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Judgment
Per Raj Kumar Chauhan, Judicial Member:
The appeals are directed against order of the Ld. CIT(E), Delhi, dated 12.09.2025 and 19.11.2025, wherein the application for r egistration u/s 12A(1)(ac)(i) of the Act, filed by the applicant on 08.01.2 025 in ITA No. 8261 & 8262/Del/2025, respectively alongwith request to the approval u/s 80G of the Act has been reje cted u/s 12AB(4) explanation (g) on the ground that the applicant being a new trust was required to apply under clause 12A(1)(ac)(iv) but has fraudulently obtained registratio n by applying u/s 12A(1)(ac)(i) of the Act and thus got section 12A registr ation for A.Y. 2022-23 to A.Y. 2026-27 dated 28.05.2021.
By this common order, we propose to decide the ITA Nos. 8261 & 8262/Del/2025 as the appellant is the same and facts are similar and accordingly in order to avoid the repetition, both the appeals are taken up together for disposal.
Aggrieved by the impugned ord er, the assessee is in appeal before us and has raised following grounds as under:
ITA N o. 8261/Del/2025:
“1 . The L d. Commissioner of Income Tax (Exemption) has erred i n la w and on facts in passing t he order whi ch i s illegal , impr oper and agai nst the pri nciples of natural justice.
2.The L d. Commissioner of Income Tax (Exemption) has e rred in law a nd on facts in pas sing the order without givi ng adequate opp ortunit y of bei ng heard and wi thout consideri ng the wri tten submissio n made befor e him .
3.The L d. Commissioner of Income Tax (Exemption) has erred i n law and on facts in canc elling 80G approv al from A.Y. 2022-23 onwards.
4.The L d. Commissioner of Income Tax (Exemption) has err ed i n law and o n facts i n passing appell ate order whic h c ontrar y to the facts and law.”
ITA N o. 8262/Del/2025:
“1 . The L d. Commissioner of Income Tax (Exemption) has erred i n la w and on facts in passing t he order whi ch i s illegal , impr oper and agai nst the pri nciples of natural justice.
2.The L d. Commissioner of Income Tax (Exemption) has e rred in law a nd on facts in pas sing the order without givi ng adequate opp ortunit y of bei ng heard and wi thout consideri ng the wri tten submissio n made befor e him .
3.The L d. Commissioner of Income Tax (Exemption) has er red i n law and on facts in cancelling 1 2AB registr ati on fr om A.Y. 2022-23 onwards.
4.The L d. Commissioner of Income Tax (Exemption) has err ed i n law and o n facts i n passing appell ate order whic h c ontrar y to the facts and law.”
We have heard the ld. AR for the assessee and Ld. DR for the Revenue and examined the impug ned order in both the appeals. The o nly conte ntion raised before us is that the Principle of Natural Justice has not been followed while passing the impugned order as no effective opportunity of hearing has been given when rejecting the registration u/s 12AB of the Act as well as u/s 80G of the Act. It is there fore prayed that matter may be restored to the file of the ld. C IT(E) for consider ing it afresh by giving opportunity of hearing and to permit to file necessary documents/submissions to show that the applicant has applied under the wrong provision inadvertently due to mistake of his tax consultant/law yer and not fraudulently. It is also submitted that to satisfy the ld. CIT(E), the assessee/applicant was require d to give op portunity to establish this fact even by filing the affidavit of the concerned person who had applied on behalf of the assessee under the wrong provisio n. It is further submitted that the assessee has not done any unjust enr ichment and had not violated any law by getting the registration u/s 12A of the Act and no pre judice is going to be caused to the Revenue in case the asse ssee is being given effective opportunity of hearing to satisfy the requirement of law as well as to establish the fact that the application was made under the wrong provision inadvertently and not fraudulently. The ld. DR o n the o ther hand while opposing the arguments and relying upon the ord er of the ld. CIT(E) would sub mit that sufficient opportunity was granted by the ld. C IT(E) and the assessee cannot be permitted to be rewarded for its deliberate/fraudule nt mistake and the provisional appr oval has been rightly cancelled and appeal is liable to be d ismissed.
We have co nsidered the rival submission and examined the impugned order. In order to find out whether effective opportunity of hearing has been granted before passing the impugned order by the ld . CIT( E), we deem it necessary to extract the following part o f the order of the ld. CIT(E), extracted below as under:
“4 . The Claus e(ac ) of sub section (1) to Section 12A was ins ert ed in t he Income Tax Act, vide Taxation and ot her Laws(TOLA) Act, 2020. As per this pr ovision, vari ous circumst ances have been enumerat ed under whic h an eligi ble a ssesse, may file for its 1 2A registr ati on. T he sub-claus e(i ), under whic h the asse sse has obtained its regist ration from A Y 2022-23 to 2026-27, is reproduced as under:
"(i ) wher e the tr ust or i ns titution is register ed under section 12A [as it st ood immediately before its amendment by t he Finance (N o. 2 ) Act, 1996 (33 of 1996)] or under secti on 12AA [as it stood immediatel y before its amendment by the Taxation and Other Law s (R elaxati on and Ame ndment of Certain Pr ovisions) Act , 2020 (38 of 2020)], withi n thr ee mont hs fr om the first day of April , 2021;“
5.The applicants unde r s ub-clauses(i) of clause(ac ) of sub- section (1 ) of section 12A were eligibl e for an aut omated registration for 5 years by CP C. Plai n reading of t he sub cl ause s hows t hat only thos e trus ts whic h were previously re gist ered u/s 12A(as existe d before Fi nance Act (No 2) 1996) or secti on 12AA( as it existed before TOLA Act, 2020)were eligibl e to apply under this sub clause A ne w tr ust was s uppos ed to apply under sub-claus e(vi)of cla use(ac) sub-s ecti on(l) of S ecti on 1 2A where t he CPC would have provide d a utomated registr ati on wit hout any enquiry for 3 assessment years. It is perti nent t o no te that the re gistratio n provided by CPC f or five years is without maki ng any enquiry , as only those t rusts are eligibl e to file under this secti on who hav e already obtained r egistrati on under ol d regi me, after verificati on done by conc erned Commissione r of Income Tax. H owever , t he applicant was not pr evi ously register ed unde r these secti ons (12A and 12AA) and was not eli gible.
6.The ass essee has claimed that it was because of ignora nce of law that it applied under wrong cla use. Ho wever, t he assessee failed t o understand that ignora nce of law is not an excuse & i t is requir ed to follow t he l aw in TOTO.
Similarly, its plea that its tax c ouns el has committed this mistake i s also not accepted, as the assessee itself is res ponsibl e for t he acts of its couns el and cannot shed its res ponsibility of f ollowi ng t he l aw by blaming its co unsel.
The ass essee has further relied upon decision of Tribunal in two cases. The same are not relevant as discus sed under:-
(i)Pre m Educational Trust vs. ITO (Exempti on) [2025] 176 taxmann.com 672 (Chennai -Trib.) [15 -07-2025]-He re, t he applicant was eligible to get 5 years registr ati on fr om CPC . But only got f or three years, because of filing under wrong clause. Thus ther e is no issue rega rdi ng verification of i ts ac tivities, as department ca n verify the sam e bef ore granti ng five ye ars re gistrati on However, the as sessee has obtai ned five years r egis tration wi thout its activiti es eve r being ve rified by C IT(E).
(ii)PSR S ustai nability Foundatio n vs . C ommissioner of Income-t ax(Exe mption) [2025] 179 taxmann. com 2 58 (Pune-Trib.) [06-10-2025]- Here a gai n the applica nt applicatio n was rejecte d on non-co mplianc es. Accordi ngly, it is not rel evant i n assessee’s case.
7.The assesse has thus obtai ne d its registrati on from AY 2022-23 to 2026-27 based on wrong i nformati on. As per Explanation (g)to S ecti on 12AB (4), specifi ed violation shall mea n “ the applica nt referr ed to in clause(ac) of sub-secti on(l ) of sec tion 12A is not c omplete or it contai ns fal se or incorrec t i nformation”.
Thus t he assesse has made specif ied viol ation as per claus e(g) to Explanati on to sub sect ion (4 ) of 12AB of IT Act as t he i gnorance o f law i s not an excus e and t he assessee is r esponsible for acts of its consultant/c ounsel .
8.In vi ew of the discussion above, submissi on of t he assessee a nd fac t of the case, the 12A registrati on of assesse, havi ng uni que registration num ber: ABECS7811HE20214 from AY 2022-23 to A Y 2026-27 dat ed 28.05.2021 is he reby ca ncelle d.”
It is thus evident from the above extracts of impugned order that nowhere the ld . CIT(E) has discussed the issue of inadvertent mistake raised by the applicant and the questio ns raised and submissions made has no t been decided while following the provisions of Section 250(6) of the Act. In order to prove the inadvertent mistake, as being claimed by the applicant, the assessee was required to file the nece ssary docume nt/affidavit of the tax consultant/advocate in order to establish by necessary evidence that the wrong provision was mentioned inadvertently by the said tax consultant/advocate. We have noticed that the ld. PCIT has arbitr arily p resumed that the applicant has obtained the provisional registration fraudulently and not due to inadvertent mistake by its tax consultant/ advocate. Moreover, w e are convinced that the issue involved was not decided with adequate reasons as is requirement of p rovision of Section 250(6) of the Act. From the above discussion, we are o f the considered opinion that the provision of section 250(a) as well as 250(6) of the Act has not been followed while passing the impugned order which resulted into miscarriage of justice. For the se reasons, the impugned order is set aside and the e nds of justice shall be met by remitting the file to the ld. CIT(E) for deciding the issue afresh after giving effective opportunity of hearing to the applicant to establish that the wro ng provision was used at the time of obtaining section 12A registration by the assessee inadvertently as is being claimed from the beginning during the proceedings before the ld. PCIT. The applicant is directed to submit all necessary documents including affidavit of the concerned person with regard to inadvertent mistake as is being claimed by the applicant within a period of 60 days from this order.
Bo th the appeals of the assessee are allowed for statistical purposes in above terms.