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Facts
The assessee, a registered public charitable trust, applied for final approval under Section 80G of the Income Tax Act, 1961. However, the CIT(E) erroneously rejected its application for registration under Section 12AB instead of deciding the 80G approval application, despite the assessee already having provisional registration under Section 12AB and approval under Section 80G.
Held
The Tribunal held that the CIT(E)'s order rejecting 12AB registration was erroneous, as the assessee had applied for 80G approval. The Tribunal quashed the CIT(E)'s order and directed him to reconsider the assessee's application for regular approval under Section 80G afresh, providing due opportunity within three months.
Key Issues
Whether the CIT(E) erred in rejecting the application for registration under Section 12AB of the Act when the assessee had applied for approval under Section 80G, and whether the CIT(E) failed to consider facts and provide a reasonable opportunity before passing the order.
Sections Cited
12AB, 80G, 80G(5)(iii), 12A(1)(ac)(i), 11
AI-generated summary — verify with the full judgment below
Before: SHRI AMIT SHUKLA & SMT. RENU JAUHRI
Assessee by : Shri K Gopal a/w Ms. Neha Paranje Revenue by : Shri Manish Sareen Date of Hearing 06.01.2025 Date of Pronouncement 07.01.2025 आदेश / O R D E R PER RENU JAUHRI [A.M.] :- This appeal has been filed by the assessee against the orders of the Learned Commissioner of Income-tax (Exemption), Mumbai [hereinafter referred to as “CIT(E)”] rejecting application for registration u/s 12AB of the Income-tax Act, 1961 [hereinafter referred to as “Act”] dated 28.09.2024.
The assessee has raised following grounds of appeal:
A.Y. 2024-25 Indian Federation of Ultra Soud in Medical and Biology “1. The Commissioner of Income Tax (Exemption) [hereinafter referred to as the CIT(E)] erred in passing an order dated 28.09.2024 and thereby rejecting the registration under section 12AB of the Act while deciding the application in Form 10AB seeking approval under section 80G(5)(iii) of the Act without appreciating the facts and circumstances of the case. The order passed by the CIT(E) is not in accordance with the law. Thus, the same may be set aside.
2. The CIT(E) failed to appreciate that the Appellant has been granted a provisional registration under section 12A(1)(ac) (i) of the Act on 24.09.2021 and the same is valid from A.Y. 2022-23 till the A.Y. 2026-27. Thus, the CIT(E) is not justified in rejecting the registration under section 12A of the Act while deciding the application seeking approval under section 80G(5)(iii) of the Act.
The CIT(E) further, failed to appreciate that the objectives of the Appellant are to carry out the charitable activities and the same do not violate the provisions of section 11 of the Act. Hence, the CIT(E) is not justified in rejecting the registration under section 12AB of the Act. The order dated 28.09.2024 passed by the CIT(E) is not justified and the same may be set aside.
4. The CIT(E) is not justified in passing the order dated 24.09.2021 rejecting the registration under section 12AB of the Act without providing the Appellant a reasonable opportunity of being heard. The order passed by the CIT(E) is in violation of the principles of natural justice and the same may be set aside.
The Appellant seeks leave to add, alter and amend the above grounds whenever required.”
Brief facts of the case are that the assessee is registered as public charitable trust since 07.07.1980 under the Bombay Public Trust’s Act, 1950. The assessee applied for provisional registration u/s 12AB and approval u/s 80G on 13.08.2021. The provisional registration u/s 12AB as well as approval u/s 80G was granted vide orders dated 24.09.2021. Thereafter, on 30.03.2024, the assessee made an application in Form 10AB seeking final approval u/s 80G of the Act. However, Ld. CIT(E) disposed of the application vide order dated 28.09.2024 wherein he rejected the registration u/s 12AB instead of deciding the application u/s 80G.
3. Aggrieved with the order of Ld. CIT(E), the assessee is in appeal before us. During the course of hearing, Ld. AR pointed out that the provisional registration granted u/s 12AB was valid from AY 2022-23 to AY 2026-27.
A.Y. 2024-25 Indian Federation of Ultra Soud in Medical and Biology However, the provisional approval u/s 80G was valid only upto 31.03.2024, the assessee, therefore, applied for regular approval u/s 80G of the Act vide application dated 30.03.2024. However, Ld. CIT(E) erroneously rejected its application for grant of registration u/s 12AB of the Act instead of deciding the application for approval u/s 80G. He, therefore, submitted that the order passed by the Ld. CIT(E) is unlawful and void ab initio. Ld. DR has not controverted the submissions made by Ld. AR.
We have heard the rival submissions and perused the material placed before us. It is clear that Ld. CIT(E) has wrongly rejected the assessee’s registration u/s 12AB even though the application was made for approval u/s 80G and not for regular registration u/s 12AB. Relevant portion of the order of Ld. CIT(E) is reproduced herewith: “1. M/s Indian Federation Of Ultra Sound In Medicine And Biology(hereinafter 'the assessee' or 'the applicant) filed an application in Form 10AB u/s 80G(5) (iii) seeking approval under section 80G of the Act. ................ ................ ................ ................. .................. .................. .................. 4.Since Registration under section 12AB is to be granted in terms of the provisions of section 12AB(1)(b) of the Act after being satisfied about the objects of the trust or institution, the genuineness of activities, and the compliance of any other law for the time being in force as are material for the purposes of achieving its objects. In the absence of necessary compliance by the Applicant, the undersigned is unable to arrive at a satisfactory conclusion on these parameters. As such, in view of the statutory limitation to decide on the application on or before30.09.2024, the undersigned is left with no other option but to reject the application seeking registration under section 12AB of the Act.”
A.Y. 2024-25 Indian Federation of Ultra Soud in Medical and Biology 5. Thus, the order of Ld. CIT(E) is evidently erroneous as he has passed the order rejecting registration u/s 12AB on an application filed for approval u/s 80G of the Act. We hereby quash the order of the Ld. CIT(E) dated 28.09.2024 and direct him to consider the assessee’s application for regular approval u/s 80G afresh and decide the same within three months from the date of receipt of this order, after giving due opportunity to the assessee.
In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 07.01.2025.