SRI JAYAGURU NAVADURGA SEVA SAMITHI,HYDERABAD vs. CIT(EXEMPTION), HYD, HYDERABAD

PDF · subscribers
ITA 149/HYD/2026Status: DisposedITAT Hyderabad10 June 2026AY 2023-249 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the rejection was primarily due to non-compliance and that the assessee had provided supporting documents. Therefore, the matter was restored to the CIT(E) for fresh adjudication on merits, and the consequential assessment order was also set aside for reconsideration.

What were the facts?

The assessee society applied for registration under section 12AB and approval under section 80G but failed to comply with notices from the CIT(E). Consequently, their applications were rejected. In a related appeal, the AO denied exemption under section 11 because 12AB registration was not granted.

What were the issues?

Whether the rejection of applications for registration under section 12AB and approval under section 80G due to non-compliance was justified, and the consequential denial of exemption under section 11.

Which sections of the Income-tax Act were involved?

Section 12AB,Section 80G,Section 11,Section 143(2),Section 144,Section 144B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Hyderabad ‘ B ‘ Bench, Hyderabad

Before: Shri Ravish SoodShri Madhusudan Sawdia

Hearing: 04/06/2026

आयकर अपील�य अ�धकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ B ‘ Bench, Hyderabad �ी रिवश सूद,�ाियक सद� एवं �ी मधुसूदन साविड़या लेखा सद� सम� | Before Shri Ravish Sood, Judicial Member A N D Shri Madhusudan Sawdia, Accountant Member आ.अपी.सं /ITA Nos. 149 to 151/Hyd/2026 (िनधा�रण वष�/Assessment Year: 2023-24) Sri Jayaguru Navadurga Vs. CIT (Exemption) Seva Samithi Hyderabad Hyderabad PAN:ABSAS5861R (Appellant) (Respondent) िनधा�रती �ारा/Assessee by: CA Vinod K Suthar राज� व �ारा/Revenue by:: Shri Waseem UR Rehman, CIT (DR) सुनवाई की तारीख/Date of hearing: 04/06/2026 घोषणा की तारीख/Pronouncement: 10/06/2026 आदेश/ORDER Per Bench:

These three appeals are filed by Sri Jayaguru Navadurga Seva Samithi (“the assessee”), feeling aggrieved by the separate orders passed by the Learned Commissioner of Income Tax (Exemption), Hyderabad (“Ld. CIT(E)”) dated 26.06.2023, 12.07.2023 and the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (“Ld. CIT (A)”), dated 20.11.2025 respectively. Since the assessee is same and the issues raised by the assessee in these three appeals are inter-related, for the sake of convenience,

these were heard together and are being disposed of by this common and consolidated order. ITA Nos.149 & 150/Hyd/2026: 2. The assessee has raised the following grounds of appeal in ITA No.149/Hyd/2026:

3.

The assessee has raised the following grounds of appeal in ITA No.150/Hyd/2026

4.

The brief facts of these two cases are that the assessee-society had filed separate applications seeking registration under section 12AB of the Income Tax Act, 1961

(“the Act”) and approval under section 80G of the Act in the prescribed forms. During the course of proceedings before the Ld. CIT(E), the assessee failed to comply with the notices issued from time to time. Consequently, the Ld. CIT(E) rejected both the applications filed by the assessee. 5. Aggrieved by the said orders, the assessee is in appeal before this Tribunal. Before us, the Learned Authorized Representative (“Ld. AR”) submitted that during the relevant period the office bearers and committee members of the society were extensively engaged in the construction of a temple and, therefore, could not effectively respond to the notices issued by the Ld. CIT(E). It was submitted that the non-compliance was neither deliberate nor intentional and was occasioned due to the circumstances prevailing at the relevant time. The Ld. AR further submitted that the assessee is genuinely engaged in charitable activities and, in support of such contention, has filed additional evidence consisting of copies of Income Tax Returns, audited financial statements, ledger accounts for A.Ys. 2022-23 to 2024-25 and donation receipts issued by the assessee-society. It was submitted that these documents clearly demonstrate that the assessee has been carrying on genuine charitable activities and that the temple construction activity was being undertaken during the relevant period. Accordingly, the Ld. AR prayed that one more opportunity may be granted to the assessee by restoring the matter to the file of the Ld. CIT(E) for fresh adjudication on merits.

6.

Per contra, the Learned Departmental Representative (“Ld. DR”) relied upon the orders passed by the Ld. CIT(E) and submitted that despite sufficient opportunities having been granted, the assessee failed to comply with the notices issued by the Ld. CIT(E) and, therefore, the rejection of the applications was justified. 7. We have carefully considered the rival contentions and perused the material available on record. We find that the applications filed by the assessee have been rejected primarily on account of non-compliance with the notices issued by the Ld. CIT(E). We further find that the assessee has placed on record additional evidence in the form of Income Tax Returns, audited financial statements, ledger accounts and donation receipts. We have gone through the said additional evidence and, on perusal of the same, we find that the documents prima facie support the claim of the assessee that it is engaged in charitable activities. The documents also lend support to the contention of the assessee that during the relevant period the construction of a temple was in progress and the office bearers of the society were actively engaged in such activities. In our considered view, the issue relating to grant of registration under section 12AB of the Act and approval under section 80G of the Act should ordinarily be decided on merits after examining the objects of the institution, genuineness of activities and other statutory requirements. Merely because the assessee could not effectively respond to the notices issued by the Ld. CIT(E), particularly when an explanation has been offered and supporting documents have been produced before us, the assessee should not be denied an opportunity to

establish its claim on merits. The principles of natural justice require that a reasonable opportunity be afforded before an adverse decision is taken. Therefore, considering the totality of the facts and circumstances of the case, and in the interest of substantial justice, we deem it appropriate to set aside the impugned orders passed by the Ld. CIT(E) and restore both the matters to his file for fresh adjudication. The assessee shall be at liberty to file all necessary documents, explanations and evidences in support of its claim for registration under section 12AB of the Act and approval under section 80G of the Act. The Ld. CIT(E) is directed to examine the applications afresh in accordance with law and decide the same on merits after affording adequate opportunity of being heard to the assessee. We also direct the assessee to extend full cooperation in the remand proceedings and not to seek any unnecessary adjournment. At the same time, the Ld. CIT(E) shall provide sufficient and effective opportunity to the assessee to present its case and place all relevant materials on record before passing a speaking order in accordance with law.

8.

In the result, the appeals of the assessee in ITA Nos. 149 and 150/Hyd/2026 are allowed for statistical purposes.

ITA NO. 151/HYD/2026 for A.Y. 2023-24: 9. The assessee has raised the following grounds of appeal:

10.

The brief facts of the case are that the assessee had filed its return of income for Assessment Year 2023-24 on 30.11.2023 declaring nil income. The case of the assessee was selected for scrutiny and accordingly notice under section 143(2) of the Act was issued by the Learned Assessing Officer (“Ld. AO”) on 27.06.2024. During the assessment proceedings, the Ld. AO observed that the application filed by the assessee seeking registration under section 12AB of the Act had been rejected by the Ld. CIT(E). Consequently, the Ld. AO denied the exemption claimed by the assessee under section 11 of the Act

and completed the assessment under section 144 read with section 144B of the Act vide order dated 22.02.2025, determining the total income of the assessee at Rs. 41,79,720/-. 11. Aggrieved by the assessment order, the assessee preferred an appeal before the Ld. CIT(A). However, the Ld. CIT(A) confirmed the action of the Ld. AO and dismissed the appeal of the assessee. Aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before this Tribunal. 12. We have carefully considered the rival submissions and examined the material available on record. We find that the exemption claimed by the assessee under section 11 of the Act has been denied by the Ld. AO solely on the ground that the assessee was not granted registration under section 12AB of the Act. We further find that in the connected appeal in ITA No. 149/Hyd/2026 relating to rejection of registration under section 12AB of the Act, we have already set aside the order of the Ld. CIT(E) and restored the matter to his file for fresh adjudication on merits after affording adequate opportunity of being heard to the assessee. Since the very foundation on which the assessment order has been framed, namely rejection of registration under section 12AB of the Act, has been restored for fresh consideration, in our considered opinion, the consequential assessment order denying exemption under section 11 of the Act also requires reconsideration. The final taxability of the income of the assessee would depend upon the outcome of the proceedings relating to registration under section 12AB of the Act. Accordingly, in the interest of justice, we set aside the orders of the lower authorities on this issue and restore

the matter to the file of the Ld. AO. The Ld. AO is directed to reconsider the claim of exemption under section 11 of the Act after the issue relating to registration under section 12AB of the Act is finally adjudicated by the Ld. CIT(E). Needless to mention, the assessee shall be afforded adequate opportunity of being heard and shall be at liberty to file all necessary documents and explanations in support of its claim. 13. In the result, the appeal of the assessee in ITA No.151/Hyd/2026 is allowed for statistical purposes. 14. To sum up, all the three appeals filed by the assessee are allowed for statistical purposes. Order pronounced in the Open Court on 10th June, 2026. Sd/- Sd/- (RAVISH SOOD) (MADHUSUDAN SAWDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER Hyderabad, dated 10th June, 2026. Vinodan/sps Copy to: S.No Addresses 1 Sri Jayaguru Navadurga Seva Samithi, 4-50-288/1/Seesala Basthi, Balanagar Township, SO Balanagar, R.R. 500037 2 CIT (E) Aayakar Bhavan, Basheerbagh, Hyderabad 500004 3 Pr. CIT – (Exemption) Hyderabad 4 DR, ITAT Hyderabad Benches 5 Guard File By Order VADREVU Digitally signed by VADREVU PRASADA PRASADA RAO Date: 2026.06.11 RAO 11:18:50 +05'30'

More judgments on Section 12AB

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

Recent GST High Court judgments

Search GST case law →