SHRI NAVJYOT FOUNDATION,GONDIA vs. CIT EXEMPTION, PUNE, PUNE

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ITA 200/NAG/2025Status: DisposedITAT Nagpur23 February 20263 pages
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What did the Tribunal hold?

The Tribunal found merit in the assessee's submission that it had filed a reply to a show-cause notice on 05.11.2024, although it failed to comply with a subsequent notice dated 02.01.2025, leading to the rejection of its application under section 12AA/12AB. Considering the facts and circumstances, the Tribunal held that the assessee deserved one more opportunity to explain its objects and activities for seeking registration. Therefore, the matter was restored back to the file of the CIT(E) to re-consider the application afresh, with a direction to allow a fair and reasonable opportunity to the assessee before passing an order. For ITA No. 199/Nag/2025, the appeal was allowed for statistical purposes. Regarding ITA No. 200/Nag/2025, concerning the section 80G(5) approval, the Tribunal noted that since the section 12AB application was restored, this application was also restored to the CIT(E) to be considered after the order was passed on the section 12AB application. Consequently, both appeals were allowed for statistical purposes.

What were the facts?

The assessee, Shri Navjyot Foundation, filed appeals against orders passed by the Commissioner of Income Tax (Exemption) [CIT(E)]. In ITA No. 199/Nag/2025, the assessee challenged the rejection of its application for registration as a trust under section 12AA/12AB of the Income Tax Act, 1961. In ITA No. 200/Nag/2025, the assessee challenged the rejection of its application for approval of a fund under section 80G(5) of the Act. Both appeals were heard together. The assessee's application for registration under section 12AA/12AB was rejected because it failed to respond to a second notice dated 20.01.2025, seeking details about its objects and activities. Consequently, the application for approval under section 80G(5) was also rejected.

What were the issues?

1. Whether the assessee is entitled to an opportunity to re-submit its application for registration as a trust under section 12AA/12AB of the Income Tax Act, 1961, despite failing to respond to a notice from the CIT(E)? Assessee's contention: The assessee argued that it is a charitable trust and, although it missed responding to the second notice, it is interested in pursuing the matter on merit and seeks one more opportunity to comply, undertaking to be more vigilant. It also submitted that it had responded to a prior notice. Revenue's contention: The revenue argued that since the assessee did not respond to the notice issued by the CIT(E), it is not eligible for any further relief, and both appeals should be dismissed. 2. Whether the assessee is entitled to an opportunity to re-submit its application for approval of its fund under section 80G(5) of the Income Tax Act, 1961, given the outcome of the section 12AA/12AB application? Assessee's contention: Implicitly, the assessee sought this opportunity as well, given the interconnectedness of the appeals. Revenue's contention: Implicitly, the revenue sought dismissal of this appeal as well.

Which sections of the Income-tax Act were involved?

Section 12AA,Section 12AB,Section 80G(5),Section 254(1)

AI-generated summary — verify with the full judgment below

Heard together (2 matters)

ITA No. 199/NAG/2025
ITA No. 200/NAG/2025

Read from the judgment's own cause title. This page is filed under one of them.

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.

2.

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.

3.

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.

4.

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.

1.

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.

7.

In result, both the appeals of assessee are allowed for statistical purposes. Order was pronounced in the open Court on 23/02/2026.

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