Aviraldhaani Foundation Vs CIT(Exemption) (ITAT Ranchi)
Assessee, a non-profit company filed Form 10AB seeking regular registration u/s 12AB(1)(b) (sub-clause (iii) of clause (ac) of s.12A).
CIT(E)’s findings:
- In MOA, main object clause allowed company to undertake “any other activities” not specifically laid down.
- This gave unfettered powers, inconsistent with s.12AB(4) which mandates activities must conform strictly to stated objects.
- Held that such vague, overreaching objects made assessee ineligible.
- Consequently, rejected regular registration and also cancelled provisional registration earlier granted in Form 10AC (dated 18.10.2022).
Assessee’s Appeal
- Appealed before ITAT against rejection of registration & cancellation of provisional approval.
- At hearing, no one appeared; only adjournment request filed.
Tribunal’s Observations
- CIT(E) was justified in questioning the broad object clause.
- However, in interest of justice & fair play, matter should be remanded.
- Directed assessee to:
Furnish supporting documents.
Amend/clarify objects to address queries of CIT(E).
- CIT(E) to re-examine afresh after giving reasonable opportunity of hearing.
Tribunal’s Decision
- Order of CIT(E) set aside.
- Matter restored to CIT(E) for fresh adjudication.
Charitable registration u/s 12AB can be denied if MOA contains vague “any other activity” clauses that give unrestricted powers. However, ITAT emphasizes principles of natural justice-assessee must be given a chance to correct/clarify objects before denial becomes final.
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