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Facts
The assessee, a society engaged in welfare activities, applied for regular registration under Section 12AB of the Income Tax Act. The CIT(E) rejected the application, citing non-compliance with notices and failure to furnish necessary information.
Held
The Tribunal held that the assessee made bona fide efforts to comply and appeared before the authority. The rejection appeared to be without adequate consideration of submitted documents, and the matter required fresh examination by the CIT(E).
Key Issues
Whether the rejection of the assessee's application for regular registration under Section 12AB by the CIT(E) was justified, considering the assessee's efforts to comply with the procedural requirements.
Sections Cited
12AB(1)(b)(ii), 12A, 12AB
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Income Tax Appellate Tribunal, ‘B’ BENCH, BANGALORE
Before: SHRI WASEEM AHMED & SHRI KESHAV DUBEY
PER WASEEM AHMED, ACCOUNTANT MEMBER:
The present appeal has been filed by the assessee against the order passed by the learned CIT(E) under section 12AB(1)(b)(ii) of the Act dated 31.10.2025.
The assessee in the memorandum of appeal has raised as many as eight grounds of appeal. However, since all the grounds are interconnected and relate to the rejection of the application filed in Form 10AB seeking registration under section 12AB of the Act, the same are not reproduced here for the sake of brevity and convenience.
The brief facts of the case are that the assessee, a society, is engaged in activities for the welfare of backward communities. The assessee had earlier filed an application seeking provisional registration under section 12A of the Act, which was duly granted by the department. Subsequently, the assessee filed an application in Form 10AB seeking regular registration under section 12AB of the Act.
During the course of proceedings before the learned CIT(E), a notice dated 15.07.2025 was issued fixing the matter for personal hearing. However, the said notice mentioned two different venues for hearing, namely Bengaluru and Mangaluru, which created confusion in the mind of the assessee. The assessee submitted that upon making a telephonic enquiry with the office of DCIT(E), Circle-1, Mangaluru, it was informed that the hearing had been rescheduled to 25.07.2025 and that the venue for the hearing would be Mangaluru.
4.1 The assessee further submitted that it had sought an adjournment of ten days through email and through filing on the ITBA portal. However, according to the assessee, due to technical deficiencies the request filed on the ITBA portal did not get reflected in the system.
4.2 Thereafter, another notice dated 28.07.2025 was issued fixing the hearing on 04.08.2025. The assessee submitted that it personally appeared before the office of DCIT(E), Mangaluru on 30.07.2025 and complied with all the requirements sought in the said notice. According to the assessee, since it had already appeared before the authority on 30.07.2025 and furnished the required details, appearing again on 04.08.2025 was considered unnecessary. The assessee further submitted . that additional information as required by the department was again furnished on 08.08.2025.
4.3 However, despite the assessee claiming to have complied with the requirements and extended full cooperation during the proceedings, the learned CIT(E) rejected the application filed under section 12AB of the Act.
Aggrieved by the said order, the assessee has preferred the present appeal before us.
The learned AR appearing on behalf of the assessee filed a paper book running from pages 1 to 177, containing the written submissions, orders of the lower authorities, statement of facts, grounds of appeal and copies of documents submitted before the office of ld. DCIT(E).
6.1 The Ld. AR submitted that the rejection of the assessee’s application under section 12AB is unjustified in the facts and circumstances of the case. He submitted that the assessee is a society working for the welfare of backward communities and had already been granted provisional registration under section 12A of the Act. Therefore, the present application filed in Form 10AB was only for grant of regular registration.
6.2 The Ld. AR further submitted that the assessee had duly complied with the notices issued by the department. He drew our attention to the paper book filed before the Tribunal running from page 1 to 177 containing the written submissions, order of the lower authorities and . copies of documents submitted before the office of ld. DCIT(E). The Ld. AR submitted that the assessee had appeared before the ld. DCIT(E), Mangaluru on 30.07.2025 and furnished the details sought by the department. It was further submitted that additional information as required by the department was also furnished on 08.08.2025.
6.3 The Ld. AR therefore contended that the assessee had placed all relevant documents before the department and had fully cooperated in the proceedings. However, the Ld. CIT(E) rejected the application without properly considering the materials placed on record. He therefore prayed that the impugned order be set aside and the matter be restored to the file of the Ld. CIT(E) for fresh adjudication after considering the documents filed by the assessee.
The learned DR, on the other hand, supported the order passed by the learned CIT(E). The learned DR submitted that sufficient opportunity was provided to the assessee during the proceedings before the ld. CIT(E). However, according to the learned DR, the assessee failed to properly comply with the notices issued and did not furnish the necessary information within the stipulated time. However, the ld. DR left the issue at the discretion of the Bench.
We have carefully considered the rival submissions of both the parties and perused the materials placed on record. The limited issue before us is whether the learned CIT(E) was justified in rejecting the application filed by the assessee in Form 10AB seeking regular registration under section 12AB of the Act.
8.1 From the facts placed before us, it is observed that the assessee is a society engaged in activities for the welfare of backward communities. The assessee had earlier been granted provisional registration under section 12A of the Act and thereafter applied for regular registration under section 12AB of the Act. It is also evident from the records placed at page Nos. 17 and 19 of the appeal set that the notice for personal hearing dated 15.07.2025 issued by the learned CIT(E) mentioned two different venues for hearing, namely Bengaluru and Mangaluru, which admittedly created confusion for the assessee. The assessee has submitted that upon making a telephonic enquiry with the office of DCIT(E), Mangaluru, it was informed that the hearing stood rescheduled to 25.07.2025 and that the venue would be Mangaluru.
8.2 The assessee has further demonstrated that it had sought an adjournment through email and through the ITBA portal. However, according to the assessee, due to technical issues the request filed on the ITBA portal did not get reflected in the system. Subsequently, another notice dated 28.07.2025 was issued fixing the hearing on 04.08.2025. The records also show that the assessee personally appeared before the office of DCIT(E), Mangaluru on 30.07.2025 and complied with the requirements sought in the notice. The assessee has also placed on record that further information as required by the department was again furnished on 08.08.2025.
8.3 In light of the above factual position, we find merit in the contention of the assessee that it had made bona fide efforts to comply with the notices issued by the department and had also appeared before the concerned authority. The rejection of the application appears to have . been made without adequately considering the submissions and documents furnished by the assessee. At the stage of granting registration under section 12AB of the Act, the authority is primarily required to examine the objects of the trust or society and the genuineness of its activities. Such examination necessarily requires consideration of the materials placed on record by the applicant.
8.4 In the present case, the sequence of events clearly indicates that the assessee had attempted to cooperate with the proceedings and had furnished the required details. Therefore, in the interest of justice and fair play, we are of the considered opinion that the matter requires fresh examination by the learned CIT(E). Accordingly, we set aside the impugned order passed by the learned CIT(E) under section 12AB(1)(b)(ii) of the Act and restore the matter to his file for adjudication afresh after duly considering the documents and submissions filed by the assessee and after providing a reasonable opportunity of being heard. The assessee is also directed to extend full cooperation and furnish all necessary information as may be required by the learned CIT(E). Hence, the ground of appeal of the assessee is allowed for statistical purposes.