ALMOND HOUSE FOUNDATION,HYDERABAD vs. CIT(EXEMPTION)), HYDERABAD

“ 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 22/11/2024, 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 registration of the Appellant Trust under section 80G of the Act, under the facts and circumstances of the case.

Whether the learned Principal Commissioner of Income-tax (Exemptions), Hyderabad, is justified in mechanically rejecting the application filed by the Appellant Trust under section 12AB stating that no substantial charitable activities are being carried out, under the facts and circumstances of the case.

The Appellant craves leave of this Hon'ble 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 Hon'ble Tribunal.

Aggrieved with the order of Ld. CIT(E), the assessee is in appeal before us. The Learned Authorised Representative (“Ld. AR”) submitted that, the assessee had fully complied with all the requirements and had provided complete details of its charitable activities to the Ld. CIT(E) including documentary evidences supporting its charitable nature, audited financial statements reflecting the application of funds towards charitable purposes, etc. However, the Ld. CIT(E) rejected the applications without providing any specific reason as to why the activities undertaken were not considered as charitable. The order is cryptic, non-speaking and arbitrary and the Ld. CIT(E) failed to point out any specific deficiency in the documents filed or the activities carried out by the assessee. Finally, the Ld. AR prayed before the bench for setting aside the impugned order for remanding the matter back to the file of Ld. CIT(E) for fresh consideration after providing the assessee with a proper opportunity of being heard.

Per contra, the Learned Department Representative (“Ld. DR”) supported the order of Ld. CIT(E) and argued that the Ld. CIT(E) rightly rejected the applications as the assessee failed to demonstrate substantial charitable activities. Finally, the Ld. DR prayed before the bench to reject the appeal of the assessee.

We have heard the rival contentions and also gone through the record in the light of the submissions made by either side. We have gone through the paper book filed by the assessee and found that the assessee has filed all the documents in compliance to the notices issued by the Ld. CIT(E) including the details of charitable activities conducted by the assessee, audited financial statements reflecting the application of funds, etc. We have also gone through the order passed by the Ld. CIT(E) and found that the Ld. CIT(E) has not pointed out any specific deficiency neither in the documents filed by the assessee nor in the activity carried out by the assessee. We also found that the order passed by the Ld. CIT(E) is non-speaking and lacks any reasoning. In our considered opinion, the rejection of applications for registration u/s.12AB of the Act and approval u/s.80G of the Act without assigning any specific reason is arbitrary and against the principle of natural justice. Accordingly, we hold that the Ld. CIT(E) has not properly appreciated the documents submitted by the assessee and has not given the assessee an opportunity of being heard. Therefore, in the interest of justice, we deem it appropriate to set aside the orders of Ld. CIT(E) and remand the matter back to the file of Ld. CIT(E) for fresh adjudication. Needless to say, the Ld. CIT(E) should provide an appropriate opportunity of being heard to the assessee before deciding the issue. Accordingly, both the appeals of the assessee are allowed for statistical purposes.

In the result, both the appeals of assessee are allowed for statistical purposes.