Case Law Details
Rayoman Charitable & Research Foundation Vs ITO Exemption (ITAT Mumbai)
Material Facts
The assessee-trust filed Form No. 10AB on 30.09.2025 under Section 12A(1)(ac)(ii) seeking renewal of registration under Section 12AB. The CIT(E) issued a notice dated 07.01.2026 seeking documents prescribed under Rule 17A(2). As the assessee did not comply, the application was rejected on 01.03.2026.
Proceedings and Submissions
The assessee submitted that the notice could not be attended due to an email-related issue in receiving and accessing the communication and that the non-compliance was neither deliberate nor intentional. It was further contended that the application was rejected without recording any adverse finding regarding the trust’s objects or the genuineness of its charitable activities. The Departmental Representative did not oppose restoration of the matter.
Tribunal’s Findings
The Tribunal observed that the rejection was primarily based on non-compliance with the notice and that the CIT(E) had not examined the application on merits or recorded any conclusive adverse finding regarding the charitable nature of the objects or genuineness of the activities. Considering the explanation and the Revenue’s no-objection, the Tribunal held that the assessee deserved another effective opportunity.
Final Ruling
The ITAT set aside the order dated 01.03.2026 and restored the application to the CIT(E) for fresh adjudication after granting a reasonable opportunity of hearing. The assessee was directed to cooperate and furnish the required documents. The Tribunal clarified that it had expressed no opinion on the merits. The appeal was allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
This appeal filed by the assessee is directed against the order dated 01.03.2026 passed by the learned Commissioner of Income Tax (Exemptions), Mumbai [hereinafter referred to as “CIT(E)”], in Form No. 10AD, whereby the application filed by the assessee in Form No. 10AB under section 12A(1)(ac)(ii) of the Income-tax Act, 1961[hereinafter referred to as “the Act”], seeking renewal of registration under section 12AB of the Act, was rejected.
2. The assessee has raised the following grounds of appeal:
1. The Ld. CIT (Exemptions), Mumbai, erred in law and on facts in rejecting the application for renewal of registration u/s 12AB of the Act filed by the Appellant in Form No. 10AB dated 30.09.2025 under section 12A (1) (ac) (ii) of the Income-tax Act, 1961 vide rejection order dated 01.03.2026 mechanically without proper application of mind, as no specific defects or deficiencies have been pointed out in the order apart from general observation of non-compliance.
2. The Ld. CIT (Exemptions), Mumbai, erred in law and on facts in holding that the application was incomplete and that the Appellant failed to furnish requisite documents, without appreciating that the Appellant had enclosed the supporting documents with the application for registration.
3. The rejection order is arbitrary as it ignores the genuine charitable nature of the Appellant’s activities and objects without appreciating that the Appellant Trust was formed on 21.03.1992. It was originally registered u/s 12A of the Act vide registration Certificate No. TR/29404 dated 04.11.1993. The Ld. CIT (Exemptions), Mumbai, failed to provide sufficient opportunity of being heard, and the rejection solely on alleged non-compliance to notice dated 07.01.2026, which was missed out through oversight.
4. The Ld. CIT (Exemptions), Mumbai erred in law and on facts in rejecting the application merely on procedural non-compliance without examining or recording any adverse finding regarding the objects of the trust or the genuineness of its activities, which are the primary conditions mandated under the Act.
5. The Ld. CIT (Exemptions), Mumbai erred in law and on facts that the rejection of registration defeats the very object of the beneficial provisions of section 12AB and is contrary to settled judicial principles that procedural lapses should not defeat substantive rights.
3. The relevant facts, as emanating from the impugned order, are that the assessee filed an application in Form No. 10AB on 30.09.2025 under section 12A(1)(ac)(ii) of the Act, seeking renewal of registration under section 12AB of the Act. On verification of the application, the learned CIT(E) observed that the application was incomplete and that all the documents required to accompany the application had not been furnished. Accordingly, a notice dated 07.01.2026 was issued to the assessee, requiring it to furnish the complete set of documents and details prescribed under Rule 17A(2) of the Income-tax Rules, 1962.
4. According to the learned CIT(E), the assessee did not comply with all the requirements of the said notice. The learned CIT(E) observed that registration under section 12AB was required to be considered in terms of section 12AB(1)(b) of the Act after arriving at satisfaction regarding the objects of the trust or institution, genuineness of its activities and compliance with such other laws as were material for achieving its objects. In the absence of the requisite compliance, the learned CIT(E) held that he was unable to arrive at the necessary satisfaction on the aforesaid parameters. The application seeking renewal of registration under section 12AB was, therefore, rejected by order dated 01.03.2026 on the ground of non-compliance with the terms of the notice issued to the assessee.
5. Before us, the learned Authorised Representative (AR) submitted that the assessee had filed the application in Form No. 10AB along with the requisite supporting documents. It was submitted that the notice dated 07.01.2026 could not be attended to due to an email-related issue in the receipt and access of the communication. The non-compliance was stated to be neither deliberate nor intentional.
6. The learned AR further submitted that the learned CIT(E) had rejected the application merely on account of procedural non-compliance without pointing out any specific defect in the objects of the assessee or recording any adverse finding regarding the genuineness of its charitable activities. He, therefore, prayed that the impugned order be set aside and the matter be restored to the file of the learned CIT(E) for fresh consideration after granting a reasonable opportunity of hearing to the assessee.
7. The learned Departmental Representative relied upon the impugned order passed by the learned CIT(E). However, he did not raise any objection to the matter being restored to the file of the learned CIT(E) for fresh adjudication in accordance with law.
8. We have considered the rival submissions and perused the material available on record. The application filed by the assessee has been rejected primarily on account of its failure to comply with the notice dated 07.01.2026 and to furnish the documents and details required under Rule 17A(2) of the Income-tax Rules, 1962. The learned CIT(E) has not examined the application on merits or recorded any conclusive adverse finding regarding the charitable nature of the objects or genuineness of the activities of the assessee.
9. The explanation of the assessee is that the notice could not be attended to due to an email-related issue in receiving and accessing the communication. Considering the explanation furnished by the assessee, and having regard to the fact that the learned Departmental Representative has not objected to restoration of the matter, we are of the considered view that the assessee deserves one more effective opportunity to furnish the requisite documents and place its case before the learned CIT(E).
10. We, therefore, set aside the impugned order dated 01.03.2026 and restore the application to the file of the learned CIT(E) for fresh adjudication in accordance with law. The learned CIT(E) shall afford a reasonable and effective opportunity of hearing to the assessee and shall consider the documents and explanations furnished by it before passing a speaking order.
11. The assessee is also directed to cooperate with the proceedings and furnish all the documents and details that may be called for by the learned CIT(E) within the time allowed. We clarify that we have not expressed any opinion on the merits of the application, and all issues are left open for examination by the learned CIT(E) in accordance with law.
12. In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 30.06.2026.
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