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Facts
The assessee, a society, applied for registration under Section 12AB and approval under Section 80G. The CIT(E) rejected the applications citing the assessee's failure to provide complete details and documents despite multiple opportunities and show-cause notices.
Held
The Tribunal held that the assessee deserved a reasonable opportunity to rectify its shortcomings and make complete compliances. The CIT(E) should have focused on the objectives of the society for registration rather than solely on the genuineness of expenses.
Key Issues
Whether the rejection of registration under Section 12AB and approval under Section 80G was justified without providing sufficient opportunity for compliance. The scope of examination by the CIT(E) at the registration stage.
Sections Cited
12AB, 80G, 12A(1)(ac)(iii), 12A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘F’: NEW DELHI
Before: SHRI MAHAVIR SINGH, HON’BLE & SHRI AVDHESH KUMAR MISHRA
A.Y. 2024-25 Jan Seva Samiti Commissioner of Income A-10B, Panchsheel Vihar Tax (Exemption), Malviya Nagar, New Delhi Vs. Civic Centre, Minto Road, PAN: AACAJ0605K New Delhi (Appellant) (Respondent) Appellant by Sh. Sachin, Advocate Respondent by Sh. Ajay Kumar Arora, Sr. DR Date of Hearing 10/10/2025 Date of Pronouncement 10/10/2025 ORDER PER AVDHESH KUMAR MISHRA, AM These appeals are inter-connected as these contain common facts. Therefore, these appeals were heard together and are being disposed off by this common order.
These appeals for Assessment Year (AY) 2024-25 filed by the assessee are directed against orders dated 26.12.2024 of the Commissioner of Income Tax (Exemption), New Delhi [‘CIT(E)’]. Vide these appeals, the assessee has challenged the (i) rejection of registration under section 12AB of the Income Tax Act, 1961 (‘Act’) and (ii) denial of approval under section 80G of the Act.
& 3702 /Del/2025 Jan Sewa Samiti 3. The relevant facts giving rise to these appeals are that the assessee is a society. It filed an application for registration under section 12A(1)(ac)(iii) of the Act on 17.06.2024, which was rejected by the Ld. CIT(E) on the reasoning that the assessee had failed to ensure requisite details, documents, etc. though many opportunities of being heard were provided to it (Only part submissions have been made by the assessee). It is evident from the impugned order that the Ld. CIT(E) issued a show-cause notice to the appellant assessee to ensure compliance on 02.08.2024. However, a part-compliance was made by the appellant assessee. Again the Ld. CIT(E) issued another show-cause notice dated 21.10.2024 to furnish various details, documents, etc. by 28.10.2024. However, the assessee sought adjournment. Thereafter, another show-cause notice dated 13.11.2024 was issued by the Ld. CIT(E) for compliance by 20.11.2024. However, no compliance was made by the appellant assessee. Thereafter, the Ld. CIT(E) observing as under rejected the said application: - “4. In order to meet the ends of natural justice, the applicant was afforded final opportunity vide letter dated 13.11.2024 to submit all details and documents as requisitioned vide letter dated 18.07.2024 by 20.11.2024. It was also made aware that it was being granted a final opportunity to file details/documents sought by this office, failing which its application would be disposed off as per details and documents available on records and the provisional registration/approval obtained through CPC may also be cancelled. However, the assessee has failed to submit details and documents like bank statements, bank book, cash book, bills/ vouchers, documentary evidence in support of its claim of carrying out charitable activities and other documents as requisitioned vide this office notice dated 18.07.2024 which are essential to verify the genuineness of the activities and the trust.”
& 3702 /Del/2025 Jan Sewa Samiti 3.1 The Ld. CIT(E), vide impugned orders, has not only rejected the application for regular registration but has also rejected the provisional registration granted to the applicant for AYs 2023-24 to 2025-26 vide order dated 27.08.2022. Consequentially, the Ld. CIT(E) did not grant approval under section 80G of the Act.
Before us, the Ld. counsel contended that the assessee did not ensure proper and complete compliance before the Ld. CIT(E) as it was in nascent stage.
The Ld. Sr. DR placed emphasis on the order of the CIT(E) and submitted that the appellant assessee ensured only part compliance before the Ld. CIT(E) though sufficient opportunities of being heard were provided to it; hence the registration had been rightly rejected. Further, it was submitted that the appellant assessee failed to demonstrate that it existed for charitable activities. The Ld. DR therefore, prayed for dismissal of both appeals.
We have heard both parties and perused the case records. We have taken note of the fact that the assessee has ensured part-compliance before the Ld. CIT(E). As submitted by the appellant assessee, the society was formed with the main objects of charitable activities as health camps, distribution of food and clothes to poor, cultural & spiritual programs, etc. The purpose of granting registration to various trust/society, etc. under the Act is to provide welfare to one and the all in the society to achieve the & 3702 /Del/2025 Jan Sewa Samiti directive principles of the state policy. At the time of registration under section 12A of the Act, the objectives for which the appellant assessee existed needs to be looked into rather than the genuineness of expenses, which is the domain of the Assessing Officer. Granting of (i) registration under section 12AB of the Act and (ii) approval under section 80G of the Act enhances the socio-economic welfare in the society. Therefore, in the interest of justice and considering all the afore-stated observations, we are of the considered view that the appellant assessee deserves reasonable opportunity of being heard to make shortcomings or part-compliances. In view thereof, without offering any comment on merit of the case, we deem it fit to set aside both impugned orders and remit both matters back to the file of the Ld. CIT(E) for de-novo consideration of (i) registration under section 12AB of the Act and (ii) approval under section 80G of the Act. Hence, we Order accordingly. The appellant assessee should ensure compliances during the remanded proceedings before the Ld. CIT(E). The Ld. CIT(E) is also required to provide reasonable opportunities of being heard to the appellant assessee before deciding the case on merit.
In the result, both appeals are allowed for statistical purposes.