Snehi International Vs CIT (E) (ITAT Delhi)
12AB Registration Can’t Be Rejected by Ignoring Replies: ITAT Delhi Sets Aside Mechanical Denial by CIT(E)
The Delhi ‘E’ Bench of the ITAT, in Snehi International Vs. CIT(E), Delhi (ITA No.4997/Del/2025, AY 2025-26) & Snehi Education Society Vs. CIT(E), Delhi (ITA No.5000/Del/2025, AY 2025-26), vide order dated 17-12-2025, set aside the orders passed by the CIT(E) denying registration u/s 12AB and cancelling provisional registration earlier granted.
The Tribunal noted that the CIT(E) rejected the applications on the ground of alleged non-compliance and failure to furnish details to establish genuineness of activities, charitable objects and commencement of activities. However, the Assessees demonstrated, with documentary evidence placed in the paper book, that all requisite details, replies and supporting documents were duly filed in response to notices, including Form 10AB, trust deeds/MOA, registration certificates, returns, financial statements and e-proceeding acknowledgements.
The ITAT observed that the CIT(E) appears to have overlooked the material already on record and rejected the applications mechanically. As the denial was based on an incorrect assumption of non-compliance, and the Revenue had no serious objection to remand, the Tribunal held that interests of justice require reconsideration at the CIT(E) level.
Accordingly, the impugned orders u/s 12AB(1)(b)(ii)(B) were set aside, and the matters were restored to the file of the CIT(E) with a direction to pass fresh orders after examining the evidences on record and after providing adequate opportunity of being heard to the Assessees. Both appeals were allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT DELHI
These two appeals are filed by the different assessee’s of a same group in denying registration u/s.12AB of the Act. Both the assessees have raised the following common grounds against rejection of registration u/s.12AB of the Act by the Ld. CIT (Exemptions) [herein after referred as “CIT (E)”] :-
1. That the Ld. CIT(Exemption), Delhi has grossly erred in law as well as on facts in rejecting the application for registration of trust filed by assessee u/s 12A(1)(ac) (iv) of the Act and also cancelling provisional registration issued earlier, by passing an impugned order u/s 12AB(1)(b)(ii) (B) of the Income Tax Act. 1961. In doing so he has failed to notice that assessee is very old charitable society having various building/staff and incurred expenditure utilized for social and charitable activities.
2. That the 1.d. CIT(Exemption), Delhi has grossly erred in law as well as on facts in ignoring facts and circumstances of the case and rejecting the application for registration of trust on frivolous and unreasonable grounds.
3. That the order passed by the Ld. CIT(Exemption), Delhi is bad in law and required to be quashed as no show cause notice was given to the assessee during the course of proceeding and thereby violating the Principles of Natural Justice.
4. The above grounds of appeals are independent of and without prejudice to each other and further the appellant craves leave to 4 add, alter, amend OR withdraw all OR any grounds herein OR add any further grounds as may be considered necessary either before OR during the hearing of these grounds.
2. The Ld. Counsel for the assessee at the outset submitted that inspite of the assessee furnishing various documentary evidences called for by the Ld. CIT(E), the Ld. CIT(E) dismissed the application for registration u/s.12AB of the Act by observing that the assessee did not comply with the notices. Referring to page-3 of the order of the CIT(E), the Ld. Counsel submitted that the Ld. CIT(E) observed that the assessee failed to file details/ information required by the notices to verify the genuineness of the activities, charitable objects and commencement of activities and, therefore, application filed in form No. 10AB for grant of registration u/s.12A is rejected. Ld. Counsel for the assessee referring to paper book furnished, submitted that the assessee had filed all necessary information required by the Ld. CIT(E) and the Ld. CIT(E) probably overlooked before rejecting the application for grant of registration u/s.12AB of the Act. The Ld. Counsel for the assessee stated that the issue may be restore to the file of the Ld. CIT(E) for reconsideration of the application filed by the assessee in the light of the submissions and evidences furnished by the assessee.
