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Facts
The assessee's applications for registration under Section 12A and Section 80G of the Income Tax Act were rejected by the CIT(E). The rejection under Section 12A was due to unsatisfactory explanation for cash donations, and the Section 80G rejection was consequential. The assessee argued that substantial documents were filed but not considered by the CIT(E).
Held
The tribunal found the CIT(E)'s order cryptic and non-speaking, noting that the submitted details and evidence were not adequately considered. Therefore, the tribunal set aside both impugned orders and remanded the cases back to the CIT(E) for fresh adjudication, directing to provide the assessee a fresh opportunity to submit necessary details and pass a speaking order.
Key Issues
Whether the CIT(E) erred in rejecting applications for registration under Section 12A and 80G without a speaking order and without adequately considering the evidence for cash donations.
Sections Cited
12A, 80G, 12AB
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Income Tax Appellate Tribunal, “D” BENCH”, KOLKATA
Sankarpur Jamiah Salafiah Bahrul-Uloom, At and Post Shankarpur, Sankarpur, B.O., Murshidabad, West Bengal - 742159 [PAN: ACHAS2026A] ……..…...…………….... Appellant vs. Commissioner of Income Tax (Exemptions,) Kolkata, 10B, Middleton Row (6th Floor), Kolkata - 700071 ................................. Respondent Appearances by: Assessee represented by : P.K. Roy, AR Department represented by : Sanat Kumar Raha, CIT-DR Date of concluding the hearing : 24.07.2025 Date of pronouncing the order : 24.07.2025 O R D E R PER SANJAY AWASTHI, ACCOUNTANT MEMBER 1. These are a batch of two appeals pertaining to the same assessee. Since the issues are inter-connected hence both of these appeals are being disposed of through a single order. Both these appeals arise from orders passed by Ld. Commissioner of Income Tax (Exemptions) [hereafter the Ld. CIT(E)”], Kolkata. While pertains to an application for registration under Section 12A(1)(ac)(vi)(B) of the Income Tax Act, 1961 (hereafter “the Act”); pertains to an order on application for registration under Section 80G(5)(iv)(B) of the Act.
1.1 It is seen that in the assessee filed an application in Form 10AB of the Act dated 07.08.2024 for which certain information and details were called from the assessee. It is recorded on & 1069/Kol/2025 Sankarpur Jamiah Salafiah Bahrul-Uloom page 2 of the impugned order that the assessee has received cash donation for which no satisfactory explanation could be submitted. Hence, application for registration under Section 12A(1)(ac)(vi)(B) of the Act was rejected. In it has been held by the Ld. CIT(E) that the application for registration under Section 80G(5)(iv)(B) of the Act cannot be sustained since the application under Section 12A of the Act was rejected.
1.2 Aggrieved with this action, the assessee is in appeal with the following grounds:
“1) That the impugned Order of the Ld. Commissioner of Income Tax (Exemptions), Kolkata has erred in law in not having properly appreciate the replies of Appellant and, on the other hand, rejected the application Form No. 10AB for approval under Item (B) of sub-clause (vi) of clause (ac) of sub-section (1) of Section 12A of the Income Tax Act, 1961. 2) That the Rejection of Registration u/s 12AB: The Ld. Commissioner of Income Tax (Exemptions), Kolkata erred in law and fact having not to grant the benefit of fresh Registration u/s 12AB of the Income Tax Act, 1961 of the Institution, merely quoting in the order that "The assessee has failed to established the genuineness of the activities of the trust and therefore is not eligible for registration u/s. 12A(1)(ac)(iii) of the Act. Hence, the application filed by the assessee treated as non-maintainable and assessee's application u/s. 124(1)(ac)(vi) (B) is hereby rejected" Although, the Appellant complied necessary Rule 17A of Income Tax Rules, 1962 along with requisition documents for application for registration under Item (B) of sub-clause (vi) of clause (ac) of sub-section (1) of Section 12A of the income Tax Act, 1961. Therefore, your Appellant prays before the Hon'ble Members of the Appellate Tribunal for direction to grant the fresh Registration u/s 12AB of the Income Tax Act, 1961 against decision made by the Ld of Commissioner of Income Tax (Exemptions), Kolkata The Appellant craves the leave of the Hon'ble Members of income Tax Appellate Tribunal to urge further ground(s) at the time of hearing and to produce the documents in support of its argument, if required.”
“1) That the impugned Order of the Ld. Commissioner of Income Tax (Exemptions), Kolkata has erred in law in not having properly appreciate the replies of Appellant and, on the other hand, rejected the application Form No. 10AB for approval under Item (B) of sub-clause (vi) of clause (ac) of sub-section (1) of Section 12A of the Income Tax Act, 1961.
2) That the Rejection of Registration u/s 12AB: The L.d. Commissioner of Income Tax (Exemptions), Kolkata erred in law and fact having not to grant the benefit of fresh Registration u/s 12AB of the Income Tax Act, 1961 of the Institution, merely quoting in the order that "The assessee has failed to established the genuineness of the activities of the trust and therefore is not eligible for registration u/s. 12A(1)(ac)(iii) of the Act. Hence, the application filed by the assessee treated as non-maintainable and assessee's application u/s. 124(1)(ac)(vi) (B) is hereby rejected" Although, the Appellant complied necessary Rule 17A of Income Tax Rules, 1962 along with requisition documents for application for registration under Item (B) of sub-clause (vi) of clause (ac) of sub-section (1) of Section 12A of the income Tax Act, 1961. Therefore, your Appellant prays before the Hon'ble Members of the Appellate Tribunal for direction to grant the fresh Registration u/s 12AB of the Income Tax Act, 1961 against decision made by the Ld of Commissioner of Income Tax (Exemptions), Kolkata The Appellant craves the leave of the Hon'ble Members of income Tax Appellate Tribunal to urge further ground(s) at the time of hearing and to produce the documents in support of its argument, if required.”
Before us, the Learned. AR argued that during the proceedings for registration under Section 12A of the Act, a number of details were submitted before the Ld. CIT(E) and the same have been placed in a paper book running into 97 pages before the Bench. The Ld. AR argued that the Ld. CIT(E) has passed a non-speaking order and has simply doubted the cash donations even when such donations were duly received and disclosed in the accounts. Regarding the rejection of application under Section 80G(5)(iv)(B) of the Act it was averred that instead of dealing with that matter separately and on its merit, the Ld. CIT(E) has relied on his decision while rejecting the application under Section 12A of the Act. The Ld. AR concluded his argument by saying that considerable documents were filed at the time of hearing but they do not appear to have been taken note of by the Ld. CIT(E).
We have carefully considered the rival submissions and have also gone through the records before us, including the paper book filed by the Ld. AR. It is seen that in the impugned order a very cryptic finding is recorded about the alleged inadequacy of the details submitted by the assessee. In fact, the cash donations have been doubted with respect to & 1069/Kol/2025 Sankarpur Jamiah Salafiah Bahrul-Uloom their source. Considering the totality of facts and circumstances, it deserves to be held that the Ld. CIT(E) must adjudicate through a speaking order and must also consider the details and evidences filed by the assessee. to this extent, we set aside the impugned orders in both the appeals and remand the same back to the file of Ld. CIT(E) for giving a fresh opportunity to the assessee for filing necessary details. The assessee would do well to file details as and when asked for by the Ld. CIT(E).
In result, both the appeals are remanded back to the file of Ld. CIT(E) and are thus, allowed for statistical purposes.
Order pronounced on 24.07.2025