INDIAN SOCIETY OF WEED SCIENCE,JABALPUR vs. COMMISSIONER OF INCOME TAX (EXCEMPTION), BHOPAL

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ITA 48/JAB/2025Status: DisposedITAT Jabalpur19 February 2026Bench: SHRI KUL BHARAT, VICE PRESIDENT AND SHRI, ANADEE NATH MISSHRA (Accountant Member)5 pages

AI SummaryRemanded

Facts

The assessee, an Indian Society of Weed Science, applied for registration under Section 12AB of the Income Tax Act, 1961. The CIT (Exemption) rejected the application, citing concerns about year-on-year surplus funds, non-compliance with TDS provisions, and a perceived lack of evidence for genuine activities.

Held

The Tribunal found that the CIT (Exemption) did not adequately consider the evidence submitted by the assessee and failed to provide a sufficient opportunity of being heard. Therefore, the Tribunal set aside the rejection order and remanded the case back to the CIT (Exemption) for fresh consideration.

Income Tax Appellate Tribunal, JABALPUR BENCH “DB”, JABALPUR

Before: SHRI KUL BHARAT & SHRI, ANADEE NATH MISSHRA

For Appellant: Shri Sapan Usrethe, Advocate

For Respondent: Shri Shravan Kumar Meena, CIT(DR)

PER KUL BHARAT, VICE PRESIDENT.:

This appeal, by the assessee is directed against the order of the Learned Commissioner of Income-tax (Exemptions), Lucknow dated 27.09.2024. The assessee has raised the following grounds of appeal: -

1. On the facts and in the circumstances in the case and in law, Learned CIT (Exemption) have erred in not granting the registration u/s 12AB of IT Act 1961, not gave further opportunity of being heard/compliance, by rejecting the application filed in form 10AB, and by cancelling the provisional registration granted on 06.01.2022 u/s 12AB r.w.s. 12A(l)(ac)(vi) of the IT Act 1961. Appellant states that it is entitled for such registration and prays accordingly. Your appellant prays for craves to add, alter, amend, modify, delete any or all grounds of appeal before or during the course of hearing.”

2. The facts giving rise to the present appeal are that the assessee is a trust who had filed an application in the Form No.10AB under Rule 17A of the Income Tax Rules, 1962 (“the Rules”, for short) before the Ld. CIT(E), seeking registration u/s 12AB of the Income Tax Act, 1961 (“the Act”, for short) on Page 2 of 5 20.06.2024. The said application was dismissed by the Ld. CIT(E) by observing as under: - “On receipt of application in Form No.10AB dated 20.06.2024 for registration u/s.12AB of the Income tax Act 1961, the case was assigned to the Jurisdictional Assessing Officer for verification. The JAO issued letters/notices through official mail/post calling for the details/ documents. On perusal of the submissions made by the assessee, both Range Head and Jurisdictional Assessing Officer did not recommend for registration and reasons mentioned in the report are reproduced as under:- “2. The financial statements submitted were perused and the observations are as under: (i) AY 2022-23: the assessee has shown income of Rs.19,19,328/- against which an amount of Rs.11,17,506/- (approx.58%) is treated as surplus (ii) AY 2023-24: against the total income of Rs. 96,94,639/-, the assessee has shown conference expenses to the extent of Rs.51,99,366/- and after considering general expenses of Rs. 6,61,909/-, an amount of Rs. 38,33,363/- (nearly 40% of the total receipts) is treated as surplus (iii) AY 2024-25: Against total receipt of Rs.15,59,987/-, major expenses are booked for salary (Rs.3,82,838/-) and printing and stationery (Rs. 1,00,153), a surplus of Rs.5,91,963/- is treated as surplus. (iv) The provisional statement as at 31.10.2024: Show receipt of Rs.22,68,948/- against which expenses are booked for salary and expenses (Rs.3,05,506/-), Mementos & Awards (Rs. 3,06,140/-) and printing and stationery (Rs.1,84,710/-) with a surplus of Rs.11,03,884/- 3. The address of the assessee as per Form-10AB and the audit report is shown as Jabalpur and registered office at Bangalore with society registration as per Karnataka Socialites Registration Act, 1960. The audit report in Form-10BB for the AY 2023-24 has made an observation -: “The Chapter VII-B of the Income Tax Act, 1961 regarding TDS is not being complied with “Similar remark has been made by the auditor in his audit report AY 2021- 22 & AY 2022-23. 3.1 Though the expenses seem to be towards the objects of the trust, the assessee is showing surplus year on year basis for which no explanation is offered. Also, the audit report has commented adversely regarding the TDS compliances by the assessee.”

2. Assessee has made substantial amount of expenditure towards the objects and assessee has not submitted any proof or evidence of activities. Thus, it is clear that the assessee has not commenced its activities towards the attainment of the objects.

Section 12AB(1)(b)(i & ii) of the Income Tax Act, 1961 is reproduced as under :- “ (i) call for such documents or information from the trust or institution or make such inquiries as he thinks necessary in order to satisfy himself about - Page 3 of 5 (A) the genuineness of activities of the trust or institution; and (B) the compliance of such requirements of any other law for the time being in force by the trust or institution as are material for the purpose of achieving its objects; (ii) after satisfying himself about the objects of the trust or institution and the genuineness of its activities under item (A) and compliance of the requirements under item (B), of subclause (i),— pass an order in writing registering the trust or institution or make (i) such inquiries as he thinks necessary in order to satisfy himself about- (ii) if he is not so satisfied, pass an order in writing rejecting such application and also cancelling its registration after affording a reasonable opportunity of being heard;" According to the Section, the assessee is required to submit (iv) necessary documents to prove the genuineness of the activities of the Trust or institution and also the compliance of such requirements of any other law as are material for the purpose of achieving its objects. (v) In the present case, the assessee submits all the necessary documents / details as required for registration u/s.12AB of the Income Tax Act, 1961. Hence, application in Form No.10AB dated 20-06-2024 filed for registration u/s.12AB of the I T Act, is hereby rejected and registration cancelled.”

Aggrieved against this, the assessee is in appeal before this Tribunal.

At the outset, the Ld. Counsel for the assessee contended that the authority below has not considered the evidences filed by the assessee and has incorrectly returned a finding that no evidence was filed in support of the activities. He drew our attention to the evidences filed before the Ld. CIT(E). It is also stated that the Ld. CIT(E) has not provided sufficient opportunity of being heard to the assessee before passing the rejection order. Therefore, he prayed that the order of the Ld. CIT(E) may be set aside and the Ld. CIT(E) be directed to grant registration u/s 12AB of the Act.

On the other hand, the Ld. CIT-DR opposed the submissions and supported the order of lower authorities and submitted that there is no infirmity in the order of the Ld. CIT(E).

Page 4 of 5 6. We have heard rival submissions and perused the material available on record. The assessee has demonstrated that he had filed evidences related to the activity, it appears that these evidences escaped attention of the Ld. CIT(E). The law mandates that the Ld. CIT(E) is required to verify the genuineness of the activities of the assessee. In my considered view, the Ld. CIT(E) ought to have examined whether the funds have been applied towards the objects of the society and the reasons for the creation of surplus funds. Therefore, to sub-serve the principles of natural justice we deem it proper and in the interest of justice to set aside the impugned order of the Ld. CIT(E) and restore the application along with evidences filed in the form of paper book herein and stated to be filed before the Ld. CIT(E) as well. The Ld. CIT(E) would re-consider the application and decide the same in accordance with law after giving adequate opportunity of being heard to the assessee. Grounds of appeal of the assessee are allowed for statistical purposes.

In the result, the appeal of the assessee is allowed for statistical purposes.

Order pronounced in the open Court on 19/02/2026.