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Facts
The assessee, a charitable trust, applied for registration under Section 12AB of the Income Tax Act. The CIT(E) rejected the application for non-submission of documents and non-appearance, despite the assessee claiming procedural delays and lack of awareness. The appeal was filed with a delay of 122 days, which was condoned.
Held
The Tribunal held that the order was passed ex parte without adequate opportunity and that the assessee's explanation for non-compliance was supported by an affidavit. Considering it was a first application under a new regime for a small trust, restoring the matter for fresh consideration would serve the ends of justice.
Key Issues
Whether the rejection of registration application under Section 12AB without providing adequate opportunity for compliance and explanation violates principles of natural justice.
Sections Cited
12AB, 12AB(1)(b)(ii)
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Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD
Before: MS. SUCHITRA R. KAMBLE & MAKARAND V.MAHADEOKARShri Manish Rajvaidya, AR Shri Rignesh Das, CIT-DR
आदेश आदेश/O R D E R आदेश आदेश
PER MAKARAND V.MAHADEOKAR, AM :
This appeal by the assessee arises from the order of the learned Commissioner of Income Tax (Exemption), Ahmedabad [hereinafter referred to as “CIT(E)”] dated 21.11.2024, passed under section 12AB(1)(b)(ii) of the Income Tax Act, 1961[hereinafter referred to as “the Act”], rejecting the application for registration filed in Form 10AB.
Condonation of Delay:
2.1 The appeal has been filed with a delay of 122 days, supported by a duly sworn affidavit of the trustee, Shri Pankajkumar Jashavanhlal Parikh, dated 03.04.2025. In the affidavit, it has been explained that the assessee was unaware of the rejection of its registration application, as no communication or hearing notice was received. It was further stated that the delay occurred due to procedural complexities in the newly inserted provisions governing trust registration under section 12AB.
2.2 The Departmental Representative did not raise any serious objection to the condonation. Considering the bona fide explanation and the absence of mala fide intention, the delay is condoned in the interest of substantial justice.
Facts of the case 3.1 The assessee, a registered charitable trust filed an application in Form No. 10AB on 11.06.2024 seeking registration under section 12AB of the Income Tax Act, 1961.
3.2 The learned CIT(E) issued a notice calling for a detailed note on activities carried out by the trust, copies of audited accounts, and supporting evidences. The order records that despite issuance of notices, the assessee did not furnish the requisite documents or appear before the authority.
3.3 Relying on the absence of compliance, the CIT(E) passed the impugned order rejecting the application under section 12AB(1)(b)(ii), holding that the genuineness of activities and the compliance with section 12AB conditions could not be verified.
3.4 The assessee has raised the following grounds of appeal before us:
1. Unjustified Rejection: The rejection of 12AB Registration was solely due to the non-submission of detailed note on activities carried out by the trust as well as certain details or documents mentioned in the notice issued on 07.09.2024.
2. Compliance with Section 12AB: The trust meets all requirements under section 12AB, and the delay in submission was due to procedural lapses, not non compliances
3. Natural Justice: The rejection is unjustified as the appellant trust had substantially complied with the requirement and minor deficiencies could have been rectified. The appellant submits that the rejection without further opportunity to explain or submit pending documents was against the principal of natural justice.
4. Condonation of delay: The appellant respectfully seeks condonation for the delay in filing this appeal due to inadvertent procedural delays and lack of proper guidance. To the extent of above, the order of the Commissioner of Income Tax (Exemption) is bad in law and is pray to be quashed. Your appellant craves leave to add, to alter, to amend and/or to modify any of the grounds of appeal or to take back the appeal at any stage of appeal.
3.5 At the hearing scheduled for 15.10.2025, the assessee filed an adjournment petition dated 13.10.2025, stating that the paper book and supporting documents were under compilation and that the trust’s auditor was preoccupied with tax audit and return filings due by 31.10.2025. The adjournment was rejected, and the matter was heard.
3.6 The assessee filed a paper book dated 13.10.2025 containing 43 pages, duly certified by the trustee. The following documents were placed by the assessee on record:
Sr. Particulars Page No. Nos. 1 Copy of duly sworn affidavit of trustee with 1–6 condonation application 2 Certificate of registration of trust along with trust deed 7–19 3 Audited financial statements for F.Y. 2021–22 20–28 4 Audited financial statements for F.Y. 2022–23 29–38 5 Audited financial statements for F.Y. 2023–24 39–43 3.7 The trustee certified that all these documents were not earlier filed before the CIT(E) due to unawareness and lack of representation but are now produced for proper appreciation of the trust’s activities and compliance.
We have carefully considered the submissions and perused the record. The impugned order reveals that the learned CIT(E) rejected the registration solely for want of submission of documents and non- appearance of the assessee. It is not in dispute that the assessee’s application was within time, and the rejection was not on the basis of any adverse material regarding the genuineness of its objects or activities. The paper book filed before us contains audited financial statements for three years, trust deed, and registration certificate, which are relevant for the determination of the trust’s genuineness. These documents were admittedly not before the CIT(E).
4.1 We observe that the order was passed ex parte without adequate opportunity of being heard, and the assessee’s explanation for non- compliance is supported by a sworn affidavit. Considering that this is the first application under the new registration regime and the assessee is a small local charitable trust, we are of the view that the ends of justice would be served by restoring the matter to the file of the CIT(E) for a fresh decision. It is the settled law that where an order is passed without giving effective opportunity, the matter should be restored for fresh consideration. Similar view has been taken by several coordinate benches in comparable circumstances.
4.2 Accordingly, we set aside the impugned order of the CIT(E) and remit the matter back to his file with the direction to consider the assessee’s application afresh in accordance with law, after affording due opportunity to furnish all evidences in support of its claim under section 12AB. The assessee shall cooperate and file all requisite documents as called for.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the Court on 16th October, 2025 at Ahmedabad.