DATLA PADMA SUNDARI MEMORIAL CHARITABLE TRUST,HYDERABAD vs. ITO (EXEMPTIONS), WARD-1(1), HYDERABAD

Succinctly stated, the assessee trust that had earlier obtained registration u/s 12AB of the Act in “Form 10AD”, had filed an e- application in “Form No.10AB” seeking renewal of its registration u/s 12AB of the Act. Thereafter, the CIT(Exemptions) had issued notices directing the assessee trust to furnish various documents, including the trust deed/Memorandum of Association along with the other information that was called for in the said notices.

Ostensibly, the assessee trust in response to the aforesaid notices, submitted partial information. Thereafter, the CIT(Exemptions) issued another “Show Cause Notice” (SCN) dated 07.02.2025, wherein the assessee trust was called upon to submit the other information alongwith relevant documentary evidence.

The CIT(Exemptions), thereafter, observed that on a perusal of the submissions made by the assessee its charitable activities could not be justified with verifiable documentary evidence and, thus, the same was in violation of the provisions of Section 12AB of the Act. Accordingly, the CIT(Exemptions), vide his order dated 31.03.2025, declined the assessee’s application for renewal of registration u/s 12AB of the Act.

Aggrieved, the assessee trust has assailed the order of CIT(Exemption), dated 31.03.2025, declining its application for renewal of registration u/s 12AB of the Act before us.

We have heard the Ld. Authorized Representatives of both parties, perused the order of the CIT(Exemption) and the material available on record. 8. On a perusal of the record, we find that the CIT(Exemptions) had mechanically rejected the application filed by the assessee trust for registration u/s 12AB of the Act. The CIT(Exemption) has neither referred to the nature of the information that was furnished by the assessee trust before him, nor is there any whisper in his order regarding the specific information that was allegedly withheld by the assessee trust in defiance of his directions /notices. Also, we find, that though the CIT(Exemption), had observed, that the charitable activities of the assessee trust were not verifiable from the documentary evidence filed before him, but he had not at all elaborated on the said aspect and pointed out as to what all were the deficiencies in the material/evidence filed by the assesseee trust before him, based on which he had concluded that its charitable activities were not proved. 9. We are unable to persuade ourselves to concur with the dismissal of the application of the assessee trust, vide a non-speaking and cryptic order passed by the CIT(Exemption), as the same is not in conformity with the principles of natural justice. We are of the firm conviction that the CIT(Exemptions) was required to pass a reasoned and speaking order, even if the assessee trust had carried out partial compliance to the notices issued by him. Also, the CIT(Exemption) ought to have elaborated on the specific deficiencies in the material/documents filed before him, based on which he had concluded that the fact that the activities of the assessee trust were charitable in nature was not established. 10. We are of the considered view that, in all fairness, and in the interests of justice, the matter in the totality of the facts involved in the present case merits to be restored to the file of CIT(Exemptions) with a direction to re-adjudicate the same based on a speaking and reasoned order. Needless to say, the CIT(Exemptions) shall in the course of the set aside proceedings afford a reasonable opportunity of being heard to the assessee trust.

We thus, in terms of our aforesaid deliberations, set aside the order passed by the CIT(Exemptions) declining the assessee trust’s application for registration u/s 12AB of the Act, to his file with a direction to re-examine the application afresh and pass a speaking and reasoned order, after affording a reasonable opportunity of being heard to the assessee trust. 12. Resultantly, the appeal filed by the assessee trust is allowed for statistical purpose.

तिर्ााररती/The Assessee : Datla Padma Sundari Memorial Charitable Trust, H.No. 1-90/B/C/4/A, Plot No. 1, DSR Corporate Centre, Partika Nagar, Madhapur, Serilingampally, Hyderabad – 500081, Telangana. 2. राजस्व/ The Revenue : The Commissioner of Income Tax (Exemption), Hyderabad. 3. The Principal Commissioner of Income Tax (Exemptions), Hyderabad. 4. तवभागीयप्रतततितर्, आयकर अिीिीय अतर्करण, / DR, ITAT, Hyderabad. 5. गार्ाफ़ाईि / Guard file