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Facts
The assessee, a trust, applied for registration under section 80G(5) of the Income Tax Act, which the CIT(E) dismissed due to unsatisfactory documentary evidence regarding the genuineness and commencement of charitable activities. The assessee contended that the CIT(E)'s decision was arbitrary, especially since the same authority had already granted approval under section 12AB of the Act.
Held
The Tribunal found that the CIT(E) had not provided adequate opportunity to the assessee to present its case, particularly after the assessee failed to comply with an initial notice. Citing principles of natural justice, the Tribunal set aside the CIT(E)'s order and restored the application for fresh consideration, directing the CIT(E) to provide the assessee with an adequate opportunity of being heard and to furnish requisite evidence.
Key Issues
Whether the CIT(E) was justified in dismissing the application for 80G(5) registration without providing adequate opportunity to the assessee to furnish evidence, especially given prior 12AB approval from the same authority.
Sections Cited
Section 80G(5), Section 12AB, Income Tax Act, 1961, Rule 17A of the Income Tax Rules, 1962
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Income Tax Appellate Tribunal, LUCKNOW BENCH “B”, LUCKNOW
Before: SHRI KUL BHARAT & SHRI ANADEE NATH MISSHRA
PER KUL BHARAT, VICE PRESIDENT.:
This appeal, by the assessee is directed against the order of the Learned Commissioner of Income-tax (Exemptions), Lucknow dated 28.11.2024 whereby the Ld. CIT(E) dismissed the assessee’s application for registration u/s 80G(5) of the Income Tax Act, 1961 (“Act’, for short). The assessee has raised the following grounds of appeal: -
1. That on facts and circumstances of the case, the order made by Ld Commissioner of Income Tax (Exemptions), Lucknow in Form 10AD dated 28.11.2024 is bad in law; That, on facts and circumstances of the case, Ld CIT(E) Lucknow erred in rejecting the application of the appellant made in Form 10AB seeking registration u/s 80G of the Income Tax Act, 1961.
2. That on facts and circumstances of the case, Ld CIT(E) acted arbitrarily and disproportionately in denying registration u/s 80G of the Income Tax Act, 1961 on 28.11.2024 without considering his own action (a few months earlier) of granting approval u/s 12AB of the Income Tax Act, 1961 on 27.06.2024 vide Order bearing DIN: ITBA/EXM/F/EXM44/2024-25/ 1066117370(1); Page 2 of 4 3. That on facts and circumstances of the case, Ld CIT(E), Lucknow failed to appreciate the documentary evidences filed by the appellant during the course of proceedings on 22.10.2024 & 221.11.2024. That, the Ld Commissioner of Income Tax (Exemptions), Lucknow erred in law and on facts by treating the documentary evidence filed as ‘no evidence’; that the Ld Commissioner had rejected the application without adequately considering the evidence and explanations provided by the trust.
4. Without prejudice to other grounds of appeal
, that on facts and circumstances of the case, when the appellant had existing registration u/s 80G dated 21.06.2010 and having filed fresh Form 10A on 26.06.2024 vide Ack No -506934230260624, the appellant is eligible for regular registration u/s 80G of the Income Tax Act, 1961 pursuant to extension granted by CBDT through Circular No 7/2024 (F.NO. 173/25/2024-ITA-I], DATED 25-4-2024;
5. That the appellant craves leave to add, to alter or to amend grounds of appeal before the appeal is heard and disposed off.”
2. The facts giving rise to the present appeal are that the assessee is a trust who had filed an application for registration u/s 80G(5) of the Act on 30.05.2024 along with Form No. 10AB under Rule 17A of the Income Tax Rules, 1962 (“the Rules”, for short). The said application was dismissed by the Ld. CIT(E) on the basis that he was not satisfied about the nature of activity being carried out by the assessee. Aggrieved against this, the assessee is in appeal before this Tribunal.
The Ld. Counsel for the assessee vehemently argued that the action of the Ld. CIT(E) is arbitrary and against the facts of the case. Ld. Counsel further reiterated the submissions as made in the written submissions. He further contended that the Ld. CIT(E) failed to consider the supporting evidences filed by the assessee. The Ld. Counsel contended that the Ld. CIT(E) was not justified in denying registration under section 80G of the Act, particularly when approval under section 12AB of the Act had already been granted by the same authority vide order dated 27.06.2024, and the material facts were not duly considered while passing the impugned order. Therefore, he prayed that the Page 3 of 4 order of the Ld. CIT(E) may be set aside and the Ld. CIT(E) be directed to grant registration u/s 80G(5) of the Act.
On the other hand, the Ld. CIT-DR opposed the submissions and supported the order of lower authorities and submitted that there is no infirmity in the order of the Ld. CIT(E).
We have heard rival submissions and perused the material available on record. It is found the Ld. CIT(E) rejected the appellant’s application seeking registration u/s 80G(5) of the Act on the ground that the assessee had failed to furnish the requisite documentary evidences which could enable him to satisfy himself regarding the genuineness as well as the commencement of the charitable activities by the assessee and to verify whether such activities were in consonance with the stated objects of the trust. It is further noted from the record that the Ld. CIT(E) provided two opportunities vide notice dated 19.11.2024 fixing the case for compliance on 25.11.2024 for furnishing the details called for. However, the assessee failed to comply with the said notice. Thereafter, no further opportunity was granted to the assessee before passing the impugned order. Considering the totality of the facts and in the interest of natural justice, we are of the considered view that the assessee should have been given an opportunity to represent its case. Therefore, the impugned order passed by the Ld. CIT(E) is set aside and the application for registration u/s 80G(5) of the Act is restored to the file of the Ld. CIT(E) for decision afresh, of course, after providing adequate opportunity of being heard to the assessee. The assessee would furnish requisite evidence in support of its claim regarding its activity. Grounds of appeal of the assessee are allowed for statistical purposes.
Order pronounced in the open Court on 24/02/2026.