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Facts
The assessee filed an application for approval of its trust under section 80G of the Income Tax Act. The CIT(Exemption) rejected the application after issuing multiple notices, stating that the assessee failed to provide required information and that expenses on religious activities exceeded the prescribed limit.
Held
The Tribunal held that while the assessee did not respond to the notices, it was in the interest of justice to grant one final opportunity. The issue was restored to the file of the CIT(Exemption) with a direction to allow the assessee to substantiate its case.
Key Issues
Whether the rejection of the 80G approval by the CIT(E) was justified due to non-compliance, and if a final opportunity should be granted to the assessee to present its case.
Sections Cited
80G, 80G(5), 80G(5B)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE
This appeal filed by the assessee is directed against the order dated 22.12.2025 of the Ld. CIT(Exemption), Pune refusing grant of approval u/s 80G of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).
Facts of the case, in brief, are that the assessee filed an application in Form No.10AB on 26.06.2025 for approval of the trust under clause (ii) of first proviso to sub-section (5) of section 80G of the Act. With a view to verify the genuineness of the activities of the assessee and fulfilment of conditions laid down in clause (i) to (v) of section 80G of the Act, a notice was issued through ITBA portal on 05.08.2025 requesting the assessee to upload certain information / clarification.
The assessee was also requested to submit the compliance by 26.08.2025. On verification of the details submitted by the assessee, the Ld. CIT(E) noted various discrepancies for which another notice was issued to the assessee asking it to explain on account of those discrepancies. The assessee was specifically informed that in the event of failure to comply by the due date, the application shall be liable to be rejected and the approval shall also be liable to be cancelled. However, the assessee did not make any submission. Therefore, the Ld. CIT(E) was not satisfied about the genuineness of the activities of the assessee and fulfilment of conditions laid down in clause (i) to (v) of section 80G of the Act for which he rejected the application for grant of approval u/s 80G by observing as under:
Aggrieved with such refusal for grant of approval u/s 80G by Ld. CIT(E), the assessee is in appeal before the Tribunal by raising the following grounds:
The learned CIT (Exemption), Pune has erred in rejecting application for approval /renewal filed by Assessee under Clause (ii) of first proviso to section 80G(5) by passing order dated 22 December 2025.
2. The learned CIT Exemption erred in law and on facts in rejecting the application of assessee under Clause (ii) of first proviso to sub-section (5) of Section 80G on the ground of expenditure incurred on religious activities, being more than 5% of the total income as provided in sub- section (5B) of section 80G and thereby rejecting the same without going into merits of the case 3. The learned CIT Exemption erred in law and on facts in cancelling the regular approval/registration granted on 03/10/2023 without following the due process of law and without affording opportunity of hearing to the appellant. 4. The learned CIT Exemption erred in law and on facts in cancelling the regular approval/registration granted on 03/10/2023 without considering and verifying assessee's submission and merely relying on financial statements 5. The Assessee prays to your honour to grant one more opportunity of being heard since the CIT failed to consider the submission filed by assessee. 6. The assessee craves leave to add, alter, amend, modify, delete all or any of the grounds of appeal.
The Ld. Counsel for the assessee at the outset submitted that the assessee has submitted all the details as sought by the Ld. CIT(E). However, due to non compliance to the second notice issued by the Ld. CIT(E), he rejected the application for approval u/s 80G of the Act and also cancelled the provisional approval granted earlier. He submitted that given an opportunity, the assessee is in a position to substantiate its case by filing the requisite details before the Ld. CIT(E) to his satisfaction. He accordingly submitted that in the interest of justice, the assessee should be given an opportunity to substantiate its case by filing the requisite details before the Ld. CIT(E).
The Ld. DR on the other hand heavily relied on the order of Ld. CIT(E) rejecting the application for grant of approval u/s 80G of the Act.
We have heard the rival arguments made by both the sides and perused the order of the Ld. CIT(E). It is an admitted fact that despite sufficient opportunities granted by the Ld. CIT(E), the assessee did not respond to the 2nd notice for which he rejected the application for grant of approval u/s 80G of the Act, the reasons of which have already been reproduced in the preceding paragraphs. It is the submission of the Ld. Counsel for the assessee that given an opportunity, the assessee is in a position to substantiate its case by filing the requisite details before the Ld. CIT(E) to his satisfaction. Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the Ld. CIT(Exemption) with a direction to grant one final opportunity to the assessee to substantiate its case by filing the requisite details to his satisfaction and decide the issue as per fact and law. The assessee is also hereby directed to submit the details as called for by the Ld. CIT(E) on the appointed date without seeking any adjournment under any pretext, failing which the Ld. CIT(Exemption) is at liberty to pass appropriate order as per law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 12th March, 2026.