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Judgment
Per Raj Kumar Chauhan, Judicial Member:
The appeal is directed against the order dated 11.09.2025 of ld. CIT( Exemptions), Chandigarh where in the registration u/s 12A(1)(ac)(vi) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) has bee n re jected on the ground that the applicant could no t substantiate through independent reliable documentation about the activities engaged and financial propriety has not been followed by the applicant.
The applicant has applied u/s 12A(1)(ac)(vi)-ITEM(B) of the Act for registration and the ld. CIT(E) fo und that the docume nts provided by the applicant are no t sufficient for assessing the genuineness of the activities of the applicant. It was fur ther observed that it could not be verified from the availab le documents whe ther the applicant was complying with the objects mentioned in the memorandum of association or not.
We have heard the ld. AR and the ld. DR. The ld. AR at the very outset submitted that the applicant may be given one more opportunity to submit the necessary document and to explain the financial propriety duly followed by the applicant and matter may be restored to the file of the ld. CIT(E). Adjournment w as sought on behalf of the assessee on the ground that ld. CIT-DR was on leave. However, in view of the submissions made on behalf of the asse ssee, we have proceeded to ad judicate the matter in the intere st of justice. We have considered the submission. The observation of the ld. CIT(E) while rejecting the reg istration applicatio n in Form 10AB are extracted from para 3.2 to 5 as under:
“3.2Since, the transactions of the applicant are in cash o nly and the bills and vouchers submi tted by the applicant for expenses are either handmade or without GST number bills and vouchers, therefo re it raises question mark on the genuineness of the expenses and financial propriety. Infact the applicant has made cash withdrawals from the bank. The donatio ns also are entirely in cash.
4.O n perusal of the expenses of the activities submitted by the applicant, it has been observed that the applicant failed to substantiate the genuineness of the expense s/ activities. As per the scheme of the law, registration under section 12AB canno t be granted merely because some activity is being under taken. T he activities must be genuine, and more importantly, carried out in accordance with the stated objects of the society.
5 From the facts stated above, it is evident that the applicant is engaged in activities which are not substantiated through independent reliable docume ntation. The financial pr opriety is not being followed by the applicant. Therefore, the present application o f the applicant filed in Form 10AB u/s 12A(1)(ac)(vi) item B of the Act is hereby rejected, which also supersede any registration granted u/s 12AB of the Act by any authority at any earlier time.”
It is thus evident that the registratio n u/s 12A of the Act has been declined by the ld. CIT (E) on the grounds that the applicant engaged in activity has no t been substantiated thro ugh independent reliable documentation and financial propriety is no t followed by the applicant. The ends o f justice requires that assessee/applicant be given one more opportunity in order to do the substantial justice for filing all necessary docume nts and to explain the financial proprie ty duly follo wed in the matter before the ld. CIT(E). For these reasons, the matter is restored to the file of the ld. CIT(E) for deciding the application afresh after giving an effective opportunity of hearing and to d ecide the matter at the e arlie st.
In the result, the appeal of the assessee is allowed for statistical purposes.