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Facts
The assessee, a charitable trust, applied for renewal of registration under Section 12AB of the Income Tax Act. The Ld. CIT(E) rejected the application, stating that the charitable activities were not substantiated with verifiable documentary evidence, despite the assessee having submitted several documents.
Held
The Tribunal found that the CIT(E)'s rejection order was cryptic and failed to detail specific deficiencies in the submitted documents. In the interest of natural justice, the Tribunal set aside the CIT(E)'s order and restored the matter for fresh adjudication, granting the assessee an opportunity to present additional evidence and be heard.
Key Issues
Whether the CIT(E) was justified in mechanically rejecting the renewal of registration for a charitable trust under Section 12AB due to alleged lack of verifiable documentary evidence, and if the assessee should be granted a further opportunity to substantiate its claim.
Sections Cited
12AB, 12A(1)(ac)(ii)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Hyderabad ‘B’ Bench, Hyderabad
Before: SHRI VIJAY PAL RAO & SHRI MADHUSUDAN SAWDIA
आदेश/ORDER PER MADHUSUDAN SAWDIA, A.M. : This appeal is filed by M/s. Secunderabad Twin Area Round Table Charitable Trust (“the assessee”), feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Exemptions), Hyderabad (“Ld. CIT(E)”), dated 31.03.2025.
2. The assessee has raised the following grounds of appeal :
“1. The order of rejection for approval under section 12AB of the Act, passed by the learned Principal Commissioner of Income-tax [Exemption], Hyderabad, dated 31/05/2025, in so far as it is against the Appellant is opposed to law, equity, weight of evidence, probabilities and the facts and circumstances in the Appellant’s case.
Whether the learned Principal Commissioner of Income-tax (Exemptions), Hyderabad, is justified in mechanically rejecting the application filed by the Appellant for renewal of registration of the Appellant Trust under section 12AB of the Act, under the facts and circumstances of the case.
3. Whether the learned Principal Commissioner of Income-tax (Exemptions), Hyderabad, is justified in mechanically renewal of rejecting the application filed by the Appellant Trust under section 12AB stating that the charitable activities are not justified with verifiable documentary evidence which is in violation of the provisions of the section 12AB of the Act, under the facts and circumstances of the case.
4. The Appellant craves leave of this Honorable Tribunal to add, alter, delete or substitute any or all of the grounds urged above, at the time of hearing of the appeal by this Honorable Tribunal.
5. In the view of the above and other grounds that may be urged at the time of the hearing of the appeal, the Appellant prays that the appeal may be allowed in the interest of justice and equity.”
The brief facts of the case are that, the assessee is a trust which had applied for renewal of registration under section 12AB of the Income Tax Act, 1961 (“the Act”) by filing Form No. 10AB on 25.09.2024. During the course of proceedings under section 12A(1)(ac)(ii) of the Act, the Ld. CIT(E) called for certain documents and information from the assessee. In response to the said notice, the assessee submitted partial information. The Ld. CIT(E) thereafter issued another notice on 07.02.2025, to which the assessee made compliance on 24.02.2025. After perusal of the submissions, the Ld. CIT(E) rejected the renewal of registration under section 12AB of the Act on the ground that the charitable activities were not substantiated with verifiable documentary evidence.
Aggrieved with the order of Ld. CIT(E), the assessee is in appeal before the Tribunal. The Learned Authorised Representative (“Ld. AR”) submitted that the assessee had filed all the required information and documents called for by the Ld. CIT(E), including copy of the Trust Deed (placed at page nos. 1 to 32 of the paper book), copy of financial statements for AYs 2021–22, 2022–23, and 2023–24 (placed at page nos. 55 to 57 of the paper book) and copy of bank statements (placed at page nos. 58 to 66 of the paper book). It was further submitted that the order of the Ld. CIT(E) is cryptic and does not point out any specific deficiency in the documents filed by the assessee. In the interest of justice, the Ld. AR pleaded that the matter may be set aside to the file of the Ld. CIT(E) for fresh adjudication after considering the documents already filed and after giving the assessee an opportunity of being heard, with liberty to file any additional evidence, if required, and to pass a speaking order.
Per contra, the Learned Departmental Representative (“Ld. DR”) relied upon the order of the Ld. CIT(E) and submitted that the assessee had failed to substantiate the charitable activities with verifiable evidence despite opportunities given. It was submitted that the Ld. CIT(E) had rightly rejected the renewal application after due consideration of the material available on record.
We have heard the rival submissions and perused the material available on record. We find that the assessee has placed on record copy of the Trust Deed (placed at page nos. 1 to 32 of the paper book), copy of financial statements for AYs 2021–22, 2022–23, and 2023–24 (placed at page nos. 55 to 57 of the paper book) and copy of bank statements (placed at page nos. 58 to 66 of the paper book). The assessee claims that these were duly filed before the Ld. CIT(E), but the impugned order does not deal with these documents in detail or point out any specific deficiency therein. In the interest of natural justice, we are of the view that one more opportunity should be given to the assessee to substantiate its claim for renewal of registration under section 12AB of the Act. Accordingly, we set aside the impugned order and restore the matter to the file of the Ld. CIT(E) for fresh adjudication. The Ld. CIT(E) shall consider the documents already filed, permit the assessee to file any additional evidence if deemed necessary, grant adequate opportunity of being heard, and pass a speaking order in accordance with law. We make it clear that we have not expressed any opinion on the merits of the case, and all issues are left open for adjudication afresh.
In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 20th Aug., 2025.