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Facts
The assessee, Shri Navjyot Foundation, filed applications for trust registration under sections 12AA/12AB and 80G(5) approval. The CIT(E) rejected both applications due to the assessee's failure to respond to a second notice seeking details about its objects and activities. The assessee sought another opportunity, asserting it had a good case on merits.
Held
The Tribunal found merit in the assessee's request for a fresh opportunity. It restored both applications to the CIT(E) for re-consideration, directing the CIT(E) to provide a fair and reasonable opportunity. The 80G(5) approval application is to be considered after the order on the 12AA/12AB registration.
Key Issues
Whether the rejection of applications for trust registration under section 12AA/12AB and 80G(5) approval due to non-compliance with a notice seeking details was justified, and if the assessee should be granted a fresh opportunity.
Sections Cited
Section 254(1) of the Income Tax Act, Section 12AA of the Income Tax Act, Section 12AB of the Income Tax Act, Section 80G(5) of the Income Tax Act
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PER PAWAN SINGH, JUDICIAL MEMBER: 1. These two appeals by the assessee are directed against the separate orders ld. Commissioner of Income Tax (Exemption) [for short “CIT(E)”]. In the assessee has challenged the rejection of 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 26.06.2024. First notice of hearing was responded, however the assessee could not respond to second notice dated 20.01.2025 wherein certain details about the object and activities and other requirement was sought by the CIT(E). The assessee could not furnish such reply, 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 have 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 authorities carefully. We find merit in the submission of ld. A.R. of the assessee that in response to show–cause notice, the assessee filed certain details vide reply dated 05.11.2024, however no compliance was made in response to show–cause notice dated 02.01.2025. 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, 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.
1. is allowed for statistical purposes.
6. 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 23/02/2026.