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Judgment
PER AMITABH SHUKLA, AM,
This appeal by the assessee is directed against the order of the Ld. Commissioner of Income Tax(Exemption), New Delhi [hereinafter referred to as ‘ld. CIT(E)] dated 03.09.2025 passed under section 12AB(1)(b)(ii) of the Income Tax Act, 1961, for the Assessment Year 2025-26. The word ‘Act’ herein this order would mean Income Tax Act, 1961.
The assessee has raised following grounds of appeal:-
1.That the learned Commissioner of Income-tax (Exemption) erred in law and on facts in rejecting the appellant’s application for registration under section 12AB and in cancelling the provisional registration, without properly appreciating the charitable nature of the appellant’s objects and activities.
2.That the impugned order is arbitrary, bad in law and void ab initio, as no satisfaction has been recorded regarding the alleged non-genuineness of activities, which is a mandatory requirement under section 12AB.
3.That the learned CIT(E) failed to consider the replies and material already available on record and proceeded merely on assumptions and presumptions.
4.That adequate and effective opportunity of being heard was not granted to the appellant, resulting in violation of the principles of natural justice.
5.That the cancellation of registration is beyond the scope and intent of section 12AB, as the order does not establish any adverse material against the appellant.
At the outset, we have noted that the Registry has identified the delay of 44 days in this case for filing of appeal. Justifying the delay, the appellant had submitted that due to bona fide and unavoidable reasons including administrative constraints and delay in obtaining professional advice, the appeal could not file in time. Thus, it was argued that the delay is not intentional. We are conscious that no litigant gains by delay its matter. The Ld. DR did not seriously object to the condonation of delay. Delay of 44 days in filing of the assessee’s instant appeal is condoned in larger interest of justice and in light of Hon’ble Apex court decision in the case of Collector, Land & Acquisition vs. Mst. Katiji & Others (1987) 167 ITR 471 (SC).
We have heard rival submissions in the light of material available on records. We have noted from the impugned orders of Ld. CIT(E) that the appellant was required to file documents in support of its claims which were not provided. We have noted that the ld. CIT(E) had issued notices dated 21.04.2025, 04.08.2025, 12.08.2025 and 18.08.2025 which were not admittedly complied by the assessee. The Ld. CIT(E) proceeded to draw adverse conclusions and rejected the applications.
Brief facts of the case are that the appellant assessee is a charitable institution engaged in charitable and welfare activities, including educational and safety-related activities functioning on a non-profit basis since its inception. The ld. Counsel for the assessee submitted that the appellant was granted provisional registration earlier and thereafter filed an application for regular registration under section 12A(1)(ac)(vi) of the Act. The application was processed by the Ld. CIT(E), Delhi and an order dated 03.09.2025 was passed in Form No. 10AD, whereby the application for registration under section 12AB(1)(b)(ii)(B) was rejected and the earlier provisional registration was also cancelled. It was submitted by the ld. Counsel for the assessee that the rejection has been made on the alleged ground of non-submission of certain details and documents, without recording any clear finding that the activities of the appellant are non-genuine or not in accordance with its charitable objects. The ld. Counsel for the assessee submitted that the impugned order is mechanical, non-speaking and violative of the principles of natural justice. The learned CIT(E) has failed to appreciate that at the stage of registration, only prima facie satisfaction regarding chantable objects and genuineness of activities is required.
The ld. DR argued in favour of the order of the lower authority.
We note that the Ld. CIT(E) issued notices dated 21.04.2025, 04.08.2025, 12.08.2025 and 18.08.2025, calling for information and the assessee could not file any submission, details and documents. Hence, the ld. CIT(E) rejected the registration and passed the order ex-parte and dismissed the appeal of the assessee. The ld. Counsel however requested for one last chance and assured that compliance would now be made. Be that as it may be, in the interest of justice, we deem it appropriate to remit the issues back to the Ld. CIT(E) for re-adjudication of the matter after providing due opportunity of being heard to the assessee. It shall be bounden upon the assessee to comply with all the statutory notices issued by the Ld. CIT(E ) and any non-compliance shall be viewed adversely. Accordingly, the appeal filed by the assessee is allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes.