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Facts
The assessee filed applications for registration under sections 12A(1)(b)(ii) and 80G(5) of the Income-tax Act, 1961. The CIT(E) rejected these applications, citing a deposit with M/s Sagar Textile as a commercial transaction and alleging failure to provide complete details to verify the trust's activities.
Held
The Tribunal held that the CIT(E) did not provide adequate opportunity of being heard to the assessee and that the rejection of registration was not justified. The issues were restored to the file of the CIT(E) for fresh consideration after affording a reasonable opportunity.
Key Issues
Whether the CIT(E) properly considered the assessee's reply and afforded a sufficient opportunity of being heard before rejecting the registration applications.
Sections Cited
12A(1)(b)(ii), 80G(5), 11(5), 12A(1)(ac)(iii), 80G(5)(iii), 12AB(1)(b)(ii)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI ‘B’ BENCH,
Before: MS. MADHUMITA ROY, & SHRI NAVEEN CHANDRA
preferred against the order of the ld. CIT(E), Delhi dated 27.11.2024 rejecting the application for registration u/s 12A(1)(b)(ii) and u/s 80G(5) of the Income-tax Act, 1961 [the Act, for short]. [A.Y. 2024-25] [A.Y. 2024-25] Shri Ram Sarup Gupta Memorial Trust Vs. The C.I.T(E) 2. 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.
Representatives of both the sides were heard at length. Case records carefully perused. Relevant documentary evidence brought on record duly considered in light of Rule 18(6) of the ITAT Rules.
Brief facts of the case is that the assessee filed an application dated 12.05.2024 in Form 10AB for regular registration u/s 12A(1)(ac)(iii) of the I T Act as also an application dated 15.05.2022 in Form 10AB for regular registration u/s 80G(5)(iii) of the I T Act. The ld. CIT(E) has rejected both the application for grant of registration u/s 12A(1)ac(iii) and 80G(5) of the Income-tax Act, 1961 [the Act, for short].
The CIT(E) found that the assessee had deposited Rs. 6,00,000/- with M/s Sagar Textile and earning an interest income of Rs. 54,000/- and considered it as commercial transactions and violation of section 11(5).
The CIT(E) further noted that the assessee has failed to file complete details, information and documents required by the notices to verify the genuineness of the activities of the trust. The CIT (Exemption), thereafter rejected the registration applications vide order dated 27.11.2024. [A.Y. 2024-25] [A.Y. 2024-25] Shri Ram Sarup Gupta Memorial Trust Vs. The C.I.T(E) 5. The assessee is aggrieved and has come in appeal before us and submitted that the ld. CIT(E) did not consider the reply of the assessee nor its annexures and passed order. The ld AR vehemently argued that the ld. CIT(A) was not right in rejecting the applications of the assessee for registration 12AB(1)(b)(ii) and u/s 80G of the Act and submitted that the ld. CIT (Exemption) rejected the applications without granting any opportunity of being heard to the assessee.
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 the assessee has filed several documents and evidences before us, which were filed by the assessee before the CIT(E), to establish the genuineness of the activities of the trust. The rejection of grant of registration by ld. CIT(A) is not justified as the ld. CIT(E) has not given adequate opportunity of being heard to the assessee which is apparent from the record. Accordingly, in the interest of justice and fair play, we restore the issues to the file of the ld. CIT(E). The assessee is directed to furnish the necessary documents for verification and the ld. CIT(E) is directed to examine the same and decide the issues as per the provisions of law after affording reasonable and sufficient opportunity of being heard to the assessee.
ITA No. 425/DEL/2025 [A.Y. 2024-25] [A.Y. 2024-25] Shri Ram Sarup Gupta Memorial Trust Vs. The C.I.T(E) 8. In the result, appeals of assessee in and 452/DEL/2025 are allowed for statistical purposes.
The order is pronounced in the open court on 27.10.2025.