Case Law Details
AIP Reddy Mahajanasangha Vs CIT (ITAT Bangalore)
The assessee appealed against the order of the Commissioner of Income Tax (Exemption) rejecting its application for registration under Section 12AB of the Income-tax Act, 1961 in Form No. 10AD.
The assessee had filed Form 10AB seeking registration under Section 12AB. During the proceedings, the Commissioner of Income Tax (Exemption) called upon the assessee to furnish necessary details to establish the genuineness of the trust’s activities. However, only partial details were furnished. The Commissioner held that the assessee had failed to discharge the onus of substantiating the genuineness of its activities and demonstrating its entitlement to registration under Section 12AB, and accordingly rejected the application.
Before the Tribunal, the assessee submitted that, due to unforeseen circumstances, it could not furnish complete details and supporting evidence before the Commissioner. It stated that it was now in possession of all relevant documents and was ready to produce them if one more opportunity was granted. The assessee requested that the matter be restored to the Commissioner of Income Tax (Exemption) for fresh consideration in the interest of justice and fair play.
The Departmental Representative did not object to restoring the matter to the Commissioner for fresh consideration in accordance with law.
After considering the rival submissions and the material on record, the Tribunal observed that the application for registration had been rejected mainly on account of non-furnishing of complete details and supporting evidence. It also noted the assessee’s submission that it was ready and willing to furnish all relevant documents required for examining the genuineness of its activities.
The Tribunal held that the provisions relating to registration under Section 12AB are beneficial provisions and that the assessee’s claim should ordinarily be examined on merits after granting a reasonable and effective opportunity. It further observed that the principles of natural justice require that the assessee be afforded one more opportunity to substantiate its claim by furnishing all necessary details and evidence.
Accordingly, in the interest of justice and fair play, the Tribunal set aside the impugned order of the Commissioner of Income Tax (Exemption) and restored the matter for fresh adjudication. It directed the assessee to furnish all requisite details, documents and evidence as may be called for, and directed the Commissioner to examine the application afresh in accordance with law and pass a speaking order after providing the assessee with an adequate opportunity of being heard.
The appeal was allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
The present appeal, filed at the instance of the assessee, is directed against the order of the Learned Commissioner of Income Tax [ Exemption] (hereafter- ld. CIT(E)) in Form No. 10AD rejecting the application of registration under section 12AB of the Income Tax Act, 1961.
2. The facts in brief are that the assessee filed Form 10AB for approval of registration under section 12AB of the Act. During the proceedings, the learned CIT(E) required the assessee to furnish necessary details to establish the genuineness of the activity of the trust. However, the assessee only provided partial details. Thus, the learned CIT(E) held that the assessee failed to discharge the onus cast upon it substantiating the genuineness of its activity and demonstrating its entitlement for approval under section 12AB of the Act. Hence, the learned CIT(E) rejected the assessee’s application.
3. Being aggrieved by the order of the learned CIT(E), the assessee is in appeal before us.
4. The learned AR before us submitted that due to unforeseen circumstances, the assessee could not furnish complete details and supporting evidence before the learned CIT(E). It was further submitted that the assessee is now in possession of all the relevant documents and is ready to furnish the same if one more opportunity is granted. The learned AR therefore prayed that the matter may be restored to the file of the learned CIT(E) for fresh consideration in the interest of justice and fair play.
5. The learned DR on the contrary raised no objection if the matter is restored back to the file of the learned CIT(E) for fresh consideration as per law.
6. We have heard the rival contentions of both the parties and perused the materials available on record. We notice that the application of the assessee for registration under section 12AB of the Act came to be rejected mainly on account of non-furnishing of complete details and supporting evidences. At the same time, the assessee has submitted before us that it is now ready and willing to furnish all the relevant details and documents required for examining the genuineness of its activities.
6.1 In our considered opinion, the provisions relating to registration under section 12AB of the Act are beneficial provisions and the claim of the assessee should ordinarily be examined on merits after granting reasonable and effective opportunity. The principles of natural justice require that the assessee should be afforded one more opportunity to substantiate its claim for registration by furnishing all necessary details and evidence. Accordingly, in the interest of justice and fair play, we deem it appropriate to set aside the impugned order passed by the learned CIT(E) and restore the matter back to his file for fresh adjudication. The assessee is directed to furnish all the requisite details, documents and evidence as may be called for by the learned CIT(E). The learned CIT(E) shall thereafter examine the application of the assessee afresh in accordance with law and decide the issue by passing a speaking order after providing adequate opportunity of being heard to the assessee as per law. Accordingly, the ground of appeal of the assessee is allowed for statistical purposes.
7. In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in court on 13th day of May, 2026
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