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Facts
The assessee, a charitable trust, applied for regular registration u/s.12A and approval u/s.80G. The CIT(E) rejected the applications after the assessee failed to provide complete information in response to two notices, citing non-compliance and lack of verification of genuineness of activities.
Held
The Tribunal set aside the impugned orders of the CIT(E) and restored the issue to the CIT(E)'s file. A final opportunity is granted to the assessee to furnish requisite details and substantiate its case.
Key Issues
Whether the CIT(E) was justified in rejecting the applications for registration and approval due to non-compliance with notices, and whether the assessee should be granted another opportunity.
Sections Cited
12A, 12AB, 80G(5), 10(23AA), 10(23C), 11, 12, 12A(1)(ac), 12A(1)(ac)(iii), 80G(5)(iii), 80G(5)(vi)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCHES “A”, PUNE
Before: DR.MANISH BORAD & SHRI VINAY BHAMORE
आदेश / ORDER
PER DR. MANISH BORAD, ACCOUNTANT MEMBER :
The captioned appeals at the instance of appellant are against the rejection of applications for regular registration u/s.12A and approval u/s.80G respectively of the Income-tax Act, 1961 framed by CIT(E), Pune dated 09.12.2024.
Briefly, the facts of the case are that the appellant is a trust, filed application in Form No.10AB under clause (iii) of section 12A(1)(ac) for grant of registration u/s.12AB of the Act on 08.06.2024. In order to verify the genuineness of activities of the appellant trust, the ld. CIT (Exemption) issued a notice dt. 12.07.2024 through ITBA portal calling upon the appellant trust to file certain information/clarification. Assessee furnished the requisite details. Thereafter, ld.CIT(E) issued another notice dated 26.11.2024 seeking details of loans raised by the appellant and the nature and purpose of such loans.
There was no compliance from the side of the appellant to the said notice issued by ld.CIT(E). In the circumstances, the ld. CIT(Exemption) rejected the application filed for grant of regular registration observing as under :
“6. Since, the assessee has not furnished any explanation to the discrepancies communicated to it, it is presumed that the assessee has nothing to say in the matter.
7. Considering the above facts discussed in the show notice and discrepancies noticed and also that the assessee has not complied with the provisions of section 12AB(1)(b)(i) of the Income Tax Act, 1961 as well as the provisions of Rule 17A(2) of Income Tax Rules, 1962 in spite giving sufficient opportunities, the undersigned is unable to draw any satisfactory conclusion about the genuineness of activities of the assessee and compliance of requirements of any other law for the time being in force by the assessee as are material for the purpose of achieving its objects.
8. Without prejudice to the above, it is seen from the record that the assessee's previous application dated 29/10/2023 under section 12A(1)(ac)(iii) has been rejected and its provisional registration dated 06/04/2023 has already been cancelled vide this office order dated 17/04/2024. In view of the above, it is seen that the assessee was not having valid provisional registration under section 12AB of the Act as on the date of present application hence the prerequisite for application under the provisions of clause (iii) of section 12A(1)(ac) of the Income Tax Act, 1961 is not fulfilled.
9. In view of the above the application filed by the assessee is hereby rejected.”
Similar is the fate of application for approval u/s.80G(5) of the Act. Finding of ld.CIT(E) reads as under :
“7. Considering the above facts discussed in the show notice and discrepancies noticed and also that the assessee has not complied with the provisions of sub-clause (a) of clause (ii) of second proviso to section 80G(5) of the Income Tax Act, 1961 as well as the provisions of Rule 11AA(2) of Income Tax Rules, 1962 in spite giving sufficient opportunities, the undersigned is unable to draw any satisfactory conclusion about the genuineness of activities of the assessee and fulfilment of conditions laid down in clause (i) to (v) of section 80G(5) of the Act.
As per the condition vide clause (i) of section 80G(5) of the Income Tax Act, 1961, the approval is available only if the income of the institution or fund is not be liable to inclusion in its total income under the provisions of section 11 and 12 or clause (23AA) / clause (23C) of section 10 of the Income Tax Act, 1961. Exclusions for the said condition are detailed in clause (a), (b) and (c) of proviso to clause (i) of section 80G(5) of the Act. Therefore, the institution / fund is required to be regularly registered / approved either under section 12AB or 10(23AA) or 10(23C) of the Income Tax Act. 1961 or the institution / fund shall be a Regimental Fund or Non-Public Fund established by the armed forces of the Union for the welfare of the past and present members of such forces or their dependents.
In the instant case it is noticed that the assessee is neither regularly registered u/s.12AB read with section 12A(1)(ac)(i) /12A(1)(ac)(iii) nor having regular approval under section 10(23C) read with clause (i) / (iii) of first proviso to the said section and the case is not covered under the exclusions provided vide proviso to clause (i) of section 80G(5) of the Act. The assessee is not approved under section 10(23AA) of the Act. The assessee is also not a Regimental Fund or Non-Public Fund established by the armed forces of the Union for the welfare of the past and present members of such forces or their dependents. In fact, the application of the assessee in form No. 10AB for registration u/s 12AB filed under the provisions of section 12A(1)(ac) (iii) of the Act has been rejected vide order dated 09/12/2024. Therefore, the condition (i) of section 80G(5) of the Income Tax Act, 1961 is also not fulfilled in this case.
Without prejudice to the above, it is seen from the record that the assessee's previous application dated 29/10/2023 under section 80G(5)(iii) has been rejected and its provisional registration dated 06/04/2023 has already been cancelled vide this office order dated 17/04/2024 In view of the above, it is seen that the assessee was not having valid provisional approval under section 80G(5) (vi) of the Act as on the date of present application hence the prerequisite for application under the provisions of clause (iii) of first proviso to section 80G(5) of the Income Tax Act, 1961 is not fulfilled.
In view of the above, the application filed by the assessee is hereby rejected.”
Being aggrieved, the appellant trust has approached this Tribunal assailing the impugned orders denying the grant of registration as well as approval u/s.80G(5) of the Act.
Ld. Counsel for the assessee submitted that assessee could not make proper compliance to the second notice(s) issued by ld.CIT(E) for the reasons beyond control of the assessee. A prayer is made to provide one more opportunity by remitting the issues to the file of ld.CIT(E). and 280/PUN/2025 The Dhulia Charitable Society 6. On the other hand, Ld. DR supported the orders of ld.CIT(E).
We have heard the rival contentions and perused the relevant material on record placed before us. Appellant is aggrieved by the rejection of applications for grant of regular registration u/s.12A and approval u/s. 80G(5) of the Act. It is an admitted fact that the appellant failed to make compliance before ld.CIT(E) for the second notice(s) substantiating the charitable activities carried by it due to which the Ld. CIT(E) rejected the applications of the appellant for regular registration u/s.12A and also cancelled the provisional registration granted. The appellant’s application for grant of approval u/s.80G has also been rejected by the Ld. CIT(E) on the similar grounds.
8. Considering the totality of the facts and in the circumstances of the case enumerated above and in the larger interest of justice, we deem it proper, to set aside the impugned order(s) of the Ld. CIT(E) and restore the issue(s) to the file of ld.CIT(E) with a direction to grant one final opportunity to the appellant to explain and substantiate its case by filing the requisite details as may be required/called upon and decide both the applications of the appellant u/s.12A and 80G of the Act afresh in accordance with law. Appellant is also hereby directed to remain vigilant and make its submissions on the appointed date without seeking any adjournment under any pretext unless required for the sufficient cause, failing which the Ld. CIT(E) shall be at liberty to pass appropriate order(s) as per law. Grounds raised
by the appellant in both the appeals are accordingly allowed for statistical purposes. and 280/PUN/2025 The Dhulia Charitable Society
9. In the result, both the appeals filed by the appellant are allowed for statistical purposes.
Order pronounced on this 09th day of September, 2025.