(E)”]. In ITA No. 3987/Mum/2026, the assessee has challenged the rejection of its application for renewal of registration under section 12AB of the Income-tax Act, 1961 [“the Act”]. In ITA No. 3988/Mum/2026, the assessee has challenged the rejection of its application for renewal of approval under section 80G of the Act. Since the appeals arise out of the same set of facts and the order under section 80G is consequentially founded upon the rejection of the application under section 12AB, both appeals were heard together and are being disposed of by this consolidated order.

2.

The grounds of appeal raised by the assessee are reproduced as under:

ITA No. 3987/Mum/2026 Following grounds of appeal are without prejudice to each other: The Ld. CIT(E) has erred in law and in facts in passing order and rejecting application for renewal of registration u/s. 12AB of the Act to the appellant. The appellant craves leave to add to, amend, alter or delete all or any of the foregoing grounds of appeal. ITA No. 3988/Mum/2026 Following grounds of appeal are without prejudice to each other: The Ld. CIT(E) has erred in passing order and rejecting application for renewal of registration thereby rejecting approval u/s. 80G of the Act to the appellant. The appellant craves leave to add to, amend, alter or delete all or any of the foregoing grounds of appeal.

3 ITA No. 3987 & 3988/Mum/2026 Sparc Samudaya Nirman Sahayak

Facts in brief 3. The assessee, engaged in charitable activities, filed Form No. 10AB on 29.09.2025 under section 12A(1)(ac)(ii) of the Act seeking renewal of registration under section 12AB. The learned CIT(E), by order dated 04.03.2026 passed in Form No. 10AD, rejected the application on the ground that the assessee had not furnished the complete documents and details required under Rule 17A(2), despite notice dated 11.01.2026. The learned CIT(E) held that, in the absence of the requisite compliance, satisfaction regarding the objects, genuineness of activities and compliance with applicable laws could not be recorded under section 12AB(1)(b) of the Act. 4. The assessee also filed Form No. 10AB on 29.09.2025 seeking renewal of approval under section 80G(5). The learned CIT(E), by order dated 04.03.2026 passed in Form No. 10AD, rejected the application on the ground that the assessee’s application for registration under section 12AB had already been rejected and, consequently, the condition prescribed under section 80G(5)(i) was not satisfied. 5. It is, however, noticed that the order under section 80G refers to the order rejecting registration under section 12AB as dated 04.02.2026, whereas the said order placed on record is dated 04.03.2026.

4 ITA No. 3987 & 3988/Mum/2026 Sparc Samudaya Nirman Sahayak

6.

The learned Authorised Representative (AR) submitted that the learned CIT(E) had issued only one notice dated 21.01.2026 before rejecting the applications. It was contended that the said notice did not specifically point out the precise deficiencies in the applications or identify the particular documents which, according to the learned CIT(E), had not been furnished. 7. The learned AR further submitted that the material and documents already available on record were not considered by the learned CIT(E). The impugned order merely contains a general observation that the application was incomplete and that all the terms of the notice had not been complied with, without specifying the particular deficiency or recording any finding in respect of the material furnished by the assessee. 8. It was submitted that the assessee had not been afforded an effective and meaningful opportunity to cure the alleged deficiencies. The learned AR, therefore, requested that the impugned orders be set aside and both applications be restored to the file of the learned CIT(E) for fresh consideration after issuing a specific notice identifying the deficiencies and after granting a reasonable opportunity to the assessee to furnish the requisite documents and explanations. 9. The learned Departmental Representative relied upon the respective orders passed by the learned CIT(E). However, he did not raise any objection to the matters being restored to the file of the learned CIT(E) for fresh adjudication in accordance with law.

5 ITA No. 3987 & 3988/Mum/2026 Sparc Samudaya Nirman Sahayak

10.

We have considered the rival submissions and perused the material placed before us, including the two impugned orders passed by the learned CIT(E). 11. In the order relating to registration under section 12AB, the learned CIT(E) has stated that the application was incomplete, that all the accompanying documents had not been furnished and that the assessee had failed to comply with all the terms of the notice dated 11.01.2026. However, the impugned order does not enumerate the specific documents which remained to be furnished, nor does it identify the particular requisition contained in the notice which was allegedly not complied with by the assessee. 12. The order also does not discuss the material stated to have been furnished by the assessee or record any finding as to why such material was insufficient for examining the objects of the assessee, genuineness of its activities and compliance with other applicable laws. The rejection is founded upon a general allegation of non-compliance without disclosing the precise deficiency which prevented the learned CIT(E) from examining the application on merits. 13. When an application for registration or renewal is proposed to be rejected on account of non-furnishing of documents or information, the assessee must be informed with reasonable clarity of the particular documents or information required to be furnished. An opportunity which does not specify the alleged

6 ITA No. 3987 & 3988/Mum/2026 Sparc Samudaya Nirman Sahayak

deficiency cannot be regarded as an effective opportunity to cure the same. The statutory exercise contemplated under section 12AB(1)(b) requires due examination of the material available on record and, where further material is considered necessary, a specific requisition followed by a reasonable opportunity of compliance. 14. In the present case, only one notice dated 11.01.2026 was issued. The order does not demonstrate that, thereafter, any specific deficiency was communicated to the assessee or that the material already available on record was examined before rejecting the application. In these circumstances, and having regard to the fair stand taken by the learned Departmental Representative, we consider it appropriate to set aside the impugned order dated 04.03.2026 rejecting the application for renewal of registration under section 12AB. 15. The application for approval under section 80G has been rejected solely on the basis that the application for registration under section 12AB had been rejected and that the assessee consequently did not satisfy the requirement of section 80G(5)(i). Since the foundational order rejecting registration under section 12AB is being set aside and restored for fresh adjudication, the consequential order rejecting the application under section 80G cannot independently survive in its present form. 16. Accordingly, both the impugned orders dated 04.03.2026 are set aside and the respective applications are restored to the

7 ITA No. 3987 & 3988/Mum/2026 Sparc Samudaya Nirman Sahayak

file of the learned CIT(E) for fresh adjudication in accordance with law. 17. The learned CIT(E) shall first adjudicate the assessee’s application for renewal of registration under section 12AB. In case any further document, information or clarification is required, the learned CIT(E) shall issue a specific notice clearly identifying each deficiency and shall grant the assessee a reasonable opportunity to furnish the requisite material and explanations. The learned CIT(E) shall consider all the documents and material already available on record as well as such further material as may be furnished by the assessee and shall pass a reasoned and speaking order. 18. Thereafter, the learned CIT(E) shall adjudicate the application for renewal of approval under section 80G independently in accordance with the provisions of section 80G(5), having regard to the outcome of the proceedings under section 12AB and after granting a reasonable opportunity of hearing to the assessee. 19. The assessee is also directed to extend full cooperation in the proceedings and to furnish the documents, information and explanations called for by the learned CIT(E) within the time permitted. We have not expressed any opinion on the merits of either application, and all issues are left open for consideration by the learned CIT(E).

8 ITA No. 3987 & 3988/Mum/2026 Sparc Samudaya Nirman Sahayak

20.

In the result, both appeals filed by the assessee are allowed for statistical purposes.

Order pronounced in the open court on 30.06.2026.

Sd/- Sd/- (SAKTIJIT DEY) (MAKARAND VASANT MAHADEOKAR) VICE PRESIDENT ACCOUNTANT MEMBER Mumbai, Dated 30/06/2026 Dhananjay, Sr.PS आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : 1. अपीलाथी / The Appellant 2. प्रत्यथी / The Respondent. संबंधधत आयकर आयुक्त / The CIT(A) 3. आयकर आयुक्त(अपील) / Concerned CIT 4. धिभागीय प्रधतधनधध, आयकर अपीलीय अधधकरण, मुम्बई / DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. 6. आदेशानुसार/ BY ORDER, सत्याधपत प्रधत //True Copy// 1. उि/सहायक िंजीकार ( Asst. Registrar) आयकर अिीिीय अतिकरण, मुम्बई / ITAT, Mumbai

More judgments on Section 12AB

All 5,972 judgments and leading authorities on Section 12AB →

Recent GST High Court judgments

Search GST case law →