Loading judgment…
Facts
The assessee applied for renewal of registration under Section 12A(1)(ac)(ii) of the Income Tax Act. The CIT(E) issued notices requesting details and documents to verify the genuineness of the trust's activities, but the assessee failed to comply within the statutory time limit, despite an extension request. Consequently, the CIT(E) rejected the application for renewal of registration.
Held
The Tribunal imposed a cost of Rs. 10,000/- on the assessee to be deposited to the Prime Minister National Relief Fund due to the delay and lack of reasonable explanation for non-furnishing documents. Subject to the payment of this cost, the CIT(E) was directed to grant the assessee one more opportunity to submit the required details and documents, and then reconsider the application for renewal of registration as per law.
Key Issues
Rejection of the application for renewal of registration under Section 12A due to the assessee's failure to furnish required documents within the prescribed time limit.
Sections Cited
Section 12A(1)(ac)(ii), Section 12AA, Rule 17A(2)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH, AHMEDABAD
Before: MS SUCHITRA KAMBLE & SHRI NARENDRA PRASAD SINHA
PER NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER:
This appeal is filed by the assessee against the order of Commissioner of Income Tax (Exemption) [in short “CIT(E)”], dated 31.12.2025 in the proceeding u/s 12A(1)(ac)(ii) of the Income Tax Act.
The brief facts of the case are that the assessee had filed an application in Form No. 10AB on 26.06.2025 for renewal of registration u/s. 12A(1)(ac)(ii) of the Act. The Ld. CIT(E) had required the assessee to furnish certain details/documents vide notices dated 07.10.2025 and 17.10.2025, which was not complied. In the absence of required documents the Ld. CIT(E) was not satisfied about the genuineness of the Digvijay Lions Foundation Vs. CIT(E) 2 activities of the Trust and, therefore, the application for renewal of registration was rejected vide the impugned order.
Now the assessee is in appeal before us. The following grounds have been taken in this appeal.
1 The CIT (Exemption) erred in rejecting Form 10AB despite complete compliance with Rule 17A(2) 2. The order was passed in violation of natural justice, ignoring the extension request dated 24.12. 2025 and replies filed on 01.01.2026 and 02.01.2026 3. The CIT wrongly held that only FY 2023-24 accounts were submitted, ignoring audited accounts for FY 2021-22 to 2024-25 4. The CIT failed to appreciate detailed notes, photographs, donor lists, and expenditure ledgers evidencing genuine charitable activities 5. The rejection was based on mechanical reliance on CBDT Circular 01/2024, without specific adverse findings against the appellant 6. The order is contrary to binding precedents of the Supreme Court and Gujarat High Court, which mandate fair consideration of evidence and prohibit rejection on suspicion or technicalities.
The rejection order is arbitrary, passed in undue haste, and liable to be set aside.
Shri Shreekant Shah, the Ld. AR of the assessee submitted that the assessee had made a request vide letter dated 24.12.2025 for allowing further time to submit the required documents. Further that a reply was also filed by the assessee on 02.01.2026, which was not considered by the Ld. CIT(E). The Ld. AR submitted that the rejection order of the Ld. CIT(E) was arbitrary, passed in undue haste and liable to be set aside.
Digvijay Lions Foundation Vs. CIT(E) 3 5. Per contra, Shri Alpesh Parmar, the Ld. CIT-DR, supported the order of Ld. CIT(E).
We have considered the submissions of the assessee. The assessee had filed application u/s. 12A(1)(ac)(ii) of the Act, on 26.06.2025 for renewal of registration. As per provision of section 12AA of the Act, the CIT(E) is empowered to call for such documents or information as he thought necessary to satisfy himself about the genuineness of activities of the trust and to ensure compliance of requirements of any other law. The CIT(E) is also empowered to make such enquiries as he deemed necessary in this regard. Accordingly, the Ld. CIT(E) had called for certain details and documents from the assessee vide notices dated 07.10.2025 and 17.12.2025. There was no compliance to the notices and details and documents as required were not furnished. The assessee vide letter dated 24.12.2025 had requested for 10 days’ time to furnish the required documents. As per provision of section 12AA(2) of the Act, the CIT(E) was required to pass the order granting or refusing registration within a period of six months from the end of the month in which the application was received. Since the application was filed by the assessee on 26.06.2025, the CIT(E) had time till 31.12.2025 to pass the final order in this regard. The assessee was aware of this fact, still time of 10 days was sought on 24.12.2005, which was beyond the limitation period. No details and documents were filed by the assessee within the time limit as available to the CIT(E) to pass the order. In fact, the Ld. CIT(E) had waited till the last date, still no documents were provided by the assessee. Therefore, the order of the Ld. CIT(E) rejecting the application of the assessee, cannot be faulted.
Digvijay Lions Foundation Vs. CIT(E) 4 7. The assessee had filed certain documents vide letter dated 02.01.2026, which could not be considered by the Ld. CIT(E). The assessee has not given any reasonable explanation for non-furnishing those documents before the limitation date for passing the order. The documents were in the possession of the assessee itself and no third party information was called for. We, therefore, deem it proper to impose a cost of Rs.10,000/- on the assessee which should be deposited to the Prime Minister National Relief Fund within a period of 15 days from the date of receipt of this order. Subject to the payment of cost, the Ld. CIT(E) is directed to allow one more opportunity to the assessee to file the details and documents as required. The assessee is free to resubmit the documents filed on 02.01.2026 or any other details/documents as deemed necessary. Thereafter, the Ld. CIT(E) should consider the application of the assessee for renewal of registration u/s. 12A(1)(ac)(ii) of the Act, as per law.
In the result, the appeal of the assessee is allowed for statistical purpose.
Order pronounced in the Court on 25/02/2026 at Ahmedabad.