TaxTMI 
TaxTMI 
2026 (9) TMI 1319
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.... 10AD, in proceedings under section 12AB(1)(b)(ii) of the Income-tax Act, 1961 ["the Act"], whereby the application dated 28.02.2025 filed by the assessee in Form No. 10AB for registration under section 12A of the Act was rejected. 2. The assessee has raised the following grounds of appeal, which are reproduced verbatim: 1. On the facts and in the circumstances of the case and in law, the learned CIT (Exemptions) erred in rejecting the appellant's application for registration as a charitable institution, filed on 28/02/2025 in Form 10AB, by passing the impugned rejection order dated 27/09/2025 in Form 10AD. 2. The learned CIT (Exemptions) further erred in treating the mere filing of ITR-7 as conclusive proof of the ....
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....ection 10(23C) in any earlier year. The assessee was also required to furnish an affidavit and copies of the returns of income for the preceding years in support of its declaration that no such benefit had been availed. The assessee furnished an affidavit in response thereto. 5. The CIT(E), however, observed that the assessee had filed returns of income in Form ITR-7 for A.Ys. 2021-22 to 2024-25. According to the CIT(E), Form ITR-7 was filed by entities claiming exemption under sections 11 and 12 and, therefore, the assessee had availed the benefit of the said provisions during those assessment years. The CIT(E) held that this was contrary to the declaration made by the assessee in Form No. 10AB that, after commencement of its activities....
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....aimed, allowed or acted upon. It was contended that the assessee had consistently incurred a deficit or had income below the taxable limit and no part of its income had been excluded from total income by applying sections 11 and 12. The CIT(E) had neither referred to any relevant schedule of the returns of income, computation of income, intimation under section 143(1), assessment order under section 143(3), nor any other material demonstrating that exemption under sections 11 and 12 had actually been allowed to the assessee. According to the learned AR, the selection of a particular return form was a matter of procedural compliance and did not constitute conclusive proof of the actual availment of exemption. 9. The learned AR also conten....
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....ve commenced and no income or part thereof has been excluded from total income on account of the applicability of the specified provisions of section 10(23C) or sections 11 or 12 for any previous year ending on or before the date of the application. 12. It is, therefore, evident that the assessee's selection of section code 4A corresponded to section 12A(1)(ac)(vi)(B) of the Act. The reference made in the opening portion of the annexure to the impugned order to section "12A(1)(ac)(ivB)" is an apparent error. Code 4A does not correspond to any clause described as section 12A(1)(ac)(ivB). The correct statutory reference corresponding to code 4A is item (B) of section 12A(1)(ac)(vi). 13. However, the assessee's eligibility to apply under....
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...., or any other material demonstrating that any income of the assessee was actually excluded from total income by applying sections 11 or 12. The assessee, on the other hand, contends that it had consistently incurred a deficit or had income below the taxable limit and that no exemption had ever been claimed or allowed. The relevant returns, computations, intimations and assessment records are not presently available before us. The correctness of the rival factual assertions cannot, therefore, be conclusively determined on the material presently on record. 16. We further notice that the impugned order records the issuance of notices dated 19.05.2025 and 04.09.2025 and also refers, in paragraph 2.1, to a questionnaire dated 11.07.2025. The....
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....02425; (iii) determine, on the basis of such records, whether any income or part thereof of the assessee was actually excluded from total income by applying sections 11 or 12 or the specified provisions of section 10(23C); (iv) not treat the mere filing of returns in Form ITR-7, without examination of their contents and subsequent processing or assessment, as conclusive proof that the assessee had availed exemption under sections 11 and 12; (v) furnish to the assessee the material proposed to be relied upon and afford a reasonable and effective opportunity to furnish its explanation and supporting evidence; and (vi) thereafter decide the application afresh, by a speaking order, in accordance with the prov....