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Facts
The assessee, a charitable trust, applied for final registration under Section 12AB of the Income Tax Act. The CIT(E) rejected the application, citing non-compliance with a query letter and lack of charitable activities.
Held
The Tribunal restored the case to the CIT(E) for fresh adjudication, finding that the assessee had a plausible reply and granting one opportunity was insufficient. The CIT(E) was directed to provide another opportunity.
Key Issues
Whether the rejection of the application for registration under Section 12AB was justified, and whether the assessee was given adequate opportunity to provide information.
Sections Cited
12AB, 80G(5), 2(15), 12A, 12AA
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, INDORE BENCH, INDORE
आदेश/ O R D E R
Per B.M. Biyani, A.M.:
This appeal relating filed by assessee against order bearing DIN: ITBA/EXM/F/EXM45/2024-25/1071534475(1) dated 24.12.2024 passed by learned Commissioner of Income-Tax (Exemption), Bhopal [“CIT(E)”] by which the assessee’s application for grant of final registration u/s 12AB of Income-tax Act, 1961 [“the act”] has been rejected. The assessee has raised the grounds as mentioned in Appeal Memos (Form No. 36).
We have heard learned Representatives of both sides and carefully perused the case record.
At first, we re-produce the impugned order passed by Ld. CIT(E):
“Annexure (mentioned in row-9 above) A query letter dated 17.10.2024 was issued to the assessee with request to furnish requisite clarification/information/documents on or before 04.10.2024. In response to the above notice, the assessee society submitted his reply along with some documents which have been perused and are placed on record. On perusal of clarification/ information/documents submitted by the assessee society, it is observed that the society is not undertaking any charitable activities. No specific expenditure is debited in the Income and Expenditure Account for charitable activities as mandated in the object of the society during the F.Y. 2020-21, 2021-22 & 2022-23. On perusal of Income & Expenditure Account, it is observed that expenses are being incurred only on administrative heads, however there is no expenditure on charitable activities. On perusal of By-laws of the society, it is found that there are 02 Nos, of objects for which the society has been established. Object No. 01 intends to provide financial support to the family of a deceased member which implies that the activities under object no. (1) is targeted towards the members of the society only and not towards the General Public. Thus, aforesaid object is not in line with the criteria defining charitable activities under section 2(15) of the Income Tax Act. Further, the assessee has failed to provide a note on charitable activities during last 3 financial years, certified copy of title deeds/Rent Agreement/NOC for the premises from where the activities are being carried out, list of present trustees/members of governing body with PAN and complete address along with their identity proof and bank account statement of all the Bank Accounts held by the society. In view of above facts and due to non-compliance of requisite questionnaire dated 17.10.2024 by the assessee society, the application of the assessee in Form 10AB for grant registration/ approval u/s 12AB & 80G(5) of 1.T. Act is hereby rejected and provisional registration/approval are also thereby cancelled.”
Thus, although the Ld. CIT(E) has passed a composite order rejecting assessee’s application for final registration/approval u/s 12AB & 80G(5) but the Ld. AR for assessee asserted in open court, in response to a specific query raised by bench, that the present appeal should be construed against rejection of application for registration u/s 12AB. Further in Form No. 36, the assessee has mentioned about registration u/s 12AB and in Grounds of Appeal also, the assessee is assailing the rejection of registration u/s 12AB.
Therefore, this appeal is treated qua non-grant of registration u/s 12AB.
On merit, Ld. AR filed following Written-Submission:
Ld. AR iterated the above submission orally and carried us to Pages 5 to 36 of Paper-Book referred in Point No. 3 & 4 of above Written-submission to demonstrate that the assessee filed a reply dated 17.10.2024 to CIT(E) alongwith all necessary documents. However, the Ld. CIT(E) has not considered the same and passed impugned order mentioning non- compliance to the questionnaire issued by him. Therefore, Ld. AR made a strong prayer that the impugned order passed by CIT(E) be quashed and the CIT(E) should be directed to grant permanent registration to assessee.
Replying to same, Ld. DR for revenue opposed the request of Ld. AR.
He referred the contents of very same reply-letter dated 17.10.2024 relied by Ld. AR, claimed to have been filed by assessee to CIT(E), and successfully demonstrated that the assessee has not filed any reply to the Q.No. 4, 12, 16 raised by CIT(E) in questionnaire. He submitted that the CIT(E) has also noted specific points in second and third para of impugned order for which the assessee did not furnish any information. Therefore, the assessee has made only part submission which were not sufficient for arriving at a satisfaction by CIT(E) for grant of registration. Therefore, the impugned order passed by CIT(E) rejecting registration to assessee is very much valid and justified.
We have considered rival submissions of both sides and carefully perused the impugned order as well as the documents held in Paper-Book filed. After a careful consideration, we find that the CIT(E) has given only one opportunity on 17.10.2024 to assessee. We further find that assessee
Page 5 of 7 has filed a reply dated 17.10.2024 with certain documents to CIT(E), copy of such reply is filed in Paper-Book and referred by learned Representatives of both sides in their respective pleadings. The reply filed by assessee is also acknowledged by CIT(E) in first sentence of second para of impugned order.
Thus, the assessee does not have non-compliant attitude. However, the CIT(E) has considered assessee’s reply as not giving complete information and therefore rejected assessee’s application. During hearing, Ld. AR for assessee agreed that the assessee is ready to make further submissions for the satisfaction of CIT(E). Therefore, in order to grant substantial justice to assessee, we restore this case at the level of CIT(E) for adjudication afresh. Needless to mention that the CIT(E) shall give necessary opportunity to assessee and the assessee shall avail those opportunities and that the CIT(E) shall pass order judiciously without being influenced by his earlier order in any manner.
Resultantly, this appeal is allowed for statistical purpose.
Order pronounced as per Rule 34 of ITAT Rules, 1963 by putting up on notice board on 23/12/2025