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Facts
The assessee, a Section 8 company, was denied registration under sections 12A and 80G. The assessee had applied for provisional registration which was granted, but the final application was rejected by the CIT(Exemption) based on the AO's conclusion that the activities were commercial, not charitable. The assessee contended that no hearing was provided and submissions were not appreciated.
Held
The Tribunal held that the CIT(Exemption) order merely relied on the AO's observations without deciding the assessee's contentions based on the material. The Tribunal also noted that the assessee was not provided with a proper hearing.
Key Issues
Whether the denial of registration under sections 12A and 80G was justified without providing a proper hearing to the assessee. Whether the CIT(Exemption) properly considered the assessee's submissions and material on record.
Sections Cited
12A, 80G, 12A(1)(ac), 80G(5)(iv)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “B’’ BENCH: BANGALORE
Before: SHRI WASEEM AHMED & SHRI PRAKASH CHAND YADAV
PER PRAKASH CHAND YADAV, JUDICIAL MEMBER:
The present appeals are arising from the order of ld. CIT(Exemption) dated 30.12.2024 and pertain to the denial of registration u/s 12A & 80G of the Income Tax Act, 1961 (in short “The Act”).
The brief facts of the case are that the assessee is a section 8 company registered under the Companies Act, 2013 with an object to foster transparency, accountability and informed public discourse in respect of matters pertaining to inefficient and corrupt practices of the Govt. The assessee operates three key ventures. The assessee applied for provisional registration under section 12A(1)(ac) as well as 80G(5)(iv) and both these provisional registrations were granted to the assessee. Subsequently, the assessee filed applications for final & 184/Bang/2025 Paradarshak Media Foundation, Bangalore Page 2 of 3 registration in June 2024. The assessee received notices from the ITO, Exemptions Ward — 2, Bangalore seeking for various information and documents. The assessee duly furnished all the information which was called for by the ITO. The AO concluded that the assessee’s activities were not charitable in nature but in fact were commercial in nature. Based on the same, the Ld. CIT(E) passed an order rejecting both the 12A as well as the 80G applications of the assessee.
The ld. A.R. appearing on behalf of the assessee pointed out that neither any notice of any hearing was issued by the Office of ld. CIT(Exemption) nor the submissions made by the assessee before the AO have been appreciated, before rejecting the applications filed by the assessee. Hence the AR craved that matter may be restored to the file of ld. CIT (Exemption) for examining afresh on the basis of the documents and material on record.
The ld. D.R. relied upon the orders of authorities below, however, could not be able to refute the contention of the ld. A.R. that no notice of hearing was ever granted by the CIT(Exemption) Office before rejecting the application.
We have heard the rival submissions and perused the materials available on record. We observe that the assessee is a Section-8 company and a non-profit organization. The registration granted to these companies’ u/s 8 are subjected to the control of Reserve Bank of India (RBI) and various other agencies of the Government of India. Perusal of the order of ld. CIT (Exemption) would show that the ld. CIT(Exemption) has just gone by the observations of the AO and has not decided the contention of the assessee on the basis of material available on record. Therefore, in the interest of justice, we remit these matters to the file of ld. & 184/Bang/2025 Paradarshak Media Foundation, Bangalore Page 3 of 3 CIT(Exemption) with a direction that the ld. CIT (Exemption) would decide the application of the assessee after discussing the entire material filed with the office of ld. CIT (Exemption). The assessee is also at liberty to file any other document for supporting its application.
In the result, both the appeals filed by the assessee are allowed for statistical purposes. Order pronounced in the open court on 26th Mar, 2025