DESHABANDHU MICROFINANCE AND LIVELIHOOD INSTITUTION,SILCHAR vs. AO 2(3), EXEMP, GUWAHATI, GUWAHATI

ITA 180/GTY/2026Status: DisposedITAT Guwahati09 October 2026AY 2026-20277 pages
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What did the Tribunal hold?

The Tribunal noted that the assessee was initially granted registration under Section 12A(1)(ac)(1) for AY 2022-23 to 2026-27. However, during the renewal process, the assessee failed to respond to the questionnaire issued by the CIT(E) on 08.01.2026, specifically regarding the old registration granted under Section 12AA prior to 01.04.2021. While the assessee claimed to have obtained registration on 16.12.2014, it could not furnish the certificate during the proceedings before the CIT(E). The Tribunal observed that a pre-condition for registration under Section 12A(1)(ac)(1) is having prior registration before 01.04.2021. Considering the facts, the Tribunal decided to remit the issue back to the Ld. CIT(E) for fresh consideration and decision. The Ld. CIT(E) is directed to provide a reasonable opportunity to the assessee to be heard and to substantiate its claim with requisite documents. The assessee is also directed to present its case with supporting documents without seeking unnecessary adjournments for early disposal. The Tribunal explicitly stated that no further leniency would be granted to the assessee in case of failure. The issue of whether the initial registration was obtained on wrong facts and the subsequent declaration of being void ab initio were not definitively decided, as the matter was remanded.

What were the facts?

The assessee, Deshabandhu Microfinance And Livelihood Institution, filed an appeal against an order dated 25.03.2026 passed by the CIT(E), Kolkata. The assessee is a company incorporated under Section 25 of the Companies Act, 1956, and sought renewal of its registration under Section 12A(1)(ac)(ii) of the Income Tax Act, 1961. The CIT(E) rejected the application, stating that the assessee had obtained its initial registration under Section 12AB [Section 12A(1)(ac)(i)] based on wrong facts and without possessing prior registration under Section 12A/12AA before 01.04.2021. The assessee contended that it had indeed been granted registration in 2013 (later clarified as 16.12.2014 for AY 2015-16 onwards) but failed to produce the certificate during the proceedings before the CIT(E). The CIT(E) noted the assessee's failure to furnish the old registration certificate despite a notice issued on 08.01.2026.

What were the issues?

1. Whether the impugned order passed by the Ld. CIT(E) is bad in law and on facts, being erroneous, arbitrary, and unsustainable, and liable to be quashed, due to incorrect appreciation of facts and non-application of mind, particularly in describing the Appellant as a 'Charitable Society' instead of a 'Company incorporated under section 25 of the Companies Act, 1956'? (Assessee's Ground 2) 2. Whether the Ld. CIT(E) erred in holding that the Appellant did not possess registration under section 12A/12AA prior to 01.04.2021, when the Appellant claims to have been granted registration in 2013 (later specified as 16.12.2014) and that its non-furnishing was a procedural lapse? (Assessee's Grounds 3, 4, 5, 7, 9, 11) 3. Whether the Ld. CIT(E) acted beyond jurisdiction in declaring the registration granted under section 12A as 'void ab initio' without invoking or complying with the mandatory provisions of section 12A(4) relating to cancellation of registration? (Assessee's Ground 6) 4. Whether the rejection of registration on technical grounds is unjustified and contrary to law, given that no adverse finding was recorded regarding the genuineness of the Appellant's activities or objects? (Assessee's Ground 8) 5. Whether the impugned order was passed without granting an adequate and effective opportunity to the Appellant to furnish the earlier registration certificate and clarify its position, thereby violating the principles of natural justice? (Assessee's Ground 10) Assessee's Contentions: The assessee argued that the CIT(E)'s order was erroneous due to incorrect appreciation of facts, misclassification of the assessee's entity, and failure to verify internal records. It claimed prior registration under Section 12AA granted on 16.12.2014, and its non-furnishing was a procedural omission. The assessee also argued that the CIT(E) acted beyond jurisdiction by declaring registration void ab initio without following cancellation procedures and that rejection on technical grounds was unjustified. It further contended that principles of natural justice were violated by not providing an adequate opportunity. The assessee relied on the fact that it had filed Form 10A on 27.03.2022 and that its prior registration was available on the Department's portal. Revenue's Contentions: The Ld. DR relied on the order of the Ld. CIT(E) and questioned why the assessee did not file the registration certificate if it possessed one.

Which sections of the Income-tax Act were involved?

Section 12A,Section 12A(1)(ac),Section 12A(1)(ac)(i),Section 12A(1)(ac)(ii),Section 12A(4),Section 12AA,Section 12AB,Section 25

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “DB” BENCH, GAUHATI

Before: Shri Laxmi Prasad Sahu & Shri Yogesh Kumar US

Per Laxmi Prasad Sahu, Accountant Member:

This is an appeal filed by the assessee against the order passed by the Ld. CIT(E) Kolkata dated 25.03.2026 on the following grounds of appeal:-

1.

That the impugned order passed by the Learned Commissioner of Income Tax (Exemption) Kolkata is bad in law and on facts, being erroneous, arbitrary and unsustainable, and is liable to quashed.

2.

That the impugned order is vitiated due to incorrect appreciation of basic facts, in as much as the Learned CIT(E) has errone

The order continues below.

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