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Facts
The assessee, Vijayawada Association of Genito Urinary Surgeons, filed an e-application for registration under Section 12AB of the Income Tax Act. The CIT(E) issued notices for information and the Memorandum/Trust Deed. After the assessee's partial response, the CIT(E) rejected the application, observing that the assessee's activities were not commensurate with its stated charitable objectives.
Held
The Tribunal found that the CIT(E)'s rejection order was casual, non-speaking, and lacked specific reasons for deeming the activities not charitable. It set aside the impugned order and remitted the matter back to the CIT(E) to provide another opportunity to the assessee to submit documents and to pass a speaking order deciding the case on merits.
Key Issues
Whether the CIT(E) can reject an application for registration under Section 12AB without passing a speaking order that provides detailed reasons for finding the assessee's activities inconsistent with its charitable objectives.
Sections Cited
12AB, 12A(1)(ac)(iii)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, VISAKHAPATNAM “DIVISION” BENCH, VISAKHAPATNAM
Before: SHRI DUVVURU RL REDDY, HON’BLE & SHRI S BALAKRISHNAN, HON’BLE
आदेश /O R D E R
PER SHRI S BALAKRISHNAN, ACCOUNTANT MEMBER:
This appeal is filed by the assessee against rejection order of Learned Commissioner of Income Tax (Exemption), Hyderabad [hereinafter in short “Ld.CIT(E)”] vide DIN & Notice No. ITBA/EXM/F/EXM45/2024- 25/107343271(1) dated 13.02.2025 seeking registration under section 12AB of the Income Tax Act, 1961 (in short ‘Act’).
I.T.A.No.199/VIZ/2025 Vijayawada Association of Genito Urinary Surgeons 2. Briefly stated facts of the case are that the assessee has filed an e-application in Form No.10AB seeking registration under section 12AB of the Act. The Ld.CIT(E) issued notices to the assessee in respect of proceedings under section 12A(1)(ac)(iii) of the Act to produce the copy of Memorandum of Association/Trust Deed for verification and to furnish a detailed reply on the specific information called for in the said notice. In response, assessee has submitted some of the details as called for. Subsequently, another notice dated 24.12.2024 was issued to the assessee to submit the full information as per the notices issued. In response, assessee furnished its reply in compliance to the notice issued by the Ld.CIT(E). On a perusal of the submissions of the assessee, Ld.CIT(E) rejected the application filed in Form-10AB for registration under section 12AB of the Act.
Aggrieved by the rejection order, assessee filed an appeal before us and raised following grounds in its appeal: -. “1) The order passed by the Commissioner of Income Tax (Exemptions) vide Form 10AD dt. 13.02.2025, regarding rejection of permeant registration u/s 12AB, is bad in law and contrary to the facts and circumstances of the case. 2) The learned CIT (Exemptions) erred in rejecting the claim for registration u/s 12AB of the IT Act in a summary and casual manner without substantiating the reasons for such refusal. 3) In any case, the learned CIT (Exemptions) ought not to have rejected the claim for registration u/s 12AB without cogent and detailed reasons, especially when the trust's activities align with charitable objectives as outlined under the Act. 4) For these and other reasons that may be urged at the time of hearing, the appellant prays that the impugned order dt. 13.02.2025 be set aside in the interest of justice, and direct the CIT(E) to grant permanent registration u/s 12AB of the Income Tax Act.” Page. No 2
I.T.A.No.199/VIZ/2025 Vijayawada Association of Genito Urinary Surgeons 4. The only issue contested by the assessee is with respect to rejection of the Registration under section 12AB of the Act by the Ld.CIT(E).
At the outset, Ld. Authorized Representative (hereinafter in short “Ld.AR”] submitted that Ld. CIT(E) has not passed a speaking order for the denial of registration to the assessee. He further submitted that various documentary evidences have been provided before Ld. CIT(E) but he has casually observed the activities are not commensurate with the activities as per objectives of the registered Deed. He therefore pleaded that one more opportunity may be provided to the assessee to submit its reply with documentary evidences once again to the Ld.CIT(E).
On the other hand, Ld. Departmental Representative [hereinafter in short “Ld. DR”] heavily relied on the order of the Ld. CIT(E).
We have heard both the sides and perused the material available on record. The assessee responded to the notices issued by the Ld.CIT(E) but it is observed from the order of the Ld.CIT(E) that the assessee has partly responded. We find that Ld. CIT(E) while rejecting the application in Form10AB for the purpose of Registration of the society under section 12AB of the Act has observed as follows: -
“3. On perusal of the submissions made by the assessee, it is observed that activities are not commensurate with the activities as per objectives of the registered Deed/MOA/AOA, which is not as per the provisions of the Page. No 3
I.T.A.No.199/VIZ/2025 Vijayawada Association of Genito Urinary Surgeons section 12AB of the IT Act. 1961. In view of the above, the present application in form 10AB for registration u/s 12AB is herewith rejected.”
On a perusal of the Ld. CIT(E) order, we find that he has not discussed anything except stating that the activities are not commensurate with the activities as per objectives of the registered Deed/MOA/AOA. Ld. CIT(A) has not specified how the assessee’s activities cannot be deciphered as charitable in nature. Ld.CIT(E) has simply rejected the assessee’s application which, in our considered opinion is not correct. Therefore, in the interest of natural justice, we find it appropriate to grant another one more opportunity to the assessee to submit the relevant documents including the evidences as detailed in the notices. Accordingly, we grant one more opportunity to the assessee and thereby set-aside the impugned order and restore the matter back to the file of Ld.CIT(E) with a direction to provide one more opportunity to the assessee to furnish required details and to decide the case on merits by passing a speaking order. Assessee is also directed to fully cooperate and furnish necessary documents / information as required by the Ld.CIT(E).
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 28th August, 2025.