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Facts
The assessee, M/s. Indishine Foundation, applied for registration under Section 80G of the Income Tax Act, 1961, which was rejected by the CIT(E) through a non-speaking order. This rejection stated that the assessee's activities were not commensurate with its objectives or 80G conditions. Curiously, the same CIT(E) had granted the assessee registration under Section 12AB of the Act just three days after the 80G application was rejected.
Held
The Tribunal found the CIT(E)'s rejection order for Section 80G to be a non-speaking order, making it unsustainable in law. It noted the inconsistency of granting Section 12AB registration while simultaneously rejecting Section 80G, implying the genuineness of activities had already been verified. Therefore, the matter was remanded to the CIT(E) for fresh consideration on merits, with directions to pass a reasoned order after giving the assessee due opportunity.
Key Issues
Whether the CIT(E)'s non-speaking order rejecting the assessee's Section 80G registration was valid, especially given that the same authority had recently granted Section 12AB registration.
Sections Cited
80G, 80G(5), 12A, 12AA, 12AB
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Hyderabad ‘B’ Bench, Hyderabad
Before: SHRI RAVISH SOOD & SHRI MADHUSUDAN SAWDIA
(निर्धारण वर्ा/Assessment Year:2023-24) M/s. Indishine Foundation, Commissioner of Income Tax Vs. (Exemption), Hyderabad. Hyderabad. PAN:AAGCI9967D (Appellant) (Respondent) निर्धाररती द्वधरध/Assessee by: Shri K.N. Nishanth Rao, Advocate रधजस् व द्वधरध/Revenue by:: Dr.Narendra Kumar Naik, CIT-DR सुिवधई की तधरीख/Date of hearing: 05/08/2025 घोर्णध की तधरीख/Pronouncement: 08/08/2025 आदेश/ORDER PER MADHUSUDAN SAWDIA, A.M.: This appeal is filed by M/s. Indishine Foundation (“the assessee”), feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Exemptions), Hyderabad (“Ld. CIT(E)”), dated 19.03.2025 for the A.Y. 2023-24.
The assessee has raised the following grounds of appeal :
The brief facts of the case are that, the assessee is a company registered under Section 8 of the Companies Act, 2013. The assessee filed an application in Form no.10AB on 16.09.2024 seeking registration under Section 80G of the Income Tax Act, 1961 (“the Act”). Upon perusal of the documents and submissions filed by the assessee, the Ld. CIT(E) rejected the application vide order in Form No. 10AD dated 19.03.2025, holding that the activities of the assessee were not commensurate with the stated objectives and not in conformity with the conditions prescribed under Section 80G of the Act.
Aggrieved by the order of Ld. CIT( E ), the assessee is in appeal before this Tribunal. The Learned Authorised Representative (“Ld. AR”) submitted that during the proceedings before the Ld. CIT(E), the assessee was issued two notices dated 03.12.2024 and 17.02.2025 respectively. The assessee duly complied with both the notices by making submissions, copies of which are placed at page nos. 68 to 77 and 90 to 95 of the paper book. He further submitted that despite making full compliance and furnishing all required documents, the Ld. CIT(E) rejected the application through a non- speaking order without pointing out any specific deficiency or non- compliance in the submissions made by the assessee. The Ld. AR also brought to our attention that the same Ld. CIT(E) subsequently granted registration to the assessee under Section 12AB of the Act vide order in Form no.10AD dated 22.03.2025 (copy placed at pages 99 to 102 of the paper book), just three days after the rejection of the Section 80G application. He contended that once the registration under Section 12AB of the Act has been granted by the same authority upon verifying the genuineness of activities, rejection of application under Section 80G of the Act, without detailed reasoning, is unjustified. He therefore prayed that, in the interest of justice, the matter may be restored to the file of the Ld. CIT(E) for fresh consideration on merits after granting adequate opportunity to the assessee.
Per contra, the Learned Departmental Representative (“Ld. DR”) relied on the order of the Ld. CIT(E) and submitted that the assessee failed to demonstrate that its activities were aligned with its stated objects and complied with the conditions of Section 80G. However, the Ld. DR fairly admitted that the order passed by the Ld. CIT(E) is cryptic and does not record any specific finding with regard to the deficiency in the activities or documents furnished by the assessee.
We have considered the rival contentions and perused the records placed before us. The assessee had filed an application for grant of approval under Section 80G of the Act in form no.10AB on 16.09.2024. During the course of proceedings, two notices were issued by the Ld. CIT(E) on 03.12.2024 and 17.02.2025 respectively, to which the assessee has duly responded. We have gone through the submissions made in response to the above notices and find that the assessee had furnished detailed replies along with supporting documents. Copies of such submissions are placed on record at page nos. 68 to 77 and 90 to 95 of the paper book. However, the order passed by the Ld. CIT(E) rejecting the application under Section 80G of the Act dated 19.03.2025 is devoid of any discussion on the submissions made by the assessee and does not record any specific deficiency, contradiction, or violation of Section 80G conditions. Such a non-speaking order, passed without dealing with the objections and documents submitted by the assessee, is not sustainable in law.
We also find merit in the submission of the Ld. AR that the same Ld. CIT(E) has subsequently granted registration under Section 12AB of the Act vide order in Form no.10AD dated 22.03.2025 (page nos.99 to 102 of the paper book). This indicates that the Ld. CIT(E), having verified the nature and genuineness of the activities for the purpose of Section 12AB, found no deficiency in the conduct of the assessee.
In view of the above, we are of the considered opinion that the matter deserves to be restored to the file of the Ld. CIT(E) for de novo consideration on merits, after duly examining the submissions already made by the assessee and granting further opportunity of being heard and furnishing any additional documents, if required. Accordingly, the Ld. CIT(E) is directed to pass a reasoned and speaking order in accordance with law, after affording adequate opportunity to the assessee.
In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 8th August, 2025.