MARGDARSHAK SAMAJIK SHODH SANSTHAN,RAIPUR vs. COMMISSIONER OF INCOME TAX (EXEMPTION), BHOPAL, BHOPAL

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ITA 652/RPR/2026Status: DisposedITAT Raipur02 November 2026AY 2026-277 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal, respectfully following its earlier decision in the case of Sewaa Path Sanstha, set aside the order of the CIT(Exemption). The Tribunal found that the CIT(Exemption) ought to have provided a speaking order after deliberating upon all the documents and evidence furnished by the assessee, with regard to the objects and genuineness of the activities. The Tribunal held that the purpose of registration under Section 12A/12AB and recognition under Section 80G is to enhance socio-economic welfare and achieve the objectives of the Directive Principles of State Policy. The Tribunal remanded the matter back to the file of the CIT(Exemption) with specific directions to form satisfaction in terms of Section 12AB of the Act after examining all relevant details and evidence, complying with the principles of natural justice. The appeal pertaining to Section 80G exemption was also remanded with similar directions. The grounds of appeal were allowed for statistical purposes.

What were the facts?

The assessee, Margdarshak Samajik Shodh Sansthan, filed appeals before the ITAT, Raipur Bench, challenging orders passed by the Commissioner of Income Tax (Exemption), Bhopal. The assessment year in question is 2026-27. The appeals arise from the rejection of the assessee's application for registration under Section 12A(1)(ac)(iii) of the Income Tax Act, 1961, and the corresponding rejection of exemption under Section 80G(5)(iii) of the Act. The CIT(Exemption) rejected the applications primarily because the assessee failed to furnish relevant submissions and documents before the authority. The CIT(Exemption) noted that the assessee obtained provisional registration and approval after the commencement of activities, rendering them invalid.

What were the issues?

1. Whether the Commissioner of Income Tax (Exemption) was justified in rejecting the assessee's application for registration under Section 12A(1)(ac)(iii) of the Income Tax Act, 1961, and cancelling the provisional registration, considering the assessee's non-compliance with the authority's queries. Assessee's Contention: The assessee argues that the rejection order is arbitrary and illegal, and they are entitled to registration. (Implicit from the grounds of appeal and the Tribunal's eventual decision to remand). Revenue's Contention: The revenue, through the CIT(Exemption), rejected the application due to the assessee's failure to provide necessary submissions and documents, and the invalidity of provisional registration obtained after the commencement of activities. 2. Whether the Commissioner of Income Tax (Exemption) was justified in rejecting the assessee's application for exemption under Section 80G(5)(iii) of the Income Tax Act, 1961, corresponding to the rejection of Section 12A registration. Assessee's Contention: The assessee argues that the rejection order is arbitrary and illegal, and they are entitled to exemption. (Implicit from the grounds of appeal and the Tribunal's eventual decision to remand). Revenue's Contention: The revenue's rejection of 80G exemption is consequential to the rejection of 12A registration.

Which sections of the Income-tax Act were involved?

Section 12A(1)(ac)(iii),Section 80G(5)(iii),Section 12AB,Section 80G,Section 12A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, RAIPUR BENCH “DB”, RAIPUR

Before: SHRI PARTHA SARATHI CHAUDHURY & SHRI AVDHESH KUMAR MISHRA

For Appellant: Shri Nikhilesh Begani, Advocate
For Respondent: Shri Rituparna Namdeo, CIT-DR
Hearing: 29.10.2026Pronounced: 02.11.2026

आदेश / ORDER PER PARTHA SARATHI CHAUDHURY, JM:

The captioned appeals preferred by the assessee emanates from the respective order of the Ld.CIT(Exemption), Bhopal, dated 29.06.2026 for the assessment year 2026-27 as per the grounds of appeal on record.

2.

These appeals pertain to the rejection of registration u/s.12A(1)(ac)(iii) of the Income Tax Act, 1961 (for short ‘the Act’) and corresponding rejection of the exemption u/s.80G(5)(iii) of the Act. Reasons for rejection of application for registration u/s.12A of the Act as apparent in the findings of the Ld. CIT(Exemption) is that there was no response by the assessee for furnishing relevant submissions before the said authority. The relevant paras are extracted as follows: “5. In compliance the applicant neither submitted any reply till 23.06.2026 nor requested for adjournment. The applicant has obtained provisional registration from CPC on 28.02.2024 under Item (A) of Section 12A(1)(ac)(vi) of the Act. The date of commencement of activities mentioned in the earlier reply of the applicant is 15.06.2023 which is also supported with withdrawals from bank account of the applicant trust. The provisional registration in this case is Invalid. Similarly, the provisional approval taken in Form 10AC dated 29.02.2024 is also invalid as the same has been obtained after commencement of activities. 6. Considering the facts of the case, non compliance to the issue raised and reasons stated above, the applications filed in Form 10AB for grant of registration/approval u/s 12A(1)(ac)(iii)/ 80G(5)(iii) of the Act are hereby rejected and the provisional registration/provisional approval obtained from CPC stands cancelled.”

3 Margdarshak Samajik Shodh Sansthan Vs. CIT (Exemption), Bhopal ITA Nos. 652 and 653/RPR/2026

3.

We find that on the similar facts and circumstances and on identical issue this Bench of the Tribunal in the case of ITA Nos.74 & 75/RPR/2025 Sewaa Path Sanstha Vs. CIT(E), Bhopal, order dated 19.03.2025 has held and observed as follows:

“4. The assessee society is aggrieved due to cancellation of provisional registration u/s.12AB of the Act and resulting exemption u/s.80G of the Act as well as non-granting of regular/final registration on the same provisions of the Act. In this regard, the observation of the Ld. CIT(E) is culled out as under: A query letter dated 17/10/2024 has been issued to the assessee regarding to furnish all the information/documents on before 04/11/2024. In response to the above notices the assessee society submitted his reply along with documents. During the examination of the information /documents submitted by the assessee society it is observed that no specific expenditure is debited in the P&L account regarding charitable activities as per object of the society during the F.Y. 2021-22 /2022- 23/2023-24. The assessee society fails to substantiate his claim with sufficient documentary evidences. Also no documentary evidences were furnish by the assessee society regarding charitable activities carried out during the said periods. Merely one or two enclosed photographs of "Kaniyadan" & "Ladies Sangeet" cannot endorse the genuineness of the charitable activities of the assessee society. The "Kaniyadan" & "Ladies Sangeet" organized by the assessee society does not found to be social welfare activities. Thus, it is found that the assessee fails to furnish point wise complete information as per original a query letter date 17/10/2024. In view of above, due to non-compliance of requisite questionnaire dated 17/10/2024 by the assessee society, the application of the assessee in Form 10AB for grant of registration u/s 12AB & 80G(5) of I.T. Act is hereby rejected and provisional registration are also hereby cancelled.” 5. That as is evident from the order of the Ld. CIT(E), the requisite details and evidence as per Section 12AB of the Act was not filed by the assessee before the Ld. CIT(E), because of

4 Margdarshak Samajik Shodh Sansthan Vs. CIT (Exemption), Bhopal ITA Nos. 652 and 653/RPR/2026

which, he denied the regular registration to the assessee society. 6. The Ld. Counsel for the assessee society submitted that they had submitted all the documents and evidence as per questionnaire. However, neither any discrepancies brought out by the Ld. CIT(E) nor any show cause to clarify the discrepancies if any have been issued by the sanctioning authority. 7. We have heard the submissions of both the parties and perused the documents on record and facts and circumstances of the case. We find that as per the records and the order of the Ld. CIT(E), the relevant documents justifying the objects and genuineness of the activities which are required to be complied with as per Section 12AB of the Act, had been duly complied with by the assessee society. We are of the view that the purpose of the provisions for registration of trust u/s. 12A/12AB and granting of recognition u/s. 80G of the Act, derives their spirit from Directive Principles of State Policy enshrined in the Constitution of India. The Govt. of India makes every endeavour to provide welfare to one and all in the society at large, and in view thereof the registration for public charitable trusts/societies are given in order to ensure that through these charitable trusts benefits flows to entire society, so that the Directive Principles of State Policy are achieved. These provisions of registration u/s. 12A/12AB and granting of recognition u/s.80G of the Act enhance socio-economic welfare of the society. The provisions for registration u/s. 12AB of the Act and granting of recognition u/s 80G of the Act are in consonance with the objectives of the Government that once registration is given to public charitable trusts/societies, they would be able to perform charitable activities within the target area and to raise grants for using the same in those charitable activities, and in fact, they would also be able to extend claim of exemption u/s. 80G of the Act to the doners in respect of those grants received. In entirety, these provisions enable the public charitable trust to do the charitable activities and enhance the objectives of the Government of India corresponding with the Directive Principles of State Policy enshrined in the Constitution of India. 8. Considering the entire parameters, we are of the view that if one final opportunity is provided to the assessee society to submit all the evidence/documents before the Ld. CIT(E), there could be no jeopardize caused to either of the parties.

5 Margdarshak Samajik Shodh Sansthan Vs. CIT (Exemption), Bhopal ITA Nos. 652 and 653/RPR/2026

The Ld. CIT(E) ought to have come out with a speaking order after deliberating upon all the documents/evidence that would have been furnished by the assessee society before him to his satisfaction with regard to the objects and genuineness of the activities of the applicant/trust/society. In the present set of affairs, it is incumbent upon the Ld. CIT(E) as quasi- judicial authority to look into all the evidence furnished before coming to a conclusion with a speaking order. 9. In view thereof, the order of the Ld. CIT(E) is set-aside, and the matter is remanded to his file in terms of our aforesaid observations. As per the aforesaid terms the grounds of appeal raised by the assessee society stands allowed for statistical purposes. Needless to say, reasonable opportunity of being heard shall be provided to the assessee in the set aside proceedings. 10. In the result, appeal of the assessee society in ITA No.74/RPR/2025 is allowed for statistical purposes. ITA No.75/RPR/2025 Grounds of appeal: “1. Ld. Commissioner of Income Tax (Exemption) is not justified in rejecting application filed by appellant for registration u/s 80G(5) and in cancelling the provisional registration without appreciating the facts of the case properly. The rejection order passed by CIT(Exemption) is arbitrary, illegal and not justified. The appellant is entitled for registration. 2. The appellant reserves the right to amend, modify or add any of the ground/s of appeal.” 11. As the appeal filed by the assessee society as regards the cancellation of provisional registration u/s.12AB of the Act and rejection of grant of registration u/s 12AB has been remanded to the file of the Ld. CIT(E), therefore, appeal pertaining to corresponding exemption u/s.80G of the Act is also remanded to his file with similar directions as were recorded by us in ITA No.74/RPR/2025. 12. In the result, appeal of the assessee society in ITA No.75/RPR/2025 is allowed for statistical purposes. 13. In the combined result, both the appeals of the assessee society are allowed for statistical purposes.”

6 Margdarshak Samajik Shodh Sansthan Vs. CIT (Exemption), Bhopal ITA Nos. 652 and 653/RPR/2026

4.

That upon examination of facts and circumstances of the case and respectfully following the aforesaid judicial pronouncement, we set-aside the order of the Ld.CIT(Exemption) and remand the matter back to his file with specific directions that he shall form satisfaction in terms with Section 12AB of the Act on examining all the relevant details/evidences furnished by the assessee applicant complying with the principles of natural justice.

5.

Since appeal pertaining to granting registration u/s.12A of the Act is remanded to the file of the Ld. CIT(Exemption), therefore, corresponding appeal pertaining to exemption u/s. 80G of the Act is also remanded back to the said authority with similar directions.

6.

In the result, both the appeal of the assessee are allowed for statistical purposes. Order pronounced in the open court on 2nd November, 2026.

Sd/- Sd/- AVDHESH KUMAR MISHRA PARTHA SARATHI CHAUDHURY (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) रायपुर/ RAIPUR ; �दनांक / Dated : 2nd November, 2026. SB, Sr. PS आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to : 1. अपीलाथ� /The Appellant. 2. ��यथ� /The Respondent. 3. The CIT(Appeals)-1, Raipur (C.G.)

7 Margdarshak Samajik Shodh Sansthan Vs. CIT (Exemption), Bhopal ITA Nos. 652 and 653/RPR/2026

4.

�वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, रायपुर ब�च, रायपुर / DR, ITAT, Raipur Bench, Raipur. 5. गाड� फ़ाइल / Guard File. आदेशानुसार / BY ORDER, SAMIRAN BERA Digitally signed by SAMIRAN BERA // True Copy // Date: 2026.11.02 16:22:10 +05'30' Senior Private Secretary आयकर अपील�य अ�धकरण, रायपुर / ITAT, Raipur.

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