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Facts
The assessee, a non-profit company, applied for regular registration under Section 12A r.w.s. 12AB(1)(b) of the Act. The CIT(Exemption) rejected the application because the company's Memorandum of Association contained a broad object clause allowing activities not specifically laid down, which was deemed to conflict with Section 12AB(4). Consequently, the provisional registration previously granted was also cancelled.
Held
The Tribunal, considering the principles of justice and fair play, decided to remand the case back to the file of the CIT(Exemption). The CIT(Exemption) is directed to re-examine the issue afresh, providing the assessee with a reasonable opportunity of being heard and to submit supported documents to clarify its object clause. The appeal is allowed for statistical purposes.
Key Issues
Rejection of regular registration and cancellation of provisional registration under Section 12A due to a broad object clause in the Memorandum of Association.
Sections Cited
Section 12A, Section 12AB(1)(b), Section 12AB(4), Section 12A(1)(ac)(vi), Form 10AB, Form 10AC
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Income Tax Appellate Tribunal, “RANCHI BENCH”, RANCHI
Before: SHRI SONJOY SARMA, JM & SHRI RATNESH NANDAN SAHAY, AM
(�नधा�रण वष� / Assessment Year :2023-2024) Aviraldhaani Foundation, Vs. CIT(Exemption), Patna S/o Satyendra Narayan Singh, 241 DAB, Polytechnic S.O. Bishnupur, Jharkhand-828130 �थायी लेखा सं./PAN No. :AAVCA 9397 C (अपीलाथ� /Appellant) .. (��यथ� / Respondent) िनधा�रती की ओर से /Assessee by : None : Shri Kumar Pranab, CIT-DR राज�व क� ओर से /Revenue by सुनवाई क� तार�ख / Date of Hearing : 03/09/2025 घोषणा क� तार�ख/Date of Pronouncement : 08/09/2025 आदेश / O R D E R
Per Sonjoy Sarma, JM :
The above captioned appeal is filed by the assessee against the order dated 30.03.2024, passed by the ld. CIT(Exemption), Patna for the assessment year 2023-2024.
Brief facts of the case are that the assessee is a non-profit company and filed application in Form 10AB before the ld. CIT(E) for granting regular registration under sub-clause (iii) of clause (ac) of sub-section (1) of Section 12A r.w.s.12AB(1)(b) of the Act. On the examination of the submission filed by the assessee, the ld.CIT(E) calling for explanation from the assessee. In response to the same, the submitted reply before the ld.CIT(E), however, after considering the submission of the assessee the ld. CIT(E) found that the main object clause stated in the memorandum of association authorizes the assessee company to undertake any other activities which have not been laid down under the terms of Memorandum of Association of the company. The clause gives unfettered power having widest sweep as to the selection of the other objects by the company in addition to the objects already provided in the constituent document. This power has overreaching effects which make redundant the provisions of section 12AB(4) which stipulates that a registered entity is bound to undertake activities in accordance with the objects for which it had been registered. To have conformity with the provisions of the Act particularity of objects is a mandatory requirement. Accordingly, the application in Form 10AB for grant of registration under sub-clause (iii) of clause (ac) of sub-section (1) of Section 12A r.w.s.12AB(1)(b) of the Act was rejected and doing so the ld. CIT(E) also rejected the provisional registration already granted u/s.12A(1)(ac)(vi) of the Act in form 10AC dated 18.10.2022 for the assessment year 2023-2024 to 2025-2026.
Aggrieved by the above order, the assessee is in appeal before the Tribunal raising various grounds, however, the primary ground is relating to rejection of application for grant of regular registration as well as rejection of provisions registration granted to the assessee.
At the time of hearing, no one turned up before this Bench only an adjournment application has been filed by the assessee for deferment of hearing to some other date. On this contention made by the ld. AR for seeking adjournment, ld.CIT-DR objected to the prayer made by the assessee stating that the present issue was rightly dismissed by the ld. CIT(E) since the assessee could not put forward any supported document to controvert the facts before the ld. CIT(E), therefore, application for regular registration was also rejected on this ground. Therefore, at this stage, such appeal of the assessee deserves to be dismissed in limine since the assessee has not furnished any supported documents to controvert the facts as given by the ld. CIT(E) in his order.
We after hearing the rival submissions of the parties and perusing the material available on record, find that in the present case the assessee is a non-profit company registered under the appropriate provisions of Act and seeking to avail the benefit of regular registration under sub-clause (iii) of clause (ac) of sub-section (1) of Section 12A r.w.s.12AB(1)(b) of the Act. In this connection the assessee has submitted certain documents for getting the benefit under the provisions of law but certain queries were made by the ld.CIT(E) relating to the objective clause of the company but assessee could not put forward any supported documents to omit the queries made by the ld. CIT(E). Therefore, the regular application for registration was rejected as well as the provisional registration granted earlier to the assessee was also cancelled. Therefore, in the interest of justice and fair play, we feel it justified to remand the matter back to the file of the ld. CIT(E) with a direction to re-examine the issue afresh after giving reasonable opportunity of being heard to the assessee and to decide the appeal on merits of the case. The assessee is directed to submit the supported documents before the ld.CIT(E) and omit the queries made by the ld.CIT(E) in order to getting the benefit of exemption to avail regular registration under the provisions of the Act. Accordingly, the instant issue is set aside to the file of ld.CIT(E) with a direction to re-examine the issue after affording reasonable opportunity of being heard to the assessee. Accordingly, appeal of the assessee is allowed for statistical purposes.
In terms of the above, appeal of the assessee is allowed for statistical purposes. Order pronounced on 08/09/2025.