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Facts
The assessee trust applied for regular registration under Section 12AB and approval under Section 80G of the Income Tax Act. The CIT(E) rejected both applications, citing lack of sufficient evidence regarding the genuineness of the trust's charitable activities and failure to provide financial statements. The CIT(E) was not satisfied that the activities were in consonance with the trust's objects.
Held
The Tribunal noted that the CIT(E) denied registration without giving a positive finding that the assessee had not carried out its activities as per the trust's objects, but rather due to a lack of sufficient evidence. The Tribunal found that some details were submitted, which needed to be examined afresh by the CIT(E). Therefore, the matter was set aside and restored to the CIT(E) for a fresh order.
Key Issues
Whether the CIT(E) erred in rejecting the application for registration under Section 12AB and approval under Section 80G due to insufficient evidence regarding the genuineness of charitable activities and their consonance with the trust's objects.
Sections Cited
12AB, 80G
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AGRA BENCH ‘DB’ AGRA
Before: SHRI SUNIL KUMAR SINGH & SHRI BRAJESH KUMAR SINGH
Date of Hearing 21.04.2025 Date of Pronouncement 20.06.2025 ORDER PER BRAJESH KUMAR SINGH, AM,
These two appeals by the same assessee are directed against the rejection of the application of the assessee trust for regular registration u/s 12AB of the Income Tax Act, 1961 (hereinafter referred to ‘the Act’) and rejection of application of the assessee trust seeking approval u/s 80G of the Act by the Ld. Commissioner of Income Tax (Exemption), Lucknow vide respective orders dated 28.11.2024 and 30.12.2024.
Brief facts of the case in The application for registration of the trust u/s 12AB of the Act was filed on 02.05.2024 by the assessee in Form No.10AB under Rule 17A of the Income Tax Rules, 1962.
The ld. CIT(E) issued notice to the applicant calling for necessary details specifying the main area of charitable/religious activities and a projection/plan for the main charitable/religious activities to be undertaken in the next two years. The ld. CIT(E) on perusal of the reply submitted by the assessee noted that only part reply was submitted by the assessee and that no expenditure was incurred on charitable activities as per the objects mentioned in the trust deed. The ld. CIT(E) also noted that even the assessee did not file any financial statements and also listed out various other details which were not filed. In view of these facts, the ld. CIT(E) noted that in absence of sufficient evidence with regard to the genuineness about the activities claimed to have been carried out for charitable purpose as per the objects of the assessee trust was not established. Thereafter, the ld. CIT(E) referred the provisions of section 12AB of the Act stating that before granting registration under this section, the Commissioner has to satisfy himself about the genuineness of the activities of the trust or institution and also he has to verify that these activities are in consonance with the object of the trust or institution. Finally, the ld. CIT(E) noted that in view of these facts, he was unable to satisfy himself about the charitable nature of the activities and hence the application filed by the applicant for registration u/s 12AB of the Act was rejected by him and also initiated the proceedings of cancellation of provisional registration granted u/s 12AB dated 19.11.2021 No.AABTI9187ME20215.
Against the above rejection, the assessee has raised following grounds of appeal:-
1. In the facts and circumstances of the case and in law, ld. CIT(E) has erred in rejecting the application of the Assessee Trust for regular registration under section 12AB of the IT Act, 1961 for the alleged reasons of failure on the part of Assessee Trust to file documentary evidences to satisfy about the genuineness and commencement of charitable activities and also allegedly failing to enable verification of these activities being in consonance with its objects. The action of the ld. CIT(E) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by directing the ld. CIT(E) to grant the registration.
2. In the facts and circumstances of the case and in law, ld. CIT(E) has erred in passing the order being without jurisdiction. The action of the ld. CIT(E) is illegal and, therefore, the order deserves to be quashed ab initio. 3.1. The assessee has filed additional ground of appeal, which is as under:-
“2. In the facts and circumstances of the case and in law, ld. CIT(E) has erred in passing the order being without jurisdiction. The action of the Ld. CIT(A) is illegal and, therefore, the order deserves to be quashed ab-initio.” 3.2. However, vide letter dated 21.04.2025, the assessee submitted that this ground no.2 may kindly be treated as not pressed. Hence, this ground of appeal is dismissed as not pressed.
During the hearing before us, the ld. AR filed a written submission explaining the activities of the trust and also filed a paper book containing pages 1 to 48. The different activities referred in the paper book as mentioned in the written submission are as under:-
i. Bridging Learning, Activism and the Arts with Lapat [PB-23-25] ii. Nurturing Future Leaders through Global Politics [PB-26-27] iii. Transforming Computer Education into Opportunities [PB-28-29] iv. Empowering Youth through STEM and NASA Collaboration [PB-30- 33] v. Sparking Curiosity: Junior Science Program [PB-34-35] vi. Inspiring Youth Through Sports [PB-36-38] vii. Revolutionizing Education: The Inverted Classroom Model[PB-39- 42] viii. Showcasing Talent: Children Perform at National School of Drama [PB-}43-45
Further, in paper book, the financial statements were also submitted for Financial Years 2023-24 and 2022-23. The ld. AR also filed a copy of
Ld. CIT-DR submitted that all the evidences are new evidences and the application for admission for additional evidences should be filed by the assessee. The ld. CIT-DR supported the orders of the Ld. CIT(E) and submitted that denial of exemption along with denial of registration u/s 80G should be upheld.
We have heard both the parties and perused the materials available on record. It is seen that the assessee had submitted various details which needs to be examined afresh by the ld. CIT(E). The contention of the ld. CIT- DR that these evidences are new evidences is not acceptable as the assessee has clarified that the same were filed before the Ld. CIT(E). Further, the ld. CIT(E) denied the registration without giving any positive finding that the assessee had not carried out its activities as per the objects of the trust but in absence of sufficient evidence with regard to the genuineness of the activities claimed to have been carried out for charitable purpose as per the objects of the trust was not established by the assessee. Therefore, in the given facts of the case and in the interest of justice, we set-aside the order of the ld. CIT(E) and restore back the matter to his file for passing a fresh order after giving reasonable opportunity to the assessee to submit necessary evidences in support of its claim for grant of regular registration u/s 12AB of the Act.
In the result, the appeal of the assessee is allowed for statistical purposes.
The Ld. CIT(E) in his order dated 30.12.2024, rejecting the application of the assessee seeking approval u/s 80G of the Act noted that as per Rule 11AA of the Income Tax Rule-1962, the registration u/s 12A/12AB or notification u/s 10(23C) is a precondition for granting approval u/s 80G of the I.T. Act, 1961. Therefore, rejection of application dated 25.06.2024 seeking approval u/s 80G of the Act is consequential in nature in this case. Since we have decided in to remand the matter back to the file of ld. CIT(E) for fresh adjudication for grant of regular registration u/s 12AB of the Act, we, therefore, set-aside the order of the ld. CIT(E) dated 30.12.2024 subject matter of appeal in Ld. CIT(E) for fresh order after giving reasonably opportunity of being heard to the assessee.
Finally, both appeals of the assessee are allowed for statistical purpose.
Order pronounced in the open court on 20th June, 2025.