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Facts
The assessee, a society incorporated in 1998, was granted provisional registration under Section 12A(1)(ac)(vi) of the Income Tax Act, 1961. They applied for regular registration under Section 12A(1)(ac)(ii) but failed to provide sufficient details and clarifications to the CIT(E) despite several opportunities. Consequently, the CIT(E) rejected their application and cancelled the provisional registration.
Held
The Tribunal noted that the assessee was not granted sufficient opportunity and that the appeal was decided ex parte due to non-submission of information. For the sake of complete justice, the Tribunal decided to provide one more opportunity to the assessee.
Key Issues
Whether the CIT(E) was justified in rejecting the assessee's application for regular registration and cancelling the provisional registration without granting sufficient opportunity to the assessee to furnish details.
Sections Cited
12A(1)(ac)(vi), 12A(1)(ac)(ii), 12AB(1)(b)(ii)(B), 2(15)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCHES ‘A’: NEW DELHI.
Before: SATBEER SINGH GODARA & SHRI S. RIFAUR RAHMAN
PER S. RIFAUR RAHMAN, ACCOUNTANT MEMBER :
This appeal is filed by the assessee against the order of ld. Commissioner of Income-tax (Exemption), Delhi (hereinafter referred to ‘ld. CIT (E)’) dated 30.05.2025.
None appeared on behalf of the assessee, we proceeded to hear the case with the assistance of Ld. DR 3. Brief facts of the case are, assessee society is incorporated on 02.01.1998 under Registrar of Societies, Government of NCT of New Delhi. Assessee was granted provisional registration vide letter dated 04.04.2022 u/s 12A(1)(ac)(vi) of the Income Tax Act 1961 (in short “Act”). Assessee has filed an application on 30.11.2024 in Form 10AB for regular registration u/s 12A(1)(ac)(ii) of the Act. The main objects of the assessee trust as per the Form 10AB are relief of poor, education, medical and it has also submitted its copy of trust deed along with the form.
4. During the proceedings, assessee was issued questionnaire dated 19.12.2024 with a direction to furnish relevant details/documents/clarifications in support of its claim of registration u/s 12A(1)(ac)(ii) of the Act. Several opportunities were given to the assessee to submit the relevant details as called for in various notices. Ld. CIT(E) has listed the various dates of opportunities granted to the assessee at para 3 of the order. Since assessee has failed to submit the relevant details and failed to specify genuineness of the charitable activities carried out by it, accordingly Ld. CIT(E) has rejected the content filed by the assessee and also rejected the ground for registration u/s 12A(1)(ac)(ii) of the Act. He also proceeded to cancel the Provisional Registration grant of order dated 04.04.2022.
5. Aggrieved with the above order assessee filed an appeal before us raising following grounds of appeal:-
1. Violation of Natural Justice & Faceless Appeal Rules The Society was not granted sufficient opportunity to file voluminous data, despite part compliance and a genuine need for extension. The hearings set on 23-04-25, 06-05-25, 16-05-25 were met with clear intent
2. Misapplication of Section 12AB(1)(b)(ii)(B) The AO erroneously concluded "genuineness" was lacking without any disproving evidence, despite admitted charitable work since 1998, engagement with beneficiaries, educational outreach, and medical relief programs.
Overreach in Cancellation of Provisional Registration Provisional registration is not to be cancelled lightly unless fraud/malafide activity is shown. Delays in submission cannot justify cancellation without full evaluation, especially given Society's longstanding activity record.
Arbitrary Demands & Exemptions Misinterpretation The AO treated funds received from government bodies (e.g., UP Water Supply & SC/ST schemes) as commercial or contract receipts disqualifying net receipts under Section 2(15). However, when applied to remain charitable, such receipts should not negate Section 12A/12AB eligibility.
Case Law Support Landmark judgments (e.g., Delhi High Court & ITAT rulings) confirm that charitable trusts should be allowed to explain and furnish documents; registration cannot be revoked without substantive evidence. [We will append photocopies and citations upon filing.]
At the time of hearing, both counsels agreed that it is ex parte order passed by the Ld. CIT(E) for the reason that assessee has not submitted the relevant information even though several opportunities were granted to the assessee for sake of complete justice, in our considered view the assessee should be provided one more opportunity of being heard.
In the result, we are inclined to remit this issue back to the file of Ld. CIT(E) with the direction to give an opportunity to the assessee to submit the relevant information as called to process the Registration u/s 12(i)(ac) of the Act.
We also direct the assessee to submit the relevant information and appeared before Ld. CIT(E) without taking any unnecessary adjournments. With the above direction we are inclined to remit the issue back to the file of Ld. CIT(E) to proceed with the verification of the application for grant of registration as per law.
In the result, appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on this day of 6th February, 2026.