COUNCIL OF ALL KHOJA SHIA ISHNA SHEHRI JAMATS,MUMBAI vs. CIT (EXEMPTION), MUMBAI

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ITA 7250/MUM/2025Status: DisposedITAT Mumbai18 February 20264 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the application for registration was rejected by the authority solely on the grounds of incomplete compliance. Observing that the principles of natural justice and fair play dictate that the assessee deserves another opportunity, the Tribunal set aside the impugned order. The matter was remanded back to the CIT(E) for fresh consideration, with the direction to provide the assessee with a necessary opportunity of hearing. The assessee was also directed to make necessary compliance without fail. The Tribunal explicitly stated that the appeal is allowed for statistical purposes. No issue was expressly left undecided.

What were the facts?

The assessee, Council of All Khoja Shia Ishna Shehri Jamats, filed an appeal against the order passed by the Commissioner of Income-tax (Exemption), Mumbai (CIT(E)), rejecting its application for registration under Section 12AB of the Income-tax Act, 1961. The CIT(E) rejected the application due to non-compliance with notices seeking additional details regarding expenditure on properties, financial statements, and proof of expenses for the financial year 2022-23. Despite multiple notices and a reminder, the assessee failed to furnish the requisite information, instead providing ledger details for the financial year 2021-22. The CIT(E) concluded that the assessee failed to establish the genuineness and bona fide nature of its activities.

What were the issues?

1. Whether the Learned CIT(E) erred in law and on facts by rejecting the registration under Section 12A(1)(ac) of the Act. The assessee's contention is that the Learned CIT(E) has erred in rejecting the registration. The revenue's contention is not recorded. 2. Whether the Learned CIT(E) erred in law and on facts by passing the order under Section 12AB of the Act in gross violation of the principle of natural justice. The assessee's contention is that the order was passed in violation of natural justice. The revenue's contention is not recorded. The core issue revolves around the completeness of documentation and compliance by the assessee in its application for registration, and whether the rejection by the CIT(E) was justified and in accordance with principles of natural justice.

Which sections of the Income-tax Act were involved?

Section 12AB,Section 12A(1)(ac)

AI-generated summary — verify with the full judgment below

Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI PRABHASH SHANKAR

For Appellant: Shri Mohit Balani,AR, (virtually present)
For Respondent: Shri R A Dhyani,(CIT DR)
Hearing: 14.01.2026Pronounced: 18.02.2026

PER PRABHASH SHANKAR [A.M.] :-

The present appeal is filed by the assessee Trust against the order passed by the Learned Commissioner of Income-tax (Exemptions), Mumbai [hereinafter referred to as “CIT(E)”] pertaining to the order passed u/s. 12AB of the Income-tax Act, 1961 [hereinafter referred to as “Act”.

2.

The grounds of appeal are as under:

1.

Learned CIT(E) has erred in law and on the facts of the case in passing the impugned order, rejecting the registration u/s 12A(1)(ac) of the Act.

2.

Learned CIT(E) has erred in law and on the facts of the case in passing the order u/s 12AB of the Act in gross violation of principle of natural justice.

3.

Briefly stated facts of the case are that on verification of the application in Form 10AB filed by the applicant, it was found by the ld.CIT(E) that the application was not complete and all the documents required to be accompanying the application were not furnished. Hence, a notice was issued to the applicant which made submission from which it was noticed that as per the Income & Expenditure account for F.Y. 2022-23, the applicant trust had incurred expenditure of Rs. 23.41 lakh towards expenditure on properties out of total expenditure of Rs.23.47 lakh incurred for the year. It is noted that only Rs.6,487/- had been incurred other than expenditure on properties.Accordingly,another notice was issued to the applicant to furnish some additional details like details of expenditure on properties, financial statement statements for A.Y. 2022-23 to A.Y. 2025-26, proof of expenses, bank statement etc. However, no reply or response was submitted by it. Accordingly, a reminder was also issued to the applicant which filed certain details

24.09.

2025. However, it was observed that the applicant had not furnished the requisite details of expenditure on properties incurred in F.Y. 2022-23, instead the applicant has furnished the Ledger for various expenses incurred in F.Y. 2021-22. Further, the applicant was also requested to furnish proof of expenses like payment receipt, details of recipient, acknowledgement etc, instead the applicant had furnished copy of expenditure ledger. He therefore, concluded that the applicant had failed to furnish the requisite details and documents, which were essential for verifying the genuineness and bona fide nature of the trust’s activities and resultantly, the application for grant of registration stands

rejected on the grounds of non-compliance.

4.

Before us, the ld.AR has requested to remand the entire issue back to the ld.CIT(E) with an assurance that the assessee would ensure submission of all requisitions of the CIT and cooperate in the proceedings. The ld.CIT(DR) did not raise any objection to this request.

5.

As is apparent from the above discussion that the application for registration was rejected by the authority concerned only on account of lack of complete compliance.We are also of the viewthat following the principles of natural justice and fairplay, the assessee deserves one more opportunity in this regard. Thus, we set aside the impugned orderand send back the entire matter for fresh consideration of the ld.CIT(E) to decide the matter after allowing necessary opportunity of hearing to the assessee Trust. Needless to state ,the assessee would make necessary

compliance without fail.

6.

In the result, the appeal is allowed for statistical

purposes. Order pronounced in the open court on 18/02/2026. NARENDER KUMAR CHOUDHRY PRABHASH SHANKAR (anf weer / JUDICIAL MEMBER) (AHI AERT/ACCOUNTANT MEMBER)

Place: Has/Mumbai

feats /Date 18.02.2026 Lubhna Shaikh / Steno

aTeRT ot vrata omy ‘Copy of the Order forwarded to: tert / The Appellant

2 verelf The Respondent. 3 HIPL SaQaT / car 4 fgurita ufarre, saree acitcita atftepzt pr, rar,

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/ BY ORDER,

SO /ASTTS THB (dy. /Asstt. Registrar) Tree aches aif cra, Bench,

Mumbai.

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