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Facts
The assessee trust's application for registration under section 12AB of the Income-tax Act was rejected by the CIT(E) due to incomplete documentation and non-furnishing of required details, particularly concerning expenditure on properties. The assessee failed to respond adequately to multiple notices and a reminder.
Held
The Tribunal observed that the rejection was based solely on non-compliance. Adhering to principles of natural justice, the assessee was granted one more opportunity to submit the required information. The impugned order was set aside, and the matter was remanded to the CIT(E) for fresh consideration.
Key Issues
Whether the rejection of the registration application due to non-compliance was justified, and if the assessee should be granted a further opportunity to furnish details.
Sections Cited
12AB, 12A(1)(ac)
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Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI PRABHASH SHANKAR
PER PRABHASH SHANKAR [A.Μ.] :- 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”]. Page 2 Council of All Khoja Shia Ishna Shehri Jamats The grounds of appeal are as under:
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.
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.
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 Page 3 Council of All Khoja Shia Ishna Shehri Jamats 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.
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.
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.
In the result, the appeal is allowed for statistical purposes. Order pronounced in the open court on 18/02/2026. NARENDER KUMAR CHOUDHRY (न्यायिक सदस्य /JUDICIAL MEMBER) Place: मुंबई/Mumbai दिनांक / Date 18.02.2026 Lubhna Shaikh / Steno PRABHASH SHANKAR (लेखाकार सदस्य/ACCOUNTANT MEMBER) आदेश की प्रतिलिपि अग्रेषित/Copy of the Order forwarded to : 1. 2. 3. 4. 5. अपीलार्थी / The Appellant प्रत्यर्थी / The Respondent. आयकर आयुक्त / CIT विभागीय प्रतिनिधि, आयकर अपीलीय अधिकरण DR, ITAT, Mumbai गार्ड फाईल / Guard file. त्यापित प्रति //// आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.