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Facts
The assessee-society applied for registration under Section 12AB of the Income Tax Act, 1961. The CIT(E) rejected the application, citing non-compliance and failure to provide adequate information regarding its activities and expenditure, despite the assessee submitting some details.
Held
The Tribunal held that the assessee was not given adequate opportunity to be heard and that the CIT(E) had rejected the application without fully considering the information provided earlier. Therefore, the order of the CIT(E) was set aside.
Key Issues
Whether the CIT(E) erred in rejecting the application for registration under Section 12AB without providing sufficient opportunity to the assessee and considering all submitted documents?
Sections Cited
12AB
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, HYDERABAD “B” BENCH: HYDERABAD
Before: SHRI VIJAY PAL RAO & SHRI MANJUNATHA G
1 ITA.No.357/Hyd./2025 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD “B” BENCH: HYDERABAD BEFORE SHRI VIJAY PAL RAO, VICE PRESIDENT AND SHRI MANJUNATHA G, ACCOUNTANT MEMBER ITA.No.357/Hyd/2025 Assessment Year 2023-2024 Tathwa Educational The Income Tax Officer, Society, Hayatnagar, Exemption Ward-1(3), vs. KV Ranga Reddy Dist. Hyderabad. PIN – 500 070. Telangana. PAN AAJAT7398C (Appellant) (Respondent) For Assessee : Shri SNSR Chinmai, Advocate For Revenue : Shri Narender Kumar Naik, CIT-DR Date of Hearing : 03.06.2025 Date of Pronouncement : 03.06.2025 ORDER PER MANJUNATHA G. :
This appeal has been filed by the Assessee against the order dated 10.12.2024 of the learned Commissioner of Income Tax-(Exemption), Hyderabad, in rejecting the application in Form-10AB of the assessee society for registration u/sec.12AB of the Income Tax Act, 1961 [in short “the Act”].
2 ITA.No.357/Hyd./2025 2. Brief facts of the case are that, the assessee- society has commenced it’s activities in the financial year 2021-2022 and the main objectives of assessee-society is to provide education. The assessee-society has filed an application in Form No.10AB seeking for registration u/sec.12AB of the Act. During the course of proceedings, the learned CIT(E) called for certain information i.e., to produce the copy of Memorandum of Association/Trust deed for verification and to furnish a detailed reply. In response to the same, the assessee has submitted partial information. Therefore, the learned CIT(E) issued another notice dated 30.10.2024 to submit the other information along with relevant documentary evidences. Since, there were no compliance from the side of the assessee-society to verify the genuineness of activities and the expenditure of the trust towards it’s objectives, the application of the assessee-society filed in Form-10AB seeking for registration u/sec.12AB of the Act was rejected by the learned CIT(E).
3 ITA.No.357/Hyd./2025 3. Aggrieved by the order of the learned CIT(E), the assessee-society is now in appeal before the Tribunal.
Shri SNSR Chinmai, Advocate-Learned Counsel for the Assessee, submitted that, the learned CIT(E) had simply rejected the application of the appellant trust filed in Form-10AB for registration u/sec.12AB of the Act. In support of this contention, he drew the attention of the Bench with respect to the observations of the learned CIT(A) in para-3 of the order wherein the learned CIT(E) observed that, the application in Form-10AB is to be decided in time bound manner and non-submission of mandatory information to verify the genuineness of activities and expenditure of the trust towards it’s objectives, the present application in Form-10AB for registration u/sec.12AB of the Act is herewith rejected. He, accordingly, submitted that, adequate opportunity of being heard to the assessee-society has not been provided by the learned CIT(E) and, therefore, one more opportunity may please be provided to the assessee-society to substantiate it’s case by remitting the matter back to the learned CIT(E) for afresh adjudication.
4 ITA.No.357/Hyd./2025 5. Shri Narender Kumar Naik, learned CIT-DR, on the other hand, supporting the order of learned CIT(E) submitted that, the assessee-society has made the application for registration in Form-10AB for registration u/sec.12AB of the Act. He further submitted that, since the assessee-society has failed to prove it’s onus of charitable activities carried-out by it with supporting documents to the satisfaction of the learned CIT(E), he rejected the application filed by the assessee-society in Form-10AB for registration u/sec.12AB of the Act and that the order of the learned CIT(E) is in accordance with law. He accordingly submitted that the order of the learned CIT(E) be confirmed since it is not a fit case for reconsideration by the learned CIT(E).
We have heard both the parties, perused the material on record and the orders of the authorities below. The learned CIT(E) dismissed the application filed by the assessee-society in Form-10AB seeking for registration u/sec.12AB of the Income Tax Act, 1961 on the ground that there is no compliance from the assessee-society. However, the fact remains that, the learned CIT(E) issued three 5 ITA.No.357/Hyd./2025 notices on 04.07.2024, 22.08.2024 and 30.10.2024. In response, the assessee-society, for the notice dated 04.07.2024, has filed all details vide it’s submissions dated 15.07.2024 and enclosed relevant bye laws of the assessee- society, registration certificate, return of income along with financial statement of relevant financial years, bank account details etc., Although, the assessee-society has not responded to the subsequent notice dated 30.10.2024, but, the learned CIT(E) without considering the details submitted by the assessee-society on earlier occasions, has rejected the application on the ground that there is no compliance from the assessee-society. Therefore, we are of the considered view that, the issue needs to go back to the file of learned CIT(E) to give one more opportunity of hearing to the assessee-society. Thus, we set-aside the order of the learned CIT(E) and restore the issue back to the file of learned CIT(E) with a direction to re-consider the application filed by the assessee in Form-10AB for registration of the Society u/sec.12AB of the Income Tax Act, 1961. Needless to say, the assessee-society shall furnish relevant evidences 6 ITA.No.357/Hyd./2025 in support of it’s claim. Accordingly, the grounds of appeal of the assessee-society is allowed for statistical purposes.
In the result, appeal of the Assessee is allowed for statistical purposes.
Order pronounced in the open Court on 03.06.2025.