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Facts
The assessee, Janjati Chetna Samiti Fulchurtola, filed applications for registration under sections 12AA/12AB and approval under section 80G(5) of the Income Tax Act. Both applications were rejected by the CIT(E) because the assessee failed to respond to a second notice issued with only seven days' time, despite having responded to the first notice. The assessee sought another opportunity to present its case on merits.
Held
The tribunal found merit in the assessee's request for another opportunity, considering the short notice period for the second compliance. It restored both matters to the file of the CIT(E) to reconsider the applications afresh, directing the CIT(E) to provide a fair and reasonable opportunity to the assessee before passing any orders. Both appeals were allowed for statistical purposes.
Key Issues
Whether the rejection of applications for Trust registration under sections 12AA/12AB and fund approval under 80G(5) due to non-compliance with a short-notice request was justified, and if the assessee deserves another opportunity to present its case.
Sections Cited
Section 12AA, Section 12AB, Section 80G(5), Section 254(1)
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PER PAWAN SINGH, JUDICIAL MEMBER:
These two appeals by the assessee are directed against the separate orders ld. Commissioner of Income Tax (Exemption) [for short “CIT(E)”]. In application for registration of Trust under section 12AA/12AB of the Income Tax Act, 1961 (the Act). In the assessee has challenged rejection of application for approval of fund under section 80G(5) of the Act. Both the appeals are interconnected, therefore with the consent of both the parties, both the appeals were heard together.
Rival submissions of both the parties have been heard and record perused.
The ld. Authorised Representative (AR) of the assessee submits that assessee is a charitable Trust /Institution, filed application for registration of Trust under section 12AA/12AB on 26.12.2024. First notice of hearing was responded by assessee, however the assessee could not respond to second notice dated 04.04.2025, wherein only seven days’ time was allowed, resultantly the application of assessee was rejected. Once application under section 12AA/12AB was rejected another application for registration of fund under section 80G(5) was also rejected. The ld. A.R. submits that assessee is interested in pursuing the matter on merit and has good case on merits, if one more opportunity is allowed to the assessee.
He undertakes on behalf of the assessee to be more vigilant in making timely compliance.
On the other hand, ld. CIT–DR for revenue submits that assessee has not responded in response to notice issued by CIT(E), therefore the assessee is not eligible for any further relief. Both the appeals may be dismissed.
We have considered the rival submissions of both the parties and have gone through the orders of lower authority carefully. We find merit in the submission of ld. A.R. of the assessee that in response to first show–cause notice, the assessee vide reply dated 12.02.2024, sought time to file details. The assessee was again served second show cause notice dated 04.04.2025 to make compliance within in seven days. However, no compliance was made. Resultantly the application of assessee for registration under section 12AA/12AB was rejected. Considering the facts and circumstances of the case in our view the assessee deserves one more opportunity to explain its object and activities for seeking registration under section 12AB.s Therefore, matter is restored back to the file of CIT(E) to re–consider the application afresh. Needless to direct that before passing the order, the ld. CIT(E) shall allow fair and reasonable opportunity to the assessee. is allowed for statistical purposes.
We find that this appeal relates to registration of Trust under section 80G(5) for approval. Considering the fact that we have already restored the application of assessee for registration under section 12AB, therefore this application is also restored to the file of ld. CIT(E) to be considered after passing order in application under section 12AA/12AB of the Act.
In result, both the appeals of assessee are allowed for statistical purposes.
Order was pronounced in the open Court on 26 /02/2026.