ASHISH LEGAL FOUNDATION,FARIDABAD vs. CIT EXEMPTIONS, CHANDIGARH

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ITA 1417/DEL/2025Status: DisposedITAT Delhi10 September 2025AY 2024-256 pages
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What did the Tribunal hold?

The Tribunal held that the CIT(E) erred in rejecting the applications solely on the ground that similar applications had been rejected previously. The CIT(E) was mandated to examine the assessee's application on its merits, including the genuineness of the trust's objects and activities. Rejecting an application without assigning specific reasons and without conducting an independent assessment of the activities' genuineness violates the principles of natural justice and statutory requirements. The Tribunal noted that if there were no activities undertaken, the CIT(E) could not assess their genuineness. Therefore, the order of the CIT(E) was set aside. The matter was restored to the file of the CIT(E) to decide afresh after providing the assessee with an opportunity of being heard. The appeals were allowed for statistical purposes.

What were the facts?

The assessee, Ashish Legal Foundation, a company incorporated under Section 8 of the Companies Act, 2013, applied for provisional registration under Section 12AB and Section 80G of the Income Tax Act, 1961, on October 17, 2022, and was granted provisional registration on November 7, 2022. The assessee was required to apply for final registration within six months of commencing operations on October 31, 2022. The assessee filed a fresh application for final registration on September 6, 2023, after the initial application was rejected. The Commissioner of Income Tax (Exemption) [CIT(E)], Chandigarh, rejected the fresh application for both Section 12AB and Section 80G registration on November 5, 2024, stating that the applicant could not apply again as previous applications had already been rejected. The appeals are directed against this order of the CIT(E). The appeals were filed 35 days late, and the delay was condoned by the Tribunal.

What were the issues?

1. Whether the cancellation of registration under Section 12AB by the CIT(Exemption) was valid, considering the assessee's contention that adequate opportunity was not provided and submissions/evidence were not considered, violating principles of natural justice? 2. Whether the CIT(Exemption) erred in interpreting Section 12AB and wrongly concluding that the appellant's activities were not genuine or not in accordance with its objects? 3. Whether the CIT(Exemption) failed to establish any violation of the definition of charitable purpose under Section 2(15) of the Act, and whether the appellant's activities are genuine and aligned with its objects? 4. Whether the CIT(Exemption) erred in law by holding that Section 12A of the Income Tax Act, 1961, prohibits filing a fresh application after addressing earlier deficiencies or after rejection of a previous application, making the denial of the current application unsustainable? 5. Whether the CIT(Exemption) failed to appreciate circulars and judicial pronouncements clarifying that fresh applications can be filed when deficiencies are rectified? Assessee's Contentions: - The CIT(E) cancelled registration without adequate opportunity and consideration of submissions/evidence, violating natural justice. - The CIT(E) misinterpreted Section 12AB and wrongly concluded about the genuineness of activities. - No violation of Section 2(15) was established, and activities are genuine and aligned with objects. - Section 12A does not prohibit fresh applications after rectifying deficiencies or previous rejection; denial based solely on prior rejection is unsustainable. - Circulars and judicial pronouncements allow fresh applications after rectifying deficiencies. - The assessee is a bona fide charitable organization fulfilling all conditions for approval under Sections 12AB and 80G. - The rejection order lacked adequate reasoning and clarity, causing prejudice. - Relied on Ananda Social and Educational Trust v. CIT (2020) 272 Taxman 7 (SC) for the principle that at the registration stage, the Commissioner only needs to be satisfied about the objects and genuineness of activities, not their actual performance or scale. Revenue's Contentions: - Relied on the order of the CIT(E), submitting that the application was rightly rejected because a similar application had already been rejected by the authority.

Which sections of the Income-tax Act were involved?

Section 12AB,Section 80G,Section 2(15),Section 12A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “C”, DELHI

Before: SH. SUDHIR KUMAR & SH. MANISH AGARWAL

Hearing: 21/08/2025Pronounced: 10/09/2025

Heard together (2 matters)

ITA No.1418/DEL/2025
ITA No. 1417/Del/2025

Read from the judgment's own cause title. This page is filed under one of them.

Date of hearing: 21/08/2025 Date of Pronouncement: 10/09/2025 ORDER PER SUDHIR KUMAR, JUDICIAL MEMBER:

These appeals by the assessee are directed against the order of the Commissioner of Income Tax (Exemption), Chandigarh [hereinafter referred to as “CIT(E)”] vide order dated 05.11.2024.

ITANo. 1417 & 1418/Del/2025 2 Ashish Legal Foundation v. CIT(Exemption ) Chandjgarh 2. The appeals are filed time barred by 35 days. The assessee has filed the applications for condonation of delay for 35 days. In the application the assessee has stated that due to illness he has not filed the appeal within prescribed time limit. The assessee has shown sufficient cause for not filing the appeal within time limit. Therefore, we allow the application for condonation of delay. Delay is condoned and appeal is admitted for adjudication.

3. The assessee has raised the common grounds in both appeals:- 1. The Learned CIT (Exemption) has grossly erred on facts and in the circumstances of the case and in law cancelling the registration under section 12AB without affording adequate opportunity to the appellant to present the case and without considering the submission and evidence provided which violated the principles of natural justice.

2.

The Learned CIT(E) has erred in interpreting the provision of section 12AB and wrongly concluded that the appellant's activities were not genuine or not carried out in accordance with its objects.

3.

The Learned CIT (E) fails to establish any violation of the definition of charitable purpose as per section 2(15) of the Act, and activities of appellant are genuine and in alignment with its objects.

4. The Learned CIT (E) has erred that section 12A of Income Tax Act 1961 does not explicitly prohibit the filling of a fresh application after addressing earlier deficiencies of after rejection of previous application. The denial of current application solely based on the rejection of the earlier application under same section is not sustainable.

ITANo. 1417 & 1418/Del/2025 3 Ashish Legal Foundation v. CIT(Exemption ) Chandjgarh 5. The Learned CIT (E) not appreciating the circular and judicial pronouncement clarify that fresh application of registration can be filed when deficiencies in previous application are rectified, provided they adhere to the prescribed

6. The Learned CIT (E) error in law the appellant is bona fide charitable organization engaged in public welfare activities and fulfilled all the necessary condition for approval of application under section 12AB and 80G.

7. The Learned CIT (A) has failed to provide adequate reasons for rejecting application under section 12 AB which directly impacted the present application under section 12AB and 80G of Act activity

8.

The Learned CIT(E) fails to appreciate that rejection order lacks 8 adequate reasoning and clarity. Thereby causing prejudice to the appellant.

9.

The appellant craves leave to add, amend, alter, or vary from the above grounds of appeal at or before the time of hearing.

4.

The brief facts of the case are that M/s. Aasish Legal Foundation was incorporated under Section 8 of the Companies Act, 2013 with the primary objection of engaging in charitable activities, including legal awareness, access to justice, education, and public interest legal support. The assessee applied for provisional registration u/s 12AB and section 80G of the Act on 17-10-2022 through Form 10A and was granted provisional registration for three years vide certificate dated 07- 11-2022. The assessee is a charitable trust duly registered provisionally under section 12AB of the income Tax Act, 1961 engaged in activities for charitable purposes as defined under ITANo. 1417 & 1418/Del/2025 4 Ashish Legal Foundation v. CIT(Exemption ) Chandjgarh section 2 (15) of the Act. As per the rule 17A of the Income Tax rules, the company was required to apply for final registration within six months of commencing operations dated 31-10- 2022and same was rejected by the Ld. CIT(E), without any proper justification. The assesse again filed Form 10AB dated 06-09-2023 for final registration u/s 12A(1) (ac)(iii) and 80G(5)(iii) enclosing all supporting evidence but the Ld. CIT(E ) has denied registration observing as under: Denial of 12 AA/12AB registration: “ An application for registration u/s 12A(1)(ac)(iii) of the Income Tax Act, 1961 was filed by the applicant electronically in Form 10AB. On perusal of our records, it is seen that the application of the applicant under section 12A(1)(ac)(iii) has already been rejected in past on 23-02-2024. As the application of applicant has been rejected once, the applicant cannot apply for approval u/s 12A again. In view of the above, the present application of the applicant is cancelled being non-maintainable. Denial of 80G Registration: “ An application for approval u/s 80G (5) (iii) of the Income Tax Act,1961 was filed by the applicant electronically in Form 10AB. On perusal of our records, it is seen that the application of the applicant under section 80G (5) (iii) has already been rejected in past on 06- 03-2024 in absence of regular 12AB registration. AS the application of applicant has been rejected once, the applicant cannot apply for approval u/s 80G again. In view of the above, the present application of the applicant is cancelled being non-maintainable.

5.

The ld. AR of the assessee submitted that assessee is doing the charitable activities and all funds received have been solely ITANo. 1417 & 1418/Del/2025 5 Ashish Legal Foundation v. CIT(Exemption ) Chandjgarh used to advance its social objectives. The assessee has maintained the books of accounts which were duly audited by chartered accountant. He also submitted that the Ld. CIT( E) rejected the application without any specific clarification and verifying the genuineness. The application was rejected sole ground that same application has been already rejected ignoring that the applicant moved the fresh application. Reliance has placed on the following decisions; “In the case of Ananda Social and educational Trust v. CIT(2020) 272 Taxman 7(SC) the Hon’ble Supreme Court held that at the stage of registration, the commissioner is only to satisfy himself about the objects of the trust and genuineness of its activities not the actual performance or quantitative scale of activities.”

6.

Ld. DR relied the order of the Ld. CIT (E ) and submitted that the application was rightly rejected because similar application has already been rejected by the authority.

7.

We have heard the parties and gone through the material available on record. It reveals from the order of the Ld. CIT(E ) that the application was rejected on the basis that in past the same applications of the applicant already have been rejected. The Ld. CIT(E) should have examine the application of the assessee and should have reached the conclusion, whether the activities of the trust was charitable or not. The application cannot be rejected without assigning any reason, only this

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