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Facts
M/s. Haragopal Educational Society, an educational institution, applied for renewal of registration under Section 12AB of the Income Tax Act. The Ld. CIT(E) rejected the application via an order dated 18.03.2025, stating that the assessee's activities were not in accordance with the objects of the society.
Held
The Tribunal found that the CIT(E)'s rejection order was non-speaking, lacked specific findings on the assessee's submissions, and failed to point out defects or offer an opportunity to rectify them. The Tribunal set aside the impugned order and restored the matter to the Ld. CIT(E) for fresh adjudication, directing a reasoned order to be passed after providing proper opportunity to the assessee.
Key Issues
Whether the CIT(E) was justified in rejecting the application for renewal of registration under Section 12AB without a speaking order and without providing an opportunity to rectify alleged deficiencies.
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 RAVISH SOOD & SHRI MADHUSUDAN SAWDIA
आदेश/ORDER PER MADHUSUDAN SAWDIA, A.M. : This appeal is filed by M/s. Haragopal Educational Society (“the assessee”), feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Exemption), Hyderabad (“Ld. CIT(E)”), dated 18.03.2025 for the A.Y. 2025-26. 2. The assessee has raised the following grounds of appeal :
The brief facts of the case are that, the assessee is an educational society which had applied for renewal of registration under section 12AB of the Income Tax Act, 1961 (“the Act”), by filing Form No. 10AB on 29.09.2024. During the course of proceedings under section 12A(1)(ac)(ii) of the Act, the Ld. CIT(E) issued notices dated 03.12.2024 and 07.02.2025. In response, the assessee made submissions on 22.01.2025 and 03.03.2025 respectively. After considering the submission of the assessee, the Ld. CIT(E) rejected the assessee’s application for registration under section 12AB of the Act, vide its order in Form No.10AD dated 18.03.2025, observing that the activities of the assessee were not in accordance with the objects of the society.
Aggrieved by the said rejection order of Ld. CIT(E), the assessee is in appeal before the Tribunal. The Learned Authorised Representative (“Ld. AR”) submitted that the assessee had duly complied with the notices issued by the Ld. CIT(E) during the course of proceedings under section 12A(1)(ac)(ii) of the Act, and furnished all requisite documents on 22.01.2025 and 03.03.2025. In support of their submission, the Ld. AR invited our attention to the acknowledgement of both these submissions placed at page no.1 and page no.3 of the paper book. He submitted that the order passed by the Ld. CIT(E) rejecting the application is devoid of any discussion on the merits of the submissions and is non-speaking in nature. It was contended that the Ld. CIT(E) neither pointed out any specific defects in the documents submitted nor offered any opportunity to rectify the alleged deficiencies, if any. The Ld. AR therefore prayed that the impugned order be set aside and the matter be restored to the file of the Ld. CIT(E) for fresh adjudication, or alternatively, the Tribunal may grant registration directly in the interest of justice.
Per contra, the Learned Department Representative (“Ld. DR”) relied on the orders of revenue authorities.
We have heard the rival contentions and perused the material available on record. It is evident from the documents placed in the paper book that the assessee had complied with the notices issued by the Ld. CIT(E) by making submissions on 22.01.2025 and 03.03.2025, which were duly acknowledged. However, from a perusal of the impugned order, we find that the Ld. CIT(E) has not recorded any specific findings regarding the nature or contents of these submissions, nor has he pointed out any specific defect in the activities of the assessee society vis-à-vis its stated objects. The rejection order is devoid of any reasoning and lacks the attributes of a speaking order.
In view of the above, we are inclined to set aside the impugned order. Accordingly, the matter is restored to the file of the Ld. CIT(E) for de novo adjudication of the application filed by the assessee under section 12AB of the Act. The Ld. CIT(E) is directed to examine the submissions made by the assessee and decide the issue on merits by passing a reasoned and speaking order, in accordance with law, after affording a proper opportunity of being heard to the assessee.
In the result, the appeal of the assessee is allowed for statistical purpose.
Order pronounced in the open Court on 1st August, 2025.