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Facts
The assessee applied for registration under Section 12AB of the Income Tax Act, 1961. The CIT(E) rejected the application, citing insufficient evidence of genuine charitable activities and alleging the assessee claimed activities of a sister concern. The assessee argued the rejection was beyond the limitation period and violated principles of natural justice.
Held
The Tribunal found merit in the assessee's argument regarding the violation of natural justice, as the CIT(E) allegedly relied on third-party information without confronting the assessee. The impugned order was set aside to provide a fair opportunity for adjudication.
Key Issues
Whether the CIT(E) order rejecting the registration application was passed beyond the limitation period and if principles of natural justice were violated by relying on external information.
Sections Cited
12AB, 12A(1)(ac)(iii), 80G(5)
AI-generated summary — verify with the full judgment below
िनधा�रती की ओर से/Assessee by : Shri Tejmohan Singh, Advocate राज� की ओर से/ Revenue by : Smt. Tarundeep Kaur, CIT, DR(Virtual Mode) सुनवाई की तारीख/Date of Hearing : 10/12/2025 उदघोषणा की तारीख/Date of Pronouncement : 15/12/2025 आदेश/Order PER LALIET KUMAR, J.M: Both the above appeals have been filed by the Assessee against the order of the Ld. CIT(E), Chandigarh each dt. 11/02/2025.
Since both the above appeals were heard together therefore they are being disposed off by this consolidated for the sake of convenience and brevity.
We shall take up the appeal of the assessee in for the Assessment Year 2022-23 as a lead case for discussion wherein the assessee has raised following grounds:
1. That the order of the Commissioner of Income Tax(Exemptions) rejecting the application for registration u/s 12AB vide order dated 11.02.2025 has been passed beyond the proceeding limitation date of 31.01.2025 and as such it is deemed acceptance of the application filed for registration u/s 12AB in the absence of any rejection order passed on or before the proceeding limitation date of 31.01.2025 and as such the order passed is illegal, arbitrary and unjustified.
2. That the Ld. Commissioner of Income Tax(Exemptions) has erred in law as well as on facts in rejecting the application filed for registration u/s 12AB alleging
2 absence of proof of genuineness of activities which is illegal, arbitrary and unjustified. 3. That the Ld. Commissioner of Income Tax(Exemptions) has erred in holding that the applicant assessee is not engaged in conducting genuine charitable activities which is an incorrect finding and as such the order passed is arbitrary and unjustified. 4. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off.
5. That the order of the Ld. Commissioner of Income Tax(Exemptions) is erroneous, arbitrary, opposed to law and facts of the case and is, thus, untenable.
4. Briefly, the facts of the case are that the assessee applied for registration under section 12A(1)(ac)(iii) of the Income Tax Act, 1961, on 09/07/2024. Following an initial finding that the submitted documents were insufficient to assess the genuineness of the trust's activities, the Ld. CIT(E) issued a questionnaire on December 18, 2024, requiring the Trust to provide evidence of its charitable activities and compliance with its objects. The assessee replied on 31/12/2025 , confirming its formation date as 11/08/2017, and the commencement of activities as 01/11/2024. The Trust stated that all services were provided free of cost and that the sole charitable activity conducted was a donation of Rs. 2,41,302/- on 21/11/2024 to Mehar Baba Charitable Trust for eye operation of poor’s. 4.1 The Ld. CIT(E) found that the only activity performed by the assessee since its inception in 2017 was the single donation made after the registration application was filed. Furthermore, the photograph provided as documentary evidence of this donation indicated that the activity was conducted by Mehar Baba Charitable Trust & Bebo Technologies in collaboration with Bebo Foundation, and the assessee's name was not on the sign board. Observing that the assessee, Bebo Technologies, and Bebo Foundation appeared to share the same directors, the CIT(E) concluded that the assessee was not engaged in conducting genuine charitable activity but was instead claiming the activity of others as its own. Consequently, based on the lack of proof regarding the genuineness of the activities, the application for permanent registration was rejected.
3 4.2 The Ld. AR for the assessee drew our attention to Para 3.2 of the impugned order passed by the Ld.CIT(E). It was vehemently argued that the Ld. CIT(E) has relied upon certain information allegedly available in the public domain to arrive at adverse conclusions.
4.3 The Ld. AR further submitted that the Ld. CIT(E) has drawn a specific inference based on the photographs supplied by the assessee, concluding that the assessee is not carrying out any charitable activity and that such activities were, in fact, being carried out by a sister concern of the assessee. It was contended that there is a gross violation of the principles of natural justice, as the documents and external information relied upon by the lower authority were never confronted to the assessee for rebuttal. In view of these facts, the Ld. AR prayed that the matter be remitted back to the file of the Ld. CIT(E) to grant a fresh opportunity of being heard.
Per contra, the Ld. Departmental Representative (DR) relied on the findings of the impugned order. The Ld. DR submitted that the conclusion of the Ld. CIT(E) was not solely based on information available in the public domain but was substantially based on the documents and photographs supplied by the assessee itself during the proceedings. Therefore, the Ld. DR argued that the order of the Ld. CIT(E) is well-reasoned and requires no interference.
We have carefully considered the rival submissions and examined the record. The grievance of the assessee primarily rests on the allegation that the Ld. CIT(E) relied upon third-party information or public domain data without confronting the same to the assessee, thereby violating the principles of natural justice.
6.1 In the interest of justice, and to provide the assessee a fair opportunity to present its case before the appropriate authority, we consider it appropriate to set aside the impugned order and restore the matter to the file of the Ld. CIT(E) for fresh adjudication.
4 6.2 The Ld. CIT(E) is directed to examine all issues raised by the assessee, including but not limited to the question of limitation, deemed approval, and compliance with statutory requirements under Section 80G(5) of the Act. The Ld. CIT(E) shall pass a reasoned and speaking order after granting due and adequate opportunity of hearing to the assessee.
6.3 We clarify that we have not expressed any opinion on the merits of the case, and all issues are left open for adjudication before the Ld. CIT(E).
6.4 In the result, the appeal of the assessee is allowed for statistical purposes.
Both the parties fairly submitted that the facts and circumstances of other appeal i.e are exactly identical to the Appeal in and similar contentions raised therein may be considered, therefore, our findings and directions given in shall apply mutatis mutandis to other appeal also which are accordingly allowed for statistical purposes.