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Facts
The assessee filed applications for registration under Section 12AB(1)(b)(ii) and approval under Section 80G(5)(iii) of the Income Tax Act. The CIT(E) rejected these applications citing that the assessee had not carried out any charitable activities or expenditures and had not furnished bills and vouchers.
Held
The Tribunal held that the CIT(E) was not justified in rejecting the applications solely on the grounds that the assessee, being recently incorporated, had not yet commenced charitable activities or incurred expenditure. The Tribunal restored the issue to the CIT(E) for fresh consideration.
Key Issues
Whether rejection of registration and approval applications is justified when the assessee is a newly incorporated entity and has not yet commenced activities.
Sections Cited
12AB(1)(b)(ii), 80G(5)(iii)
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Income Tax Appellate Tribunal, DELHI ‘C’ BENCH,
Before: SHRI YOGESH KUMAR U.S., & SHRI NAVEEN CHANDRA
preferred against the order of the ld. CIT(E), Delhi dated 21.12.2023 rejecting the application for registration u/s 12AB(1)(b)(ii) and Page 1 of 5 1961 [the Act, for short].
Since both the captioned appeals were heard together and pertain to same assessee, they are disposed of by this common order for the sake of convenience and brevity.
None appeared on behalf of the assessee. We decided to proceed 3. ex-parte with assistance of the ld DR. The ld. DR was heard at length and the case records were carefully perused.
There is a delay of 529 days in filing the appeals. The reasons cited by the assessee in the application filed by the assessee seem to be plausible. We, therefore, condone the delay.
Brief facts of the case are that the assessee filed application for registration u/s 12AB(1)(b)(ii) of the Act and Form 10AB for approval u/s 80G(5)(iii) of the of the Act. The ld. CIT (Exemption) issued notices alongwith questionnaire and requested the assessee to furnish several documents to which the assessee filed its reply by furnishing few details and balance sheet.
The CIT (Exemption) rejected the registration applications vide order dated 21.12.2023 on the grounds that the assessee has not carried out any expenditure, has not carried out any charitable activities and has not furnished any bills and vouchers
Page 2 of 5 the say of the assessee that the ld. CIT(E) was not justified in rejecting the application for registration u/s 12AB(1)(b)(ii) of the Act as well as application for grant of approval u/s 80G(5)(iii) of the Act on the grounds that the assessee has not carried out any expenditure, has not carried out any charitable activities and has not furnished any bills and vouchers. The assessee pointed out that the assessee was incorporated only on 26.05.2022 and, therefore, could not commence the charitable activities in F.Y. 2022-23 itself.
Per contra, the ld. DR relied upon the orders of the ld. CIT(E).
We have given a thoughtful consideration to the order of the CIT (Exemption). We find that at the time of registration, the ld. CIT(E) is required to examine the genuineness of the activities of the institution.
We find the rejection of grant of approval for registration by ld. CIT(E) is not justified. Accordingly, in the interest of justice and fair play, we deem it fit restore the issue of registration to the file of the ld. CIT(E) to take into consideration the nascent stage of the institution. The assessee is directed to furnish the necessary documents for verification and the ld. CIT(E) is directed to examine the same for grant of registration u/s 12AB(1)(b)(ii) and for grant of approval u/s 80G(5)(iii)
Page 3 of 5 sufficient opportunity of being heard to the assessee.
In the result, appeals of assessee in and 4849/DEL/2025 are allowed for statistical purposes.
The order is pronounced in the open court on 10.12.2025.