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Judgment
Per Raj Kumar Chauhan, Judicial Member:
The appeals of the assessee are directed against two separate order even dated 30.09.2025 of the Ld. CIT(E), Delhi, wherein the application o f the assessee in Form 10AB for registration u/s 12A(1)(ac)(iii) of the Act sub ject matter of ITA No.8004/Del/2025 alongwith application in Form 10AB for approval u/s 80 G(5)(ii) of the Act subject matter of ITA No. 8003/Del/2025 were dismissed by the ld. CIT(E) on the ground that applicant has not submitted complete details required vide questionnaire dated 21.04.2025. While d ismissing the appeal, it was further observed that the assessee/applicant has failed to show the activities undertaken by the foundation co mes under the purvie w of char itable activity and the income applied outside India by the organizatio n was not having approval of the CBDT .
Aggrieved by the impugned order for denial of registration u/s 12A as well as u/s 80G of the Act asse ssee/applicant is in appeal before us and has raised the following grounds of appeal:
ITA No. 8003/Del/2025
“1 . That the L d. CIT (Exempti on) erred in la w and on facts i n reje cting the appellant’s applicati on i n Form 10AB for approval under sectio n 80G(5)(iii) of the Income-t ax Act, 1961, wit hout appreciating that the appellant is a duly r egi stered under S ecti on 8 of t he company act and e ngaged in bona fi de c harit abl e objects withi n the meani ng of sectio n 2 (15).
2.That t he Ld. CIT(E) erred i n conc ludi ng that t he appellant’s a ctivi ties l ike dialogues, lectur es and inte rac tive engagements with eminent personali ties are on “personal/i ndividual level” acti viti es and not charitabl e, i gnori ng t hat suc h programme were organi zed instituti onally to pr omote Indo-Fr ench cultural, educational and social cooperatio n, directly advanci ng an obj ec t of gene ral publ ic util ity.
3.That the fi nding of the L d. CIT(E) that activiti es conduc ted i n i ndoor/close d-door formats cannot be charitabl e is perverse , contra ry to se ttl ed judicial pri nciples , and fails to appreciate that the mode of deliv ery does not deter mi ne the charitable nat ure of an obj ec t.
4.That the Ld. CIT(E) er red i n law in holdi ng that “no charitabl e exp enditure ” was incurr ed, ignori ng administr ative e xpenses such as office running, professio nal fees, and statut ory audit, all of whi ch are dul y recogni zed as legi timat e ex pendi ture fo r c arryi ng on charitabl e o bjects duri ng the for mati ve s tage.
5.That the Ld. CIT(E) fail ed to appreciate that i n initial years o f es tablis hment , the extent of expendit ure or vol ume of activity cannot be a gr ound fo r r ejecti on of appr oval under s ecti on 80G, as co nsistently hel d by different Hi gh Co urt prec edents.
6.That the relianc e place d by CIT(E) on s ecti on 11(1)(c ) and CBD T approval for expenditure outside India is misplaced and premat ure, as the only i nquiry al the stage of 80G approval is t he genuineness of activities and t he charitabl e nature of objects, not the allowabili ty of exemption o r application o f i nco me.
7.That t he CIT(E) er r ed in tr eati ng the appellant’s res ponses as incompl et e despite the fact that all doc uments like MOA, activit y note, fi na ncials, bank stat ements. Form 10AC, and clarifications , whic h w ere dul y filed; there by rejecti ng the applicati on wi thout identifying any speci fic defect , i n violation of nat ural justice.
8.That t he o rder is non-speaking, mechanical, based on i ncorrect assumpti ons, and c ontrary to the statutory sche me of secti ons 12A/12AB/80G, which mandate onl y a prima facie v erification of objects and genui neness of activities.
9.That the learned CIT(E) further erred i n law in cancelli ng the appella nt’s vali d provisional 80G appro val (URN:AAEF7565N F20221), alt hough cancell ation is permissible only in circ ums tances expr essl y prov ided under section 80G(5 )(iii) read with Rul e 11AA and none of which exist i n the appellant’s case
10.That the entir e or der is arbitr ary, ul tra vires, contrary t o t he pri nciples laid down by C ourts and Tri bunals, and t herefore liable to be quashed.”
ITA No. 8004/Del/2025
“1 . That the Ld. CIT(Exempti on) erred both i n law and on facts in r eje cti ng the appellant's applicati on file d in Form 10AB for re gistration u/s 1 2A(1)(ac)(iii) of the Income-t ax Act, 1961 vide order dated 30.09.2025, without appreciating that the appellant is a duly incorporated u/s Secti on-8 of t he co mpany engaged in genui ne charitabl e activiti es within the mea ni ng of section 2 (15).
2.That the Ld. CIT(E) failed t o appreciat e that t he prima ry obj ects of t he appellant is of promoting Indo-Fr ench relati ons in the fi elds of art, culture, education, sports, finance and i nt ernatio nal cooperation which squar ely fall within “advancement of any other object of general public utility ' under s ection 2( 15) of the Act.
3.That the L d. CIT(E) grossly err ed in hol di ng that dialogues, conf erenc es and engagements wi th emine nt personalities do not constitut e chari tabl e activity and are “per sonal or individual in nature”, ignori ng that such programs wer e conduc ted i nstitutionally for public benefit, a wareness and cultural exchange, duly s upported by evide nce fi led.
4.That t he Ld. CIT(E) erred in concl udi ng that activities c onducted i ndo ors or i n cl osed-door s essions cannot be c haritable, whic h is contrary to the settled law tha t c haritable purpos e is determined by its objec t and impact. It can’t be decided on the mode, ve nue or audi e nce si ze.
5.That the Ld. CIT(E) erre d i n law i n concl udi ng that the appellant had no charitable expenditure, by disregardi ng the natur e of administr ati ve and operational expenditure i nc urred for carryi ng out objects of the tr ust, and by failing to appr eciate t hat i ni tial years of a newly formed organization may i nvolve low acti vit y or preparatory expendit ur e.
6.That t he fi ndi ng of the CIT(E) regar ding “activiti es in Franc e” and application o f sectio n 11(1 )(c) is l egally misco nceiv ed, premat ure and irrel evant at the registr ati on stage, whe re onl y the genuineness of activities and charitable objects ar e requir ed to be exami ned and not actual appl ication of income or allowa bility of ex empti on.
7.That the CIT(E) erred in importi ng requirements of CBD T approval under sec tion 11(1)(c), whic h is applicabl e only at t he time of ass essme nt a nd claim of exemption, not at the stage of grant of registratio n u/s 12 A.
8.That the L d. CIT (E) err ed in rej ecti ng the applicatio n on alleged “failure to furnis h details ”, d espi te the appellant having submitted all doc uments i ncl uding MOA, activity note , bank statements, fi nanci als, Form 10AC, and f urther explanati ons as called for.
9.That t he Ld. CIT(E) acted i n vi olati on of principl es of nat ural j ustice i n t reating the appellant’s res ponses as incomplet e without poi nti ng out specific deficienci es or providi ng a fair, effective oppor tunity to rebut adverse inferenc es .
10.That the Ld. C IT(E) erred i n law i n canc elling the appellants validly granted pr ovisional registration (URN: AAEF7565NE20221), despite the fact that suc h cancellation is not per missibl e except in sit uations enumerate d i n section 12AB (4 ), none of which exist in the present cas e.”
We have heard the ld. AR and Ld. DR. The ld. DR pointed out that the Trib unal may in its own discre tion to restore the matter to the ld. CIT( E) for deciding afresh after giving one more opportunity to satisfy the requirement of registration u/s 12A and approval u/s 80G of the Act. We have also heard ld. AR and examined the impugned order.
The only question before us is whether the impugned order has been passed after affording a reasonable opportunity of being he ard which is required for fresh registration u/s 12AB(1)(ac)(iii) of the Act. On perusal of the impugned order, we have no ticed that except para 1, the re maining order is same and Para 3 of both the orders is relevant for the question before us and is extracted below as under:
“3 . On perusal of the doc uments filed by t he applicant, it is noted that t he appl icant has not submitted compl ete details required vide questi onnaire dated 21.04.2025. He nce, further opportunity was afforded vide lette r dated 12.08.2025 to fi le the remai ni ng details and so me additi onal det ail s/clarificati on/documents by 18.08.2025. It was also m entioned that in c ase of failure, t he proc eedi ngs shall be decided on the basis of i nformati on availabl e on rec ord and no furthe r opportunity will be granted bei ng limitati on m atte r.”
It is thus evident from the extracts of par a 3 of the impugned order that an opportunity was afforded vide letter dated 12.08.20 25 for filing the remaining details of the additio nal documents and time given for compliance was only 6 days that is on or before 18.08.2025. On perusal of the entire order, there is nothing to ascertain when the said letter dated 12.08.2025 was sent to the assessee or by what mode. No thing is mentioned in the order as to whether the letter dated 12.08.2025 was ever served or received by the assessee/applicant. In view of these facts, we are convinced that the ld. CIT(E) has failed to afford a reasonable opportunity of being heard which is mandatory requirement of disposal of application u/ s 12AB o f the Act.
In these given facts and circumstance s, the matter is restored to the file of the ld. CIT(E) for granting reasonable opportunity of being heard to the assessee/applicant who is obliged to file the nece ssary details/docume nts/clarifications which are necessary for granting registr ation u/s 12AB of the Act as well and approval u/s 80G of the Act. The impugned orders are accor dingly set aside and the matter is restored to the file of the ld. CIT(E) for deciding the same afresh and to decide the question of approval and registration expeditiously by considering the material to be submitted by the assessee/applicant who shall submit the necessary details/document within a period of 30 days of this order. The appeals of the assessee are acco rdingly allowed for statistical purposes.
Bo th the appeals of the assessee are allowed for statistical purposes.