SMOKY CHARITABLE TRUST,PAREL vs. CIT (EXEMPTIONS), MUMBAI, CUMBALLA HILL

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH MUMBAI BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT & SHRI MAKARAND VASANT MAHADEOKAR, ACCOUNTANT MEMBER ITA No. 3869/Mum/2026 (Assessment Year: 2026-27) Smoky Charitable Commissioner Of Trust Income Tax Vs. (Exemptions) 35 Hospital Avenue, Dr. E Borges Marg, Parel,, Room no. 601, 6th Mumbai-400012, Floor, MTNL Building, Maharashtra Pedder Road, Cumballa Hill, Dr. Gopalrao Deshmukh Marg, Mumbai - 400026 PAN/GIR No. AABTS5701R (Applicant) (Respondent) Assessee by Ms. Mahima Pandey, Ld. AR Revenue by Shri Yogesh Kamat, Ld. DR Date of Hearing 25.06.2026 Date of Pronouncement 02.07.2026 आदेश / ORDER PER MAKARAND VASANT MAHADEOKAR, AM: This appeal by the assessee is directed against the order dated 22.03.2026 passed by the learned Commissioner of Income Tax (Exemptions), Mumbai, hereinafter referred to as “the learned CIT(E)”, in Form No. 10AD, in terms of section 12AB(1)(b) of the

2 ITA No. 3869/Mum/2026 Smoky Charitable Trust Income-tax Act, 1961, hereinafter referred to as “the Act”, whereby the application filed by the assessee in Form No. 10AB seeking renewal of registration under section 12AB of the Act was rejected.

3 ITA No. 3869/Mum/2026 Smoky Charitable Trust The Learned CIT(E) failed to appreciate that at the stage of grant/renewal of registration under section 12AB, only prima facie satisfaction regarding the objects of the Trust and genuineness of its activities is required, and not a detailed or exhaustive examination. 7. No Adverse Finding on Genuineness The Learned CIT(E) has failed to record any finding that:  the activities of the Trust are not genuine, or  the activities are not being carried out in accordance with its objects, and therefore, rejection of registration is unjustified. 8. Ignoring Past Registration The Learned CIT(E) failed to appreciate that the Appellant was already granted registration under section 12AB earlier and there being no change in objects or activities, denial of renewal is unjustified. 9. Arbitrary Exercise of Power The rejection is based merely on alleged non-furnishing of documents without considering the submissions made, and hence constitutes arbitrary exercise of statutory powers. Prayer The Appellant prays that the order passed by the Learned CIT(E) be set aside and registration under section 12AB be granted, or alternatively, the matter be restored for fresh consideration. Leave to Amend: The Appellant craves leave to add, alter or amend any of the above grounds at the time of hearing. 3. The following further prayer also appears in the memorandum of appeal:

The Appellant prays that the order passed by the Learned CIT(E) rejecting the application under section 12AB be set aside and

4 ITA No. 3869/Mum/2026 Smoky Charitable Trust registration be granted, or alternatively the matter be restored to the file of the CIT(E) for fresh adjudication. Facts of the case 4. The assessee being a charitable trust filed an application in Form No. 10AB on 26.09.2025 under section 12A(1)(ac)(ii) of the Act, seeking renewal of its registration under section 12AB of the Act. The nature of the activities of the assessee has been stated in the impugned order as “Charitable”. 5. In the impugned order, the learned CIT(E) referred to Rule 17A of the Income-tax Rules, 1962, which governs an application for registration of a charitable or religious trust or institution. The learned CIT(E) reproduced the requirements contained in Rule 17A(2), according to which an application in Form No. 10AB is required to be accompanied by the specified documents. Such documents include, inter alia, the instrument creating or establishing the trust, evidence of registration with the competent statutory authority, the existing order granting registration under section 12A, section 12AA or section 12AB, annual accounts for the immediately preceding years and a note on the activities of the trust. 6. The learned CIT(E) observed that, upon verification of the application filed by the assessee, it was found that the application was incomplete and that all the documents required to accompany the application had not been furnished. The learned CIT(E), therefore, issued a notice dated 20.01.2026, calling upon

5 ITA No. 3869/Mum/2026 Smoky Charitable Trust the assessee to furnish the complete set of documents referred to in Rule 17A(2). 7. The impugned order records that the assessee filed its submission vide letter dated 25.01.2026. The learned CIT(E), however, observed that after perusal of the documents and submissions, the assessee had not furnished details and documentary evidence regarding the activities undertaken by it. The learned CIT(E) further stated that such documentary evidence had been called for vide notice dated 09.01.2026. According to the learned CIT(E), in the absence of documentary evidence regarding the activities undertaken by the assessee, the genuineness of such activities could not be established. 8. The learned CIT(E) observed that registration under section 12AB was to be granted in terms of section 12AB(1)(b) of the Act upon satisfaction regarding the objects of the trust, genuineness of its activities and its compliance with other laws material for achieving its objects. The learned CIT(E), therefore, rejected the application filed by the assessee. 9. Aggrieved by the aforesaid order, the assessee is in appeal before us. 10. The learned Authorised Representative (AR) of the assessee submitted that the finding recorded by the learned CIT(E), that the assessee had not furnished documentary evidence regarding its activities, was factually incorrect and contrary to the material furnished in the course of the registration proceedings.

6 ITA No. 3869/Mum/2026 Smoky Charitable Trust 11. The learned AR placed reliance upon an affidavit dated 24.03.2026 sworn by Ms. Kim Verma Modi, Managing Trustee of the assessee trust.Referring to the contents of the affidavit, the learned AR submitted that the assessee had duly complied with the notices issued by the learned CIT(E). It was submitted that the assessee had furnished replies, explanations and supporting documents in response to the noticedated 20.01.2026.It was further submitted that the assessee had filed its reply on 27.01.2026, within the prescribed time, along with complete details and supporting documents. According to the affidavit, the documents furnished by the assessee included the following: i. self-certified copies of the audited financial statements; ii. a detailed note regarding the nature and activities of the trust; iii. year-wise details of expenditure incurred towards the objects of the trust; and iv. an explanation regarding the manner in which the charitable activities were being carried out. 12. The learned AR submitted that the assessee was carrying on charitable activities by granting direct financial assistance to needy individuals and by making donations to other public charitable institutions carrying on charitable activities. The stated areas of the assessee’s activities included medical relief, educational assistance, relief to the poor and advancement of objects of general public utility.

7 ITA No. 3869/Mum/2026 Smoky Charitable Trust 13. It was contended that the assessee had also furnished year- wise details of expenditure demonstrating that charitable activities had been carried out consistently over several years. Such activities included financial assistance for education and medical relief and donations to charitable institutions. 14. The learned AR submitted that, despite the aforesaid material having been furnished, the learned CIT(E) rejected the application by merely observing that documentary evidence regarding the activities had not been submitted. It was contended that the impugned order did not identify the particular document which had not been furnished or the specific deficiency which remained to be complied with. 15. It was further submitted that the learned CIT(E) did not record any finding that the activities of the assessee were not genuine or that such activities were not being carried out in accordance with the objects of the trust. The learned AR, therefore, submitted that the impugned order was non-speaking, had been passed without proper appreciation of the record and without affording an effective and meaningful opportunity of hearing. 16. The learned AR accordingly prayed that the impugned order be set aside and registration under section 12AB be granted to the assessee. In the alternative, it was prayed that the matter be restored to the file of the learned CIT(E) for fresh adjudication after considering the documents furnished by the assessee.

8 ITA No. 3869/Mum/2026 Smoky Charitable Trust 17. The learned Departmental Representative relied upon the findings recorded in the impugned order passed by the learned CIT(E). He, however, fairly submitted that he had no objection if the impugned order was set aside and the matter was restored to the file of the learned CIT(E) for fresh adjudication, after granting due opportunity of hearing to the assessee. 18. We have considered the rival submissions and perused the material available on record. The learned Departmental Representative, while relying upon the impugned order, has not opposed the alternative prayer of the assessee for restoration of the matter to the file of the learned CIT(E). The limited controversy before us is whether the learned CIT(E) was justified in rejecting the application for renewal of registration on the ground that the assessee had not furnished the requisite details and documentary evidence regarding the activities undertaken towards its stated objects. 19. The learned CIT(E) has reproduced the entire list of documents prescribed under Rule 17A(2). However, after reproducing the statutory requirements, the impugned order does not identify which particular document required under Rule 17A(2) had not been furnished by the assessee. The order also does not specify whether the alleged deficiency related to the trust deed, statutory registration, earlier registration order, annual accounts, note on activities or any other particular document.

9 ITA No. 3869/Mum/2026 Smoky Charitable Trust 20. The impugned order records that a notice dated 20.01.2026 was issued to the assessee. It thereafter records that the assessee filed its submission vide letter dated 25.01.2026. In the same paragraph, the learned CIT(E) has referred to the details and documentary evidence having been called for vide notice dated 09.01.2026. Thus, the order itself refers to two different dates of notice, namely, 20.01.2026 and 09.01.2026, without clarifying whether two separate notices had been issued or whether the reference to the notice dated 09.01.2026 was inadvertent. 21. There is also a difference regarding the date on which the assessee’s reply was filed. The impugned order refers to a submission dated 25.01.2026, whereas the affidavit sworn by the Managing Trustee states that the reply was filed on 27.01.2026. These factual aspects require verification from the contemporaneous electronic record, the acknowledgment of filing and the documents actually uploaded by the assessee before the learned CIT(E). 22. The learned CIT(E) has stated that the documents and submissions were carefully perused. However, the impugned order does not discuss the contents of the reply filed by the assessee, the audited financial statements, the note on activities or the year-wise expenditure details which, according to the affidavit, had been furnished. There is no finding as to why such material, if furnished, was insufficient to establish the nature and genuineness of the activities.

10 ITA No. 3869/Mum/2026 Smoky Charitable Trust 23. We are conscious that the satisfaction contemplated under section 12AB is required to be arrived at by the prescribed authority on the basis of the material furnished by the applicant. The learned CIT(E) is entitled to call for such documents and information as may be necessary to satisfy himself about the objects of the trust, genuineness of its activities and compliance with other applicable laws. At the same time, where registration is proposed to be refused for failure to furnish information or documentary evidence, the specific deficiency must be brought to the notice of the applicant and the final order must disclose due consideration of the reply and material furnished. 24. In the present case, the order does not identify the precise deficiency. It merely records a general conclusion that documentary evidence relating to the activities had not been furnished. The order does not refer to any particular requirement contained in Rule 17A(2) which remained unfulfilled. It also does not deal with the material which the assessee claims to have filed. 25. At the same time, the documents referred to in the affidavit, their electronic acknowledgments and the complete reply filed before the learned CIT(E) are required to be verified by the registration authority. In the absence of a factual verification of the complete record, it would not be appropriate for the Tribunal to direct the grant of registration at this stage. 26. In these circumstances, we are of the considered view that the matter requires fresh examination by the learned CIT(E). We accordingly set aside the impugned order dated 22.03.2026 and

11 ITA No. 3869/Mum/2026 Smoky Charitable Trust restore the application filed by the assessee in Form No. 10AB to the file of the learned CIT(E) for de novo adjudication. 27. The assessee is directed to furnish before the learned CIT(E) a complete set of the documents relied upon by it, including the reply stated to have been filed in January 2026, the electronic acknowledgment thereof, audited financial statements, note on activities, year-wise expenditure details and supporting documentary evidence regarding the charitable activities carried out by it. 28. The learned CIT(E) shall verify the documents and material already available on the electronic record as well as such further material as may be furnished by the assessee. In case any document or information is found to be deficient, the learned CIT(E) shall communicate the specific deficiency to the assessee and grant a reasonable and effective opportunity to comply with the same. 29. Thereafter, the learned CIT(E) shall pass a fresh, reasoned and speaking order in accordance with law, after affording an adequate opportunity of being heard to the assessee. We clarify that we have not expressed any opinion on the eligibility of the assessee for registration under section 12AB, and all contentions of both sides are left open. 30. Accordingly, the grounds raised by the assessee are allowed for statistical purposes.

12 ITA No. 3869/Mum/2026 Smoky Charitable Trust 31. In the result, the appeal of the assessee is allowed for statistical purposes.

Order pronounced in the open court on 02.07.2026.

Sd/- Sd/- (SAKTIJIT DEY) (MAKARAND VASANT MAHADEOKAR) VICE PRESIDENT ACCOUNTANT MEMBER Mumbai, Dated 02/07/2026 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