B.D. Bansal Vs A.O. (Exemption) (ITAT Amritsar)
The assessee filed appeals before the Income Tax Appellate Tribunal, Amritsar Bench, challenging the order dated 18.03.2026 passed by the Commissioner of Income Tax (Exemption), Chandigarh, rejecting its application for registration in Form 10AB under Section 12A(1)(ac)(ii) of the Income Tax Act, 1961, and the consequential rejection of approval under Section 80G.
The assessee contended that the impugned order was bad in law because no proper show cause notice specifying the proposed grounds of rejection or adverse inference had been issued, resulting in a violation of the principles of natural justice. It was further argued that the Commissioner wrongly equated the absence of charitable activities with lack of genuineness, a test which, according to the assessee, was not contemplated under the Act.
The record showed that the application for renewal of registration under Section 12AB had been rejected on the ground that the assessee failed to establish the genuineness of its activities. The Commissioner observed that the trust’s income consisted of interest earned on bank fixed deposits, which had been accumulated over the years without being applied for charitable purposes. The order further recorded that there was no evidence of application of income towards relief of the poor, education, medical relief, or advancement of any other object of general public utility, and therefore the conditions for availing exemption were not satisfied.
