Facts of the Case

The assessee, Jhagru Baba Foundation, a charitable trust, filed an application in Form No. 10AB on 18.10.2024 seeking registration under Section 12A(1)(ac)(vi)(B) and approval under Section 80G of the Income-tax Act. The trust had earlier been granted provisional registration under Section 12A for Assessment Years 2022-23, 2023-24 and 2024-25. The CIT (Exemption), Kolkata rejected the application for regular registration and approval under Section 80G by order dated 27.06.2025. Aggrieved by the rejection, the assessee preferred an appeal before the Tribunal.

Issues Involved

Whether the rejection of the application for registration under Section 12A and approval under Section 80G without granting adequate opportunity to the assessee was justified, and whether the matter required restoration to the file of the CIT (Exemption) for fresh adjudication.

Petitioner’s Arguments

The assessee submitted that it is a genuine charitable trust engaged in charitable activities and had already been granted provisional registration under Section 12A. It was argued that the assessee was willing and able to furnish all documents and explanations as may be required by the CIT (Exemption) and therefore deserved one more opportunity. Reliance was placed on coordinate bench decisions of the Tribunal in Chintpurni Mandir (Braham Akhara), Prabandhak Committee and Mallarpur Naisuva, where in similar circumstances, matters were restored to the file of the CIT (Exemption) for fresh consideration.

Respondent’s Arguments

The Revenue supported the order of the CIT (Exemption) and contended that the rejection of registration and approval was justified based on the material available on record.

Court Order / Findings

The ITAT Kolkata considered the rival submissions and took note of the decisions of coordinate benches relied upon by the assessee. The Tribunal held that in the interest of justice, the assessee should be granted one more opportunity to represent its case and furnish necessary documents before the CIT (Exemption). The Tribunal accordingly set aside the order of the CIT (Exemption) and remanded the matter to his file for fresh adjudication of the application for registration under Section 12A and approval under Section 80G, after granting adequate opportunity of being heard and by passing a reasoned speaking order.

Important Clarification

The Tribunal clarified that while examining applications under Section 12A and Section 80G, the CIT (Exemption) is required to consider the objects and activities of the trust in a fair and judicious manner. Rejection of registration should not be mechanical and adequate opportunity must be afforded to the applicant trust to substantiate its claim.

Final Outcome

The appeal filed by the assessee was partly allowed for statistical purposes. The order passed by the CIT (Exemption), Kolkata rejecting registration under Section 12A and approval under Section 80G was set aside, and the matter was restored to his file for fresh adjudication in accordance with law.

Source Link - https://itat.gov.in/public/files/upload/1767269481-N5HaV4-1-TO.pdf

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