SHRI SAMAST SAGAR SAMAJ MUMBAI,MUMBAI vs. CIT (EXEMPTIONS), MUMBAI, MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH MUMBAI BEFORE SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER & SHRI MAKARAND VASANT MAHADEOKAR, ACCOUNTANT MEMBER ITA No. 4670/Mum/2026 (Assessment Year: 2027-28) Shri Samast Sagar CIT (Exemptions) Samaj Mumbai Room No. 601, 6th Gala No. 2A, 1st Floor, Vs. Floor, Cumballa Hill Vakeel AH Khan, MTNL TE Building, CHSL, Dharkhadi Pedder, Road, Dr. Dahisar East, Mumbai Gopalrao Deshmukh – 400 068 Marg, Mumbai – 400 026 PAN/GIR No. AAETS5100R (Applicant) (Respondent) Assessee by Shri Manish Kumar Sharma, Ld. AR Revenue by Ms. Shabana Parveen, Ld. DR Date of Hearing 17.06.2026 Date of Pronouncement 19.06.2026 आदेश / ORDER PER MAKARAND VASANT MAHADEOKAR, AM: This appeal is directed against the order passed by the learned Commissioner of Income Tax (Exemptions), Mumbai [hereinafter referred to as "CIT(E)"] in Form No. 10AD dated 25.02.2026, whereby the application filed by the assessee for

2 ITA No. 4670/Mum/2026 Shri Samast Sagar Samaj Mumbai renewal of registration under section 12AB of the Income-tax Act, 1961 [hereinafter referred to as "the Act"]came to be rejected under the provisions of section 12AB(1)(b) of the Act.

Ground No. 1 — Violation of Principles of Natural Justice / Inadequate Opportunity "That the impugned order dated 25.02.2026 passed by the Respondent is contrary to law and bad in law, inasmuch as it has been passed in gross violation of the principles of audi alteram partem — the foundational principle of natural justice. The Respondent afforded to the Appellant only a single notice dated 25.01.2026, scheduling the hearing for 02.02.2026, which allowed a notice period of a mere 8 (eight) calendar days. Such a compressed and wholly inadequate time-frame does not constitute a "reasonable opportunity of being heard" within the mandate of Section 12AB(3) of the Act. No reminder notice was issued. The rejection order is accordingly void ab initio. The Appellant prays that the impugned order be set aside on this ground alone." Ground No. 2 — Failure to Consider Documents on Record "That the Respondent has failed to apply its mind to and consider the substantial documentation placed on record by the Appellant at the time of filing Form 10AB on 27.09.2025. The said documents, comprising the (a) Trust Deed/MOA, (b) Registration certificates, (c) Existing Section 12AB and 80G orders, (d) Three years' audited financials, and (e) Activity note, and comprehensively addressed the requirements of Rule 17A(2) of the Income-tax Rules, 1962. The impugned order makes no reference whatsoever to the documents on record and proceeds as though no documents were furnished. The rejection is therefore perverse, arbitrary and against the weight of evidence on record." Ground No. 3 — Non-Recording of Statutory Findings u/s 12AB(1)(b) "That the impugned rejection order does not contain any finding, express or implied, with respect to: (i) the objects of the Appellant Trust; (ii) the genuineness of the activities of the Appellant; and (iii) compliance with any other law for the time being in force. The recording of

3 ITA No. 4670/Mum/2026 Shri Samast Sagar Samaj Mumbai satisfaction/dissatisfaction on these parameters is a statutory prerequisite for rejection under Section 12AB(1)(b) and Section 12AB(3) of the Act. The rejection order, being bereft of any such finding, is non- speaking, unreasoned, and without jurisdiction, and is therefore liable to be quashed." Ground No. 4 — Order Contrary to Binding Judicial Precedent of the Hon'ble Jurisdictional High Court "That the impugned order dated 25.02.2026 is unsustainable in law and is directly contrary to the binding judicial precedent laid down by the Hon'ble High Court of Judicature at Bombay in Writ Petition (L) No. 7587 of 2026, decided on 09.03.2026. The facts and circumstances of the petitioners in the said writ petition are identical in all material respects to those of the Appellant herein, inasmuch as their applications for renewal of registration under Section 12AB were similarly rejected by the Income Tax Department on the self-same ground of non- compliance to notice, without adequate opportunity of hearing and without consideration of documents already on record. The Hon'ble Jurisdictional High Court has, in the said order, ruled in favour of the petitioners and against the Income Tax Department. This Hon'ble Tribunal, being subordinate to the Hon'ble Bombay High Court, is bound by the said pronouncement. The continued sustenance of the impugned order, which is on all fours with the orders impugned in the said writ petition and which was passed prior to the said HC order, is untenable in law and the same is liable to be set aside in conformity with the said binding precedent. The Appellant reserves the right to cite and rely upon the said order of the Hon'ble Bombay High Court as a judicial precedent at the time of hearing." Ground No. 5 — Bona Fide Nature of Appellant and Prejudice Caused "That the Appellant is a bona fide charitable organization established in 2004, with a history of sustained charitable activities spanning over two decades. The Appellant has maintained registrations under Sections 12A/12AA/12AB and 80G of the Act without interruption since 2004/2005 and 2009 respectively. The rejection of the renewal application has rendered the Appellant's registration under Section

4 ITA No. 4670/Mum/2026 Shri Samast Sagar Samaj Mumbai 12AB inoperative, thereby depriving the Appellant of the benefit of exemption under Sections 11 and 12 of the Act and causing grave and irreparable prejudice to the Trust and the beneficiaries of its charitable activities. The consequences are grossly disproportionate to the alleged non-compliance." Ground No. 6 — Disproportionate and Harsh Action "That the Respondent's action of outright rejection of the renewal application, without granting even a single further opportunity, is arbitrary, harsh, unreasonable and disproportionate, particularly having regard to the fact that the Appellant had already placed substantial material on record and that the deficiencies, if any, were curable. The CIT(Exemptions) ought to have called for the deficient documents through a reminder notice before proceeding to pass an order of rejection. The rejection on the first and only default is not warranted by the scheme of the Act or the Rules." Ground No. 7 "Your appellant craves leave to add to, alter, amend or delete any of the foregoing grounds of appeal." 3. Briefly stated, the facts are that the assessee is a charitable institution. It filed an application in Form No.10AB on 27.09.2025 under section 12A(1)(ac)(ii) of the Act seeking renewal of registration under section 12AB. During the course of proceedings, the learned CIT(E) observed that the application was not complete and that all documents required to accompany the application had not been furnished. Consequently, a notice dated 25.01.2026 was issued calling upon the assessee to furnish the requisite documents and details as required under Rule 17A(2) of the Income-tax Rules, 1962.

5 ITA No. 4670/Mum/2026 Shri Samast Sagar Samaj Mumbai the learned CIT(E), registration under section 12AB is required to be granted only after satisfaction regarding the objects of the trust or institution, the genuineness of its activities and compliance with other applicable laws. In the absence of the requisite compliance and material, the learned CIT(E) held that he was unable to arrive at a satisfactory conclusion on the aforesaid statutory parameters and, therefore, rejected the application for renewal of registration under section 12AB. The application was accordingly rejected vide order dated 25.02.2026. 5. During the course of hearing, the learned Authorised Representative (AR) submitted that the assessee is a charitable trust registered under the Societies Registration Act, 1860 and the Maharashtra Public Trusts Act, 1950 and has been carrying on charitable activities since its inception. It was submitted that the assessee was already holding a valid registration under section 12AB granted vide order dated 01.12.2022 and was also enjoying registration under section 80G of the Act. 6. The learned AR submitted that the assessee had filed Form No.10AB within the prescribed time and had uploaded along with the application all material documents including the Memorandum of Association/Trust Deed, registration certificates, copies of registrations under sections 12A/12AA/12AB and 80G, audited financial statements for three preceding years and a note explaining the charitable activities undertaken by the assessee. According to the learned AR, these documents substantially

6 ITA No. 4670/Mum/2026 Shri Samast Sagar Samaj Mumbai fulfilled the requirements prescribed under Rule 17A(2) of the Rules. 7. It was further submitted that the only notice issued by the learned CIT(E) was dated 25.01.2026 fixing the hearing on 02.02.2026 and that, due to circumstances beyond the control of the assessee, the notice could not be brought to the attention of the trustees and authorised representatives in time. Consequently, the hearing could not be attended and the additional details sought could not be furnished within the stipulated period. The learned Authorised Representative contended that only eight days' time had been granted and no reminder notice or further opportunity was provided before rejecting the application. 8. The learned AR further submitted that the impugned order does not record any finding regarding the objects of the trust, the genuineness of its activities or compliance with other applicable laws and merely proceeds on the basis of alleged non-compliance. 9. The learned Departmental Representative fairly submitted that he has no objection if the matter is restored to the file of the learned CIT(E) for fresh adjudication after granting adequate opportunity of being heard to the assessee. 10. We have heard the rival submissions and perused the material available on record. The impugned order reveals that the application of the assessee has been rejected primarily on the ground that the assessee did not comply with the notice issued

7 ITA No. 4670/Mum/2026 Shri Samast Sagar Samaj Mumbai by the learned CIT(E). At the same time, it is also evident that the learned CIT(E) has not undertaken any examination of the objects of the trust, the genuineness of its activities or the materials already available on record for the purpose of arriving at the satisfaction contemplated under section 12AB(1)(b) of the Act. 11. We further note that the assessee claims to have filed various foundational documents along with Form No.10AB and has also expressed its readiness to furnish all further details that may be required by the learned CIT(E). The learned Departmental Representative has also fairly stated that he has no objection to restoration of the matter to the file of the learned CIT(E) for fresh consideration. 12. Considering the entirety of the facts and circumstances of the case, and in the interest of substantial justice, we deem it appropriate to set aside the impugned order dated 25.02.2026 passed by the learned CIT(E) and restore the matter to his file for de novo adjudication. The learned CIT(E) shall afford reasonable and effective opportunity of being heard to the assessee, permit the assessee to furnish such documents and explanations as may be considered necessary, examine the application in accordance with law and thereafter pass a speaking order in terms of the provisions of section 12AB of the Act. 13. We clarify that we have not expressed any opinion on the merits of the assessee's claim for renewal of registration and all

8 ITA No. 4670/Mum/2026 Shri Samast Sagar Samaj Mumbai issues are left open for adjudication by the learned CIT(E) in accordance with law.

Order pronounced in the open court on 19.06.2026.

Sd/- Sd/- (CHALLA NAGENDRA PRASAD) (MAKARAND VASANT MAHADEOKAR) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated 19/06/2026 Dhananjay, Sr.PS आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : 1. अपीलाथी / The Appellant 2. प्रत्यथी / The Respondent. 3. संबंधधत आयकर आयुक्त / The CIT(A) 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