Case Law Details
Vagad Visha Oswal Murtipujak Jain Sangh Vs CIT (Exemptions) (ITAT Mumbai)
The Income Tax Appellate Tribunal, Mumbai, considered the assessee’s appeal against the order dated 12.02.2026 passed by the Commissioner of Income Tax (Exemptions) [CIT(E)] in Form No. 10AD under Section 12AB read with Section 12A(1)(ac)(ii) of the Income-tax Act, 1961, rejecting the assessee’s application in Form No. 10AB for renewal of registration under Section 12AB.
The assessee challenged the rejection on the ground that it was based solely on the alleged non-submission of a self-certified copy of the registration certificate granted under Section 12A/12AA under the earlier regime. The assessee contended that the certificate had already been furnished electronically and that non-submission of a physical copy did not negate the existence of its earlier registration, which was verifiable from departmental records.
The facts recorded by the Tribunal show that the assessee filed Form No. 10AB on 23.09.2025 seeking renewal of registration. During the proceedings, the CIT(E) issued a notice calling for documents prescribed under Rule 17A. According to the CIT(E), although the assessee furnished certain details through its reply dated 04.02.2026, it failed to furnish the self-certified copy of the earlier registration certificate under Section 12A/12AA. On that basis, the CIT(E) concluded that the assessee had failed to establish the existence of a valid registration prior to 01.04.2021 and further held that the registration granted under Form No. 10AC under the amended regime itself could not be regarded as valid. Consequently, the renewal application was rejected.
Before the Tribunal, the Authorised Representative submitted that the impugned order proceeded on an incorrect factual premise. It was argued that, through a letter dated 27.01.2026 filed on the Income Tax portal under Acknowledgement No. 298071671270126, the assessee had already furnished the earlier registration certificate along with supporting documents. It was also submitted that the trust had been registered under Section 12A since 04.06.2001 and had furnished copies of the earlier registration certificate, the registration in Form No. 10AC under the amended regime, and the Charity Commissioner registration certificate. The assessee further stated that it had regularly filed returns of income together with audited financial statements, schedules and acknowledgements for Assessment Years 2022-23 to 2025-26.
The assessee also submitted that only one notice had been issued by the CIT(E), which had been duly complied with, and that no further notice identifying any deficiency was issued before rejecting the application. It was argued that, since the proceedings were not becoming time-barred, another opportunity should have been granted to cure any deficiency and that rejection without confronting the assessee with the alleged defect violated the principles of natural justice. The Departmental Representative relied upon the impugned order but stated that there was no serious objection if the matter was restored to the CIT(E) for fresh consideration after granting adequate opportunity.
After considering the rival submissions, the Tribunal found that the rejection was founded primarily on the finding that the assessee had failed to furnish the earlier registration certificate under Section 12AA. The Tribunal noted that the assessee had specifically asserted that the certificate had already been furnished electronically and had produced documentary evidence in support of that assertion, but this factual controversy had not been examined in the impugned order.
The Tribunal also found merit in the assessee’s grievance that no further notice pointing out the alleged deficiency had been issued after receipt of the assessee’s reply. It observed that if any document was unavailable, illegible or otherwise deficient, elementary principles of natural justice required that the deficiency be specifically communicated before adverse civil consequences were imposed. According to the Tribunal, any technical omission could have been cured by granting a further opportunity, particularly when sufficient time remained for completion of the proceedings.
The Tribunal further observed that certain remarks made by the CIT(E) regarding the registration mechanism introduced through the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 were unwarranted. It noted that the mechanism of granting registration through CPC in Form No. 10AC formed part of the statutory framework enacted by Parliament and implemented by the Central Board of Direct Taxes, and therefore comments on that statutory mechanism were neither necessary nor appropriate while deciding a renewal application.
The Tribunal also held that the observations in the impugned order declaring the registration already granted in Form No. 10AC to be “invalid in law” travelled beyond the jurisdiction of the CIT(E). It observed that while considering an application for renewal under Section 12AB, the CIT(E) could not sit in appeal over or declare invalid an existing registration already granted under the statutory scheme. Any cancellation, withdrawal or other consequence concerning an existing registration had to be undertaken only in accordance with the procedure and jurisdiction prescribed under the Act. The Tribunal further observed that the validity of the earlier registration could not be made the sole basis for rejecting the renewal application in the manner adopted.
Considering the assessee’s assertion that the relevant documents had already been furnished, the absence of any further opportunity to remove the alleged defect, and the Departmental Representative’s lack of objection to restoration, the Tribunal held that the interests of justice would be served by setting aside the impugned order.
Accordingly, the Tribunal set aside the order dated 12.02.2026 and restored the matter to the file of the CIT(E) for fresh adjudication in accordance with law. It directed the CIT(E) to verify the documents already furnished by the assessee, permit the assessee to file any additional documents that may be required, grant adequate opportunity of hearing, and thereafter pass a reasoned speaking order strictly in accordance with the provisions of the Act, uninfluenced by the observations made in the earlier order regarding the validity of the registration already granted under Form No. 10AC. The appeal was allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
This appeal is directed against the order dated 12.02.2026 passed by the Commissioner of Income Tax (Exemptions), Mumbai [“CIT(E)”]in Form No.10AD under the provisions of section 12AB read with section 12A(1)(ac)(ii) of the Income-tax Act, 1961 [“the Act”], whereby the application filed by the assessee in Form No.10AB seeking renewal of registration under section 12AB came to be rejected.
2. The assessee has raised the following grounds of appeal:
1. Whether the Commissioner of Income Tax (Exemption) is correct in law and in fact in denying the registration under Section 12AB on the ground of non-submission of a physical/self-certified copy of the old certificate under Section 12AA (old regime), and whether such non-submission justifies the rejection of the renewal of registration.
1.1 At the time of submission of response 12AA(old regime) certificate submitted online but during physical submission due to oversight 12AA(old regime) certificate was not submitted physically.
1.2 Non-submission of a physical/self-certified copy of the old certificate does not negate the fact that: The registration existed, and the same was submitted online and verifiable from departmental records.
1.3 The trust has demonstrated its eligibility for registration under the new regime and complied with all other documentation requirements. The rejection on the grounds of non-submission physically of the old certificate is, therefore, not justified in law.
2. The assessee craves leave to add, amend and/or alter any of the above grounds of appeal.
3. The brief facts are that the assessee trust filed an application in Form No.10AB on 23.09.2025 under section 12A(1)(ac)(ii) seeking renewal of registration under section 12AB. During the course of proceedings, the learned CIT(E) issued a notice calling upon the assessee to furnish various documents prescribed under Rule 17A. According to the learned CIT(E), although the assessee furnished certain details vide reply dated 04.02.2026, it failed to furnish the self-certified copy of the registration certificate granted under section 12A/12AA under the old regime. Proceeding on the said premise, the learned CIT(E) concluded that the assessee had failed to establish that it possessed a valid registration under section 12AA prior to 01.04.2021 and, therefore, held that the registration granted in Form No.10AC under section 12AB itself could not be regarded as valid. Consequently, the application for renewal was rejected.
4. The learned Authorised Representative (AR) submitted that the entire foundation of the impugned order proceeds on an erroneous factual assumption. It was submitted that vide letter dated 27.01.2026, filed on the Income Tax portal under Acknowledgement No. 298071671270126, the assessee had already furnished the registration certificate granted under the old regime together with other supporting documents. It was further submitted that the trust has been enjoying registration under section 12A since 04.06.2001, copies whereof were placed before the learned CIT(E). The registration certificate in Form No.10AC issued under the amended regime as well as the registration certificate issued by the Charity Commissioner were also furnished.
5. The learned AR further submitted that the assessee has been regularly filing its return of income and has also furnished audited financial statements, schedules and acknowledgements of returns for Assessment Years 2022-23 to 2025-26. It was argued that the learned CIT(E) had issued only one notice, which was duly complied with by the assessee. No subsequent notice pointing out any deficiency was ever issued. Therefore, before rejecting the application on 12.02.2026, the learned CIT(E) ought to have granted a further opportunity, particularly when the matter was not becoming time barred. According to the learned AR, the action of rejecting the application without confronting the alleged deficiency amounts to violation of the principles of natural justice. The learned AR accordingly prayed that the impugned order be set aside and the matter be restored to the file of the learned CIT(E) for fresh adjudication.
6. The learned Departmental Representative relied upon the reasoning contained in the impugned order. However, he fairly submitted that he has no serious objection if the matter is restored to the file of the learned CIT(E) for fresh consideration after granting adequate opportunity to the assessee.
7. We have carefully considered the rival submissions and perused the material placed before us.
8. We find that the rejection of the assessee’s application is primarily founded upon the finding recorded in paragraph 3.4 of the impugned order that the assessee failed to furnish the earlier registration granted under section 12AA and, therefore, the validity of the registration granted in Form No.10AC could not be established. The assessee, on the other hand, has specifically asserted that the registration certificate under the old regime had already been furnished electronically along with its reply dated 27.01.2026 and has also produced documentary evidence in support thereof. This factual controversy has not been examined in the impugned order.
9. We also find merit in the grievance of the assessee that after receipt of the reply furnished by the assessee, no further notice pointing out the alleged deficiency was issued. If according to the learned CIT(E), any particular document was either not available or was not legible or was otherwise deficient, elementary principles of natural justice required that such deficiency should have been specifically communicated to the assessee before visiting it with adverse civil consequences. A technical omission, assuming there was one, could have been easily cured by granting a further opportunity, particularly when sufficient time was available for completing the proceedings.
10. We are constrained to observe that certain observations made by the learned CIT(E) in the impugned order are also not in consonance with the statutory framework governing registration under section 12AB.
11. In paragraph 3.2 of the impugned order, the learned CIT(E) has extensively commented upon the amended registration regime introduced by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, observing that CPC, Bangalore granted registrations in Form No.10AC “without any verification and human intervention”. These observations, in our considered opinion, are wholly unwarranted. The mechanism of granting registration through CPC in Form No.10AC is not an administrative irregularity but forms an integral part of the statutory scheme consciously enacted by Parliament and implemented by the Central Board of Direct Taxes. The nature and manner in which such registration is granted is the consequence of the statutory architecture itself. Therefore, while adjudicating an application for renewal, it was neither necessary nor appropriate for the learned CIT(E) to comment upon the wisdom or functioning of the statutory mechanism devised by the Legislature and implemented by the Department.
12. We further find that the observations recorded in paragraphs 4 and 5 of the impugned order travel beyond the jurisdiction vested in the learned CIT(E). Having accepted that the assessee had already been granted registration in Form No.10AC, the learned CIT(E), while considering an application for renewal under section 12AB, could not have declared that such registration itself was “invalid in law” or that the assessee’s regular registration under section 12AB could not be treated as valid. No provision of the Act confers jurisdiction upon the learned CIT(E), while dealing with an application for renewal, to sit in appeal over or declare invalid a registration already granted under the statutory scheme. If the Act contemplates cancellation, withdrawal or any other consequence regarding an existing registration, the same has to be undertaken strictly in accordance with the procedure and jurisdiction prescribed under the Act. Such a declaration could not have been made incidentally while deciding an application for renewal.
13. We are also unable to appreciate the observation that the assessee was required to establish the validity of the registration already granted under Form No.10AC. Once the Department itself had issued registration in accordance with the statutory scheme, the learned CIT(E) was required to examine the application within the confines of the powers conferred under section 12AB. The validity of the earlier registration could not have been made the sole basis for rejecting the renewal application in the manner adopted in the impugned order. The approach adopted in the present case does not inspire confidence in the fairness of the decision-making process adopted by the learned CIT(E).
14. Considering the entirety of the facts and circumstances, particularly the assertion of the assessee that the relevant documents had already been furnished, the absence of any further opportunity to cure the alleged defect, and the fact that even the learned Departmental Representative has not objected to restoration of the matter, we are of the considered view that the interests of justice would be adequately served by setting aside the impugned order and restoring the matter to the file of the learned CIT(E).
15. Accordingly, we set aside the order dated 12.02.2026 passed by the learned CIT(E) and restore the matter to his file for adjudication afresh in accordance with law. The learned CIT(E) shall verify the documents already furnished by the assessee, permit the assessee to furnish any further documents that may be required, provide adequate opportunity of being heard, and thereafter pass a reasoned speaking order strictly in accordance with the provisions of the Act, uninfluenced by any observations made in the earlier order regarding the validity of the registration already granted under Form No.10AC.
16. In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 30.06.2026.
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