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Facts
The assessee filed two appeals against orders of the CIT(E) rejecting their applications for registration under Section 12AB and approval under Section 80G of the Income Tax Act, 1961. The grounds for rejection were non-genuineness of activities and failure to provide necessary documents. There was also a delay in filing the appeals, which was subsequently condoned.
Held
The Tribunal held that the matter should be restored to the file of the CIT(E) for fresh adjudication. The assessee is to be given another opportunity to furnish the required balance details and documents to prove the genuineness of its activities. The CIT(E) will decide the application for registration in accordance with law.
Key Issues
Whether the CIT(E) was justified in rejecting the registration and approval applications without giving adequate opportunity to the assessee to furnish documents, and whether the matter should be remanded for fresh consideration.
Sections Cited
12AB, 80G, 12A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, JAIPUR BENCHES,”B” JAIPUR
ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM These are two appeals filed by the assessee against two different orders of the ld.CIT (Exemption), Jaipur dated 27-11-2024 & 28-11-2024 passed under section 12AB and 80G of the Income Tax Act, 1961 respectively. The grounds of appeal raised by the assessee in both the appeals are as under:-
1. On the facts and circumstances of the case and in law, Id. CIT(Exemption) has grossly erred in rejecting the final registration application filed u/s 12AB of the Income Tax Act, 1961. Such denial of registration is invalid in law and facts hence deserves to be quashed.
2. On the facts and circumstances of the case and in law, the Id. CIT(Exemption) has further erred in rejecting the registration application on the ground of Non- Genuineness of Activities. However, the activities of the trust are completely genuine and explainable. Therefore, the denial of registration on this basis is completely irrational, illogical and against the principle of natural justice, hence deserves to be rolled back.
3. On the facts and circumstances of the case and in law, the Id. CIT (Exemption) has further erred in cancelling the provisional registration earlier granted under section 12A of the Income Tax Act, 1961. Such cancellation being arbitrary in nature as well as unlawful hence deserves to be deleted.
1. On the facts and circumstances of the case and in law, Id. CIT(Exemption) has grossly erred in rejecting the final registration application filed u/s 80G of the Income Tax Act, 1961. Such denial of registration is invalid in law and facts hence deserves to be quashed.
2. On the facts and circumstances of the case and in law, the Id. CIT(Exemption) has further erred in cancelling the provision approval granted earlier under clause (iv) of first proviso to sub section (5) of section 80G of Income Tax Act, 1961. Such cancellation of the provisional approval being arbitrary in nature as well as unlawful, hence deserves to be deleted.
2.1 During the course of hearing, the Bench noticed that there are delay of 60 days in each appeals of the assessee i.e. 12AB and 80G of the Act, for which the Director of the Foundation filed an application for condonation of delay with following reasoning: - HELPING 23 WINGS FOUNDATION VS CIT (E), JAIPUR 1. The signed documents were timely prepared and dispatched by the foundation to the office of the authorized representative for further submission.
Unfortunately, the documents were misplaced during the transit period by our staff and could not reach the intended destination in time.
Although Form 36 was filed online within the prescribed time and the appeal fee was paid through challan on 23-01-2025, the physical documents essential for the completion of filing were not submitted due to the above mishap.
The lapse came to our notice during a routine compliance review and we immediately took corrective measures and filed the necessary documents. Hence, the delay was neither deliberate nor due to negligence but was caused by the circumstances beyond our control. We have taken due care to ensure that such a situation does not recur in the future and are committed to timely compliance with statutory requirements. In view of the facts mentioned above and in the interest of justice, we humbly request your Honour to condone the delay in filing the appeal and allow the same to be considered on merits. The affidavits affirming the facts is also filed with the application.’’ 2.2 On the other hand, the ld.DR did not controvert the facts stated in the application for condonation of delay. 2.3 We have heard both the parties and perused the materials available on record including the affidavit of assessee. The bench also noted that the assessee paid the appeal fees on 23.01.2025 and thereby the appeal was filed on 01.04.2025. In this case, the Bench in nutshell noted that there is sufficient cause in not timely filing the appeals of the assessee and there is merit in the application of the assessee. Thus the delay is condoned.
HELPING 23 WINGS FOUNDATION VS CIT (E), JAIPUR 2.1 Apropos to the ground so raised by the assessee in the ld. CIT(E) rejected the assessee’s claim of registration u/s 12AB of the Act by observing as under:- ‘’03The assessee has failed to furnish requisite details/documents/activities/evidences etc. in support of its claim in form No. 10AB. In view of above discussion assessee's claim of registration section 12AB is liable to be rejected and thus being rejected on following grounds:-
Not furnished evidence of Genuineness of Activities.
4. Further 12AB (1)(b)(ii)(B) of the Income Tax Act, 1961 also state that if CIT is not satisfied has to pass order rejecting such application and also cancelling its earlier registration. Thus, it is clarified that applicant's provisional registration under clause (vi) of clause (ac) of sub-section (1) of section 12A of the Income Tax Act. 1961 dated 10.11.2023 is also being cancelled. Further assessee has failed to give proper justification for regularization of provisional registration, thus with this order provisional registration is also cancelled.’’ 2.2 Apropos to the ground so raised by the assessee in the ld. CIT(E) rejected the assessee’s claim of exemption u/s 80G of the Act by observing as under:- ‘’02. Approval u/s 80G cannot be granted without registration u/s 12AB:- 2.1. As per rule 11AA of the Income Tax Rule, 1962, the registration u/s 12A/12AB or notification u/s 10(23C) is a precondition for granting approval u/s 80G of the I.T. Act, 1961. Vide this office order No. ITBA/EXM/F/EXM45/2024-25/1070669907(1) dated 27. 11.2024 the applicant Society/trust/Samiti has been denied registration u/s 12AB. Therefore, it is not eligible for exemption u/s 80G of the I.T Act, 1961 03. Further 2nd proviso to 80G(5) also state that if CIT is not satisfied has to pass order rejecting such application and also cancelling its earlier approval. Thus, it is clarified that applicant provisional approval under clause (iv) of first proviso to sub- section (5) of section 80G of the Income Tax Act, 1961 dated 10.11.2023 is also being cancelled. Further assessee has failed to give proper justification for 2.3 During the course of hearing, the ld. AR of the assessee submitted that most of the queries raised by the ld.CIT(E) were fulfilled but perhaps few documents could not be advanced/ submitted before the ld. CIT(E) for his perusal and consideration. Hence, the ld. AR of the assessee prayed before the Bench that the assessee may be given one more chance to adduce the desired documents before the ld. CIT(E) for his consideration as to the genuineness of the activities and thus restored the matter to the file of the ld. CIT(E) for afresh adjudication by providing one more opportunity of hearing. 2.4 On the other hand, the ld. DR supported the orders of the ld. CIT(E) who passed the order after affording due opportunity to the assessee. 2.5 We have heard both the parties and perused the materials available on record. The bench noted that an application for registration u/s 12AB of the Act was rejected by the ld CIT(E) on the ground that the activities of the trust are not verifiable as the assessee failed to support the details of the activity by filling the necessary supporting documents and it could not be determined whether the applicant is genuinely carrying out charitable activity. Therefore, the applicant claim of registration u/s 12AB is also liable HELPING 23 WINGS FOUNDATION VS CIT (E), JAIPUR to be rejected on the ground of not proving its genuineness of the activity and non-compliance. However, the grievance of the assessee trust is that it was not provided additional time to furnish the balance details etc. in support of the audited accounts placed on record and thus the assessee trust was deprived off to contest the case before the ld. CIT(E). Hence, the assessee trust should be provided one more opportunity to advance the desired balance details before the ld. CIT(E) as the reasons advanced for rejection of the registration are curable in nature.Therefore, in these circumstances, we restore the matter back to the file of the ld. CIT(E) with the direction to give one more opportunity to file the balance details as desired by him and the assessee is also required to submit the documents relating to genuineness of the activities with a view to resolving the dispute in question in this set aside proceeding and accordingly the ld. CIT(Exemption) will decide the application for registration in accordance with law. 2.6 Since we have restored the appeal of the assessee with regard to the registration u/s 12AB of the Act to the file of the ld. CIT(E) for afresh adjudication, therefore, the outcome of appeal of the assessee u/s 80G of the Act is consequential in nature and the same be also decided based on the submission required in set aside proceeding.
HELPING 23 WINGS FOUNDATION VS CIT (E), JAIPUR 2.7 Before parting, we may make it clear that our decision to restore the matter back (supra) to the file of the ld. CIT(E) shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by the ld. CIT(E) independently in accordance with law.
3.0 In the result, both the appeals of the assessee are allowed for statistical purposes. Order pronounced in the open court on 21 /07/2025.