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Facts
The assessee, Rishbhanchal Charitable Trust, applied for final registration under Section 12AB and Section 80G(5) of the IT Act, after having obtained provisional approvals. The CIT (Exemptions) rejected these applications, stating the assessee failed to provide complete replies and documentary evidence for the genuineness and commencement of its charitable activities, subsequently initiating proceedings to cancel the provisional registrations.
Held
The Tribunal ruled that the CIT (Exemptions) had rejected the applications without granting the assessee a proper opportunity and without considering the details filed, thus violating natural justice. Consequently, the Tribunal set aside the CIT (Exemptions)'s orders and directed a de novo assessment with adequate opportunity provided to the assessee.
Key Issues
Whether the CIT (Exemptions) erred in rejecting the assessee's applications for final registration under Section 12AB and Section 80G(5) by denying reasonable opportunity and failing to consider submitted details, in violation of principles of natural justice.
Sections Cited
12AB, 80G(5), 2(15), 12A(1)(ac)(iii)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, LUCKNOW BENCH “A”, LUCKNOW
Before: SHRI ANADEE NATH MISSHRA & SHRI SUBHASH MALGURIA
These are appeals preferred by the assessee Trust against the action of the Ld. Commissioner of Income Tax (Exemptions), Lucknow dated 27.11.2024, wherein he was pleased to reject the applications filed by the assessee for registration u/s 12AB as well as u/s 80G(5)of the Income Tax Act, 1961 (hereinafter “the Act”). These appeals were heard together and are disposed off by this common order for the sake of convenience.
“1. That the Ld. CIT(Exemption) has erred in rejecting the registration u/s 12AB of the IT Act, 1961 of the appellant carrying charitable activities of running shelter and welfare for stray cows and also quarterly medical camps u/s 2(15) of the IT Act, 1961.
That the Ld. CIT(Exemption) has erred in not providing proper and adequate opportunity to the appellant for providing details before adversely rejecting the application for registration u/s 12A(1)(ac)(iii) of the IT Act, 1961 for the purpose charitable activities u/s 2(15) of the IT Act, 1961 in the interest of justice. & 44/LKW/2025 Page 2 of 4 3. That the Ld. CIT(Exemption) has erred in rejecting the application arbitrarily with pre-determined and prejudice mind which is bad-in-law as well on facts. 4. That the appellant craves leave to introduce, modify or withdraw any ground of appeal with your honours kind permission.”
3. The grounds of appeal of the assessee for are as under: -
1. That the Ld. CIT(Exemption) has erred in rejecting the registration u/s 80G(5)(iv) of the IT Act, 1961 of the appellant carrying charitable activities of running shelter and welfare for stray cows and also quarterly medical camps u/s 2(15) of the IT Act, 1961.
2. That the Ld. CIT(Exemption) has erred in not providing proper and adequate opportunity to the appellant for registration u/s 80G(5)(ii)(b)(b) of the IT Act, 1961 for the purpose charitable activities u/s 2(15) of the IT Act, 1961 in the interest of justice.
3. That the Ld. CIT(Exemption) has erred in rejecting the application arbitrarily with predetermined and prejudice and mind which is bad- in-law as well on facts.
That the appellant craves leave to introduce, modify or withdraw any ground of appeal
with your honours kind permission.”
4. The facts of the case, in brief, are that the assessee institution is enjoying exemption under section 12AB as well as 80G(5) of the Act. The assessee obtained provisional approval under section 12AB and 80G(5) of the Act by filing application in Form 10AB electronically and the necessary approval was also granted. The assessee society applied for final approval u/s 12AB as well as u/s 80G(5) of the Act by filing Form-10AB under Rule 17A of the Income Tax Rules, 1962 (“the Rules”, for short). The assessee was required to submit a note specifying the main area of charitable/religious activities and a projection/plan for the main charitable/religious activities to be undertaken. The learned CIT (Exemptions) held that the assessee had submitted only part reply and had failed to file documentary evidences to prove the genuineness and commencement of its charitable activities. Taking adverse view of this failure, the Ld. PCIT rejected the application for final approval and directed to start & 44/LKW/2025 Page 3 of 4 proceedings for cancellation of provisional registration granted u/s 12AB as well as u/s 80G(5) of the Act. Being aggrieved, the assessee is in appeal before the Income Tax Appellate Tribunal.
5. At the time of hearing, the learned Authorized Representative for the appellant assessee submitted that the learned CIT (Exemptions) rejected the applicant’s applications without providing reasonable opportunity. He further submitted that the required details were filed by the applicant; but the learned CIT (Exemptions) passed his impugned orders dated 27/11/2024 on the day filing rejecting the application without giving any consideration to the details filed by the applicant, and without even acknowledging the receipt of the details in his office, in his impugned orders. He submitted that the impugned orders of learned CIT (Exemptions) should be set aside with the direction to pass de novo orders after providing reasonable opportunity to the assessee and after giving due consideration to the submissions and details filed by the applicant. The learned Departmental Representative did not express any objection to the aforesaid submissions, and left the matter to the discretion of the Bench.
We have heard both sides. We have gone through the materials placed on record. The action of learned CIT (Exemptions) in rejecting the applications without providing reasonable opportunity to the applicant is against the rules of natural justice. Further, the learned CIT (Exemptions) did not give any consideration to details filed by the assessee on aforesaid date of 27/11/2024. Therefore, we set aside the impugned orders of learned CIT (Exemptions) with the direction to pass denovo orders on the above issues in accordance with law and after providing reasonable opportunity to the assessee.
& 44/LKW/2025 Page 4 of 4 In the result, the appeal of the assessee is partly allowed for statistical purposes.
Order pronounced in the open Court on 29/05/2025.