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Facts
The assessee, XLRI Alumuni Association, applied for regular registration under Section 12A of the Income-tax Act, 1961, following a provisional registration. The CIT (Exemption) rejected the application, observing that the institution's constitution was inconsistent with charitable purposes under Sections 11 and 2(15) of the Act, and subsequently cancelled the provisional registration.
Held
The Tribunal found that the CIT (Exemption) summarily rejected the application without adequately examining the genuineness of the activities or affording proper opportunity of being heard. Consequently, the Tribunal remanded the matter back to the CIT (Exemption) for fresh adjudication, directing a reasoned order after giving the assessee adequate opportunity.
Key Issues
Whether the CIT (Exemption) was justified in rejecting the application for regular registration under Section 12A and cancelling provisional registration without proper examination or affording an adequate opportunity of being heard.
Sections Cited
Section 12A, Section 12A(1)(ac)(iii), Section 12A(1)(ac)(vi), Section 12AB, Section 12AB(1)(b), Section 11, Section 2(15)
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Income Tax Appellate Tribunal, BENCH-RANCHI
order
: October 27, 2025 ORDER
Per Sonjoy Sarma, Judicial Member:
This appeal by the assessee is directed against the order of the CIT(Exemption), Patna [“CIT(Exemption)”] dated 25.05.2024 rejecting the application in Form 10AB for registration u/s 12A of the Income-tax Act, 1961 (the “Act”).
Brief Facts of the Case are that the assessee filed an application in Form No. 10AB seeking regular registration under clause (iii) of sub- section (1)(ac) of Section 12A, read with Section 12AB(1)(b) of the Act. The said application was filed for continuation of registration previously granted under Section 12A(1)(ac)(vi), vide Form 10AC dated 23.09.2021, for the assessment years 2022–23 to 2024–25.
During the course of proceedings under Section 12AB, the learned CIT (Exemption) examined the objects and genuineness of the activities of the applicant institution, and to verify compliance with statutory requirements, called upon the assessee to furnish the following details: Note on activities undertaken during financial years 2020–21, 2021–22, XLRI Alumuni Association and 2022–23, Copies of annual accounts for the said periods andBank statements of the institution. In response, the assessee submitted a written reply along with certain supporting documents. However, upon verification, the learned CIT (Exemption) observed that the constitution of the applicant institution contained certain clauses and provisions that were inconsistent with the conditions prescribed under the Act. He concluded that the institution could not be considered as established wholly for charitable purposes within the meaning of Sections 11 and 2(15) of the Act. Accordingly, the application filed in Form 10AB for grant of regular registration was rejected, and the provisional registration earlier granted under Section 12A(1)(ac)(vi) vide Form 10AC dated 23.09.2021 was cancelled.
Aggrieved by the order of the learned CIT (Exemption), the assessee has preferred the present appeal before the Tribunal, raising various grounds. The primary contention of the assessee is that the learned CIT (Exemption) has rejected the application in a summary manner without affording proper opportunity of being heard and without appreciating the documents and explanations submitted by the assessee during the registration proceedings.
The learned Departmental Representative, on the other hand, did not raise any serious objection if the matter is restored to the file of the CIT (Exemption) for fresh consideration.
We have heard the rival submissions and perused the material available on record. It is evident that the CIT (Exemption) rejected the application without adequately examining the genuineness of activities and charitable nature of the institution in light of the documents submitted. It is also observed that the assessee could not properly explain certain issues during the proceedings before the CIT (Exemption), possibly due to lack of sufficient opportunity. In our considered opinion, in the interest of justice and fair play, it would be XLRI Alumuni Association appropriate to restore the matter to the file of the learned CIT (Exemption), Patna, for fresh adjudication of the application filed under Section 12A(1)(ac)(iii) read with Section 12AB(1)(b) of the Act. The CIT (Exemption) shall examine the documents, activities, and objects of the assessee institution afresh and pass a reasoned order in accordance with law after affording adequate opportunity of being heard to the assessee. The assessee is directed to extend full cooperation and to submit all necessary details and evidence in support of its claim during the proceedings before the CIT (Exemption).
In the result, the appeal of the assessee is allowed for statistical purposes, with a direction to the learned CIT (Exemption) to decide the issue afresh in accordance with law after providing due opportunity of hearing to the assessee. Kolkata, the 27th October, 2025.