MADRASA BAGHE RASOOL TRUST,MUMBAI vs. CIT (EXEMPTION), MUMBAI

Date of Hearing – 13/06/2024 Date of Order – 25/07/2024

O R D E R PER SANDEEP SINGH KARHAIL, J.M.

The present appeal has been filed by the assessee challenging the impugned order dated 11/03/2024 passed in Form No. 10AD by the learned Commissioner of Income Tax (Exemptions), Mumbai, [“learned CIT(E)”], rejecting the application for registration filed by the assessee under section 12AB of the Income Tax Act, 1961 (“the Act”), for the assessment year 2024-25.

“1. On the facts and in law, the learned Commissioner of Income Tax Exemption, Mumbai [Herein referred as „CIT (E)‟] erred in rejecting application for registration under Section 12AB of the in erroneous manner.

2. On the facts and in circumstances in law, the learned CIT (E) erred in rejecting the application for grant of registration under Section 12AB, without considering the merit of application as stipulated under Section 12AB(1)(b)(i) of the Act.

3. On the facts and in law, the learned CIT (E) erred by rejecting the application for grant of registration on technical ground i.e., mismatch in Form 10AB whereas for Section 12AB(1)(b)(i) requires CIT (E) to satisfy himself about i) Genuineness of activity of trust and ii) Compliance of other laws, the learned CIT(A) ought to have restricted himself to requirement of law.

4. On the facts and in law, the learned CIT (E) ought to have appreciated that the Appellant Trust is fulfilling all the criteria for grant registration as specified in Section 12AB(1)(b) of the Act. The learned CIT (E) has grossly erred in denying registration to the Appellant Trust when all the conditions required for grant of registration under Section 12AB are duly fulfilled.

6. On the facts and in law, the learned CIT (E) erred in passing the impugned order in gross violation of Procedure laid down in Section 12AB(1)(b)(ii) of the Act. Therefore, the impugned order is bad in law.

Madrasa Baghe Rasool Trust Act vide order dated 10/03/2022 passed in Form No. 10AC. Subsequently, the assessee filed the application in Form No. 10AB seeking registration under section 12AB of the Act. Vide impugned order dated 11/03/2024 passed in Form No. 10AD, the learned CIT(E) rejected the application for registration under section 12AB of the Act on the basis that in the Form No. 10A, i.e. application for Provisional Registration, in the “nature of activities” column the trust has mentioned activities as “religious”, however in Form No. 10AB for seeking registration under section 12AB of the Act, in the “nature of activities” column the trust has mentioned activities as “religious cum charitable”. Thus, it was held that there is mismatch in Form No. 10A and Form No. 10AB, which contains false or incorrect information as per the Explanation to section 12A(1)(ac) of the Act.

5. In view of the facts and circumstances as noted in the foregoing paragraph, we are of the considered view that the learned CIT(E) has erred in rejecting the assessee’s application for registration under section 12AB of the Act on a mere technical basis, and for such an objection the assessee should have at least been put to notice. Accordingly, we deem it appropriate to restore the application filed by the assessee for seeking registration under section 12AB of the Act to the file of the learned CIT(E) for de novo adjudication as per law, after providing reasonable and adequate opportunity of being heard to the assessee. We direct the assessee to furnish all the information as may be sought by the learned CIT(E) in this regard. With the above directions, the impugned order passed in Form No. 10AD is set aside, and the grounds raised by the assessee are allowed for statistical purposes.