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Raksha Foundation, Bangalore vs CIT | s.12AB | ITAT Bangalore 2025 | BharatTax

RAKSHA FOUNDATION ,BANGALORE vs. COMMISSIONER OF INCOME TAX (EXEMPTION) , BANGALORE

ITA 1197/BANG/2025Status: DisposedITAT Bangalore07 November 2025AY 2025-26Bench: SHRI LAXMI PRASAD SAHU (Accountant Member), SHRI SOUNDARARAJAN K. (Judicial Member)1 pages

AI SummaryPartly Allowed

Facts

The assessee, Raksha Foundation, a trust established in 2019, applied for permanent registration under section 12AB of the Income Tax Act after obtaining provisional registration. The CIT(E) rejected the application based on the Joint Assessing Officer's (JAO) report, which did not recommend registration, without independently considering the provided documents and financial statements.

Held

The Tribunal held that the CIT(E) failed to pass a speaking order by merely relying on the JAO's report and not considering the assessee's submitted documents, trust deed, annual reports, and financial statements. The order of the CIT(E) was set aside, and the issue was restored to the CIT(E) for de novo consideration.

Key Issues

Whether the CIT(E) properly considered the application for registration under section 12AB by independently examining the provided documents, or merely relied on the JAO's report without passing a speaking order.

Sections Cited

12AB

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Income Tax Appellate Tribunal, ‘B’ BENCH : BANGALORE

Before: SHRI LAXMI PRASAD SAHU & SHRI SOUNDARARAJAN K.

For Appellant: Shri Amaresh Kanasavi, CA

For Respondent: Shri Kiran D, CIT-DR

ORDER PER SOUNDARARAJAN K., JUDICIAL MEMBER

This is an appeal filed by the assessee challenging the order of the Ld.CIT(E), Bangalore in which the Ld.CIT(E) had rejected the application filed for registration u/s. 12AB of the Act and raised the following grounds: “

1. The rejection order passed by the Ld. CIT (E) on 24.03.2025 under section 12AB of the Act, is against the facts of the case, to the extent the same are prejudicial to the appellant.

2. The Ld. CIT (E) erred in stating that, the trust has not brought out anything on records to establish the ultimate beneficiaries of the activities claimed to have been undertaken. Though the expenses incurred/ debited are routed through the banking channels, the nature of expenses and purposes for which utilized is not substantiated.

3. We would like submit that, the appellant has carried out the charitable activities and spent amount on such objects as envisaged in the trust deed and the appellant has submitted all the relevant details and documents in support of expenses incurred and attended personal hearing and explained it to the satisfaction of officer as well. In addition to the above, the ultimate beneficiary of the trust are poor and underprivileged people in the society and all the charitable activities carried out by the trust since its inception are for the benefit of poor and underprivileged people as mentioned in the trust deed. Hence, notwithstanding anything submitted above, The Ld. CIT(E) has erred in rejecting the application for registration filed under section 12AB of the Act merely based on the vague remarks made by the Ld. Jurisdictional Assessing Office 4. Under the circumstances where the grounds of appeal

with the substantiations are required to be filed within 60 days of the date of receipt of the order, the Appellant prays that it be permitted to add, amend, alter and improve upon the grounds of appeal. RELIEF SOUGHT

7.

From the order of the Ld.CIT(E), it is prima facie evident that the Ld.CIT(E) had not considered the issue in detail but only extracted the report of the JAO in which he has not recommended for registration and on that basis, rejected the application filed by the assessee. We are not satisfied with order of the Ld.CIT(E) since the Ld.CIT(E) had not mentioned anything about the various documents and records filed by the assessee before him / her and therefore the order could be set aside only for the reason that the same is not a speaking order. The Ld.CIT(E) being a quasi judicial authority ought to have independently applied his / her mind to the facts of the case and not merely guided by the reports given by the jurisdictional assessing officer. When the application was filed before the Ld.CIT(E), he might have sought for a remand report from the JAO but the said report should be confronted to the assessee since the report does not recommend for granting the registration. From the order, we are not able to ascertain whether the said report has been furnished to the assessee and the details were called for from them before rejecting the said application. Further, we have perused the trust deed and in the aims and objectives, several objects were given. We have also perused the annual reports given for the said A.Ys. which shows that the assessee is doing various activities towards achieving their objects. We have also considered the financial statements enclosed for the A.Ys. 2022-23 to 2024-25. From the said documents, we came to the conclusion that the assessee is doing various charitable activities towards achieving their objects. We, therefore set aside the order of the Ld.CIT(E) since the various activities conducted by the assessee and the financial statements were not considered properly which would otherwise establishes the fact that the assessee is carrying on the charitable activities which are all mentioned in their objects and restore the issue to the file of the Ld.CIT(E) for denovo consideration. We also permit the assessee to furnish the various documents filed before us in support of their claim that they are entitled for registration u/s. 12AB of the Act.