MEDENT UNICUS SOCIETY,TADIGADAPA V. INCOME-TAX OFFICER, EXEMPTION, RAJAHMUNDRY

ITA 164/VIZ/2025

AI Insights

Medeng Unicus Society, an educational institution, sought permanent registration under Sections 80G(5) and 12AB of the Income-tax Act, 1961, but faced rejections from the CIT(Exemptions), Hyderabad. The society appealed against these rejections, arguing that the CIT(Exemptions) had not provided cogent reasons for the denial and had issued a non-speaking order. The Tribunal found that the CIT(Exemptions) had indeed failed to provide a reasoned order, which vitiated the principles of natural justice, and thus set aside the CIT's decision, remanding the case for a fresh evaluation.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 669399 (ITAT-VISAKHAPATNAM)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside; Opportunity of being heard; Principle of natural justice
• Section: 12A; 80G

Judgement Text

"आयकर अपीलीय अधिकरण, विशाखापटणम पीठ में IN THE INCOME TAX APPELLATE TRIBUNAL Visakhapatnam Bench श्री रिीश सूद, माननीय न्याययक सदस्य एिं श्री एस. बालक ृष्णन, माननीय लेखा सदस्य SHRI RAVISH SOOD, HON’BLE JUDICIAL MEMBER AND SHRI BALAKRISHNAN. S, HON’BLE ACCOUNTANT MEMBER, I.T.A. Nos.163 and 164/Viz/2025 Medeng Unicus Society, Tadigadapa, Vijayawada PAN : AARAM0659D Vs. The Income Tax Officer, (Exemption), Rajahmundry. (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent) करदाता का प्रतततितित्व/ Assessee Represented by : Shri C. Subrahmanyam, C.A. राजस्व का प्रतततितित्व/ Department Represented by : Dr. Satyasai Rath, CIT(DR) सुिवाई समाप्त होिे की ततति/ Date of Conclusion of Hearing : 26.06.2025 घोषणा की तारीख/ Date of Pronouncement : 27.06.2025 O R D E R प्रतत रवीश सूद, जे.एम./PER RAVISH SOOD, J.M. The captioned appeals filed by the assessee society are directed against the respective orders passed by the Commissioner of Income- Tax (Exemption), [for short “CIT (Exemptions)”], Hyderabad, dated 13.02.2025, wherein the latter had declined the applications filed by the assessee society for registration under Section 80G(5) and 12AB of the 2 ITA Nos.163 and 164/Viz/2025 Medeng Unicus Society Income-tax Act, 1961 (in short ‘the Act’), respectively. Since, these appeals pertain to the same assessee society, therefore, the same are being taken up and disposed off by way of a consolidated order. 2. We shall first take up the appeal filed by the assessee society in ITA No.164/Viz/2025, wherein it has assailed the order passed by the CIT(Exemption), Hyderabad rejecting its application filed for permanent registration under Section 12AB of the Act. The assessee society has assailed the impugned order on the following grounds of appeal before us: “1. The order passed by the Commissioner of Income Tax (Exemptions) vide Form 10AD dt. 13.02.2025, regarding rejection of registration u/s 8OG, is bad in law and contrary to the facts and circumstances of the case. 2) The learned CIT (Exemptions) erred in rejecting the claim for registration u/s 80G of the IT Act in a summary and casual manner without substantiating the reasons for such refusal. 3) In any case, the learned CIT (Exemptions) ought not to have rejected the claim for registration u/s 80G without cogent and detailed reasons, especially when the trust's activities align with charitable objectives as outlined under the Act. 4) For these and other reasons that may be urged at the time of hearing, the appellant prays that the impugned order dated 13.02.2025 be set aside in the interest of justice, and direct the CIT(E) to grant registration u/s 80G of the IT Act.” 3. Succinctly stated, the assessee society that was incorporated on 03.08.2022 is engaged in running an educational institution. The assessee society was granted provisional registration under section 12A of the Act on 03.06.2024. Subsequently, the assessee society filed an 3 ITA Nos.163 and 164/Viz/2025 Medeng Unicus Society application in “Form 10AB” on 13.02.2025 seeking permanent registration under section 12AB of the Act. 4. During the course of the proceedings, the CIT(Exemptions) issued notices dated 10.10.2024 and 26.12.2024, wherein the assessee society was called upon to furnish the requisite information. In compliance, the assessee society filed its reply on 26.12.2024 and furnished the requisite details as were called for. However, the CIT(Exemptions), vide his impugned order rejected the application filed by the assessee society for permanent registration u/s 12AB of the Act. 5. Aggrieved, the assessee society has assailed before us the order passed by the CIT(Exemption) rejecting its application for permanent registration u/s 12AB of the Act. 6. We have heard the Ld. Authorized Representatives of both parties, perused the order of the CIT(Exemption) and the material available on record. 7. Shri. C. Subrahmanyam, Chartered Accountant – Ld. Authorized Representative of the assessee society, at the threshold of the hearing of the appeal, submitted that the CIT(Exemption) had based on a non- speaking order without giving any cogent and plausible reason rejected 4 ITA Nos.163 and 164/Viz/2025 Medeng Unicus Society the application filed by the assessee society for permanent registration u/s 12AB of the Act. Elaborating further on his contention, the Ld. AR submitted that the assessee society which is running an educational institution was provisionally registered under Section 12A of the Act, vide order dated 03.06.2024 for AY 2025-26 to AY 2027-28. The Ld. AR submitted that the assessee society had in “Form 10AB” applied for permanent registration u/s 12AB of the Act on 01.08.2024. The Ld. AR submitted that the CIT(Exemption) without giving any cogent reason had based on his vague observations rejected the application filed by the assessee society for permanent registration u/s 12AB of the Act. The Ld. AR submitted that though the assessee society had duly furnished the requisite details as were called for by the CIT(Exemption), but he had without giving any specific reason most arbitrarily rejected its application for permanent registration u/s 12AB of the Act. The Ld. AR vehemently submitted that the rejection of the application of the assessee society based on a non-speaking and cryptic order of the CIT(Exemption) cannot be sustained and is liable to vacated. 8. Per Contra, the Dr. Satyasai Rathi, Ld. CIT, DR relied on the order of the CIT(Exemption). However, the Ld. CIT, DR on being confronted by the fact that the CIT(Exemption) had failed to pass a speaking order, fairly admitted the said factual position. 5 ITA Nos.163 and 164/Viz/2025 Medeng Unicus Society 9. We have given thoughtful consideration to the contentions advanced by the Ld. Authorized Representatives of both parties in the backdrop of the order of the CIT(Exemption). 10. Ostensibly, the CIT(Exemption) based on a cryptic and non- speaking manner had rejected the application filed by the assessee society for permanent registration u/s 12AB of the Act. Elaborating on the reasons for rejecting the application of the assessee society, it is merely observed by him that the activities of the assessee society were not commensurate with the objectives as laid down in the registered deed/MOA/AOA. However, there is no specific finding or elaboration in the order as to which particular activities of the assessee society as per him were not found to be in accordance or commensurate with its stated objectives. 11. Further, we find that the CIT(Exemption) had observed in the impugned order that the assessee society had only filed a partial reply to the queries that were raised by him. However, again, there is no whisper in his order as to which all details the assessee society in response to the queries raised by him vide notice(s) dated 10.10.2024 and 26.12.2024 or otherwise, had not answered or inadequately addressed. In the absence of such particulars, the rejection order 6 ITA Nos.163 and 164/Viz/2025 Medeng Unicus Society passed by the CIT(Exemption) lacks the essential ingredients of a reasoned and speaking order, thereby vitiating the principles of natural justice. 12. We are, therefore, of the considered view that the matter deserves to be restored to the file of the CIT(Exemptions) for passing a fresh order in accordance with law. Needless to say, the CIT(Exemptions) shall in the course of the set-aside proceedings afford a reasonable opportunity of being heard to the assessee society and shall pass a detailed and speaking order after taking into consideration all the submissions made by the assessee society. 13. Before paring, we deem it appropriate to record our displeasure with the casual and non-judicious approach adopted by the CIT(Exemptions) in rejecting the application filed by the assessee society for registration under section 12AB of the Act. We are of the firm conviction that while exercising the quasi-judicial functions, it is incumbent upon the authorities to pass well-reasoned orders after duly considering all material on record. We say so, for the reason that a cryptic and non-speaking order not only undermines the sanctity of the process but also leads to unnecessary litigation. 7 ITA Nos.163 and 164/Viz/2025 Medeng Unicus Society 14. In view of the above, the impugned order passed by the CIT(Exemption) rejecting the application file by the assessee society for permanent registration u/s 12AB of the Act is set aside to his file with a direction to adjudicate the application afresh in accordance with law. Needless to say, the CIT(Exemption) shall in the course of the set aside proceedings afford a reasonable opportunity of being heard to the assessee society. 15. In the result, the appeal of the assessee society in ITA No.164/Viz/2025 is allowed for statistical purposes in terms of our aforesaid observations. ITA No.163/Viz/2025 16. As the facts and issues involved in the captioned appeal pertaining to the rejection of the assessee's application for registration u/s.80G(5) of the Act remain the same as were there before us in ITA No. 164/Viz/2025, therefore, the order therein passed while disposing of the said appeal shall apply mutatis-mutandis for disposing of the captioned appeal i.e., ITA No. 163/Viz/2025. 17. In view of the above, the impugned order passed by the CIT(Exemption) rejecting the application file by the assessee society for registration u/s 80G(5) of the Act is on the same terms set aside to his 8 ITA Nos.163 and 164/Viz/2025 Medeng Unicus Society file. Needless to say, the CIT(Exemptions) shall in the course of the set- aside proceedings afford a reasonable opportunity of being heard to the assessee society and shall pass a detailed and speaking order after taking into consideration all the submissions made by the assessee society. 15. In the result, the appeal of the assessee society in ITA No.163/Viz/2025 is allowed for statistical purposes in terms of our aforesaid observations. 16. Resultantly, both the appeals filed by the assessee society are allowed for statistical purposes in terms of our aforesaid observations. Order pronounced in the Open Court on 27th June, 2025. Sd/- (एस. बालक ृष्णन) (S. BALAKRISHNAN) लेखा सदस्य/ACCOUNTANT MEMBER Sd/- (रिीश सूद) (RAVISH SOOD) न्यायिक सदस्य/JUDICIAL MEMBER Sd/- Hyderabad, dated 27.06.2025. TYNM/sps 9 ITA Nos.163 and 164/Viz/2025 Medeng Unicus Society आदेशकी प्रतततिति अग्रेतषत/ Copy of the order forwarded to:- 1. तिर्ााररती/The Assessee : Medeng Unicus Society, 14-00388, Tulasi Nagar, Tadigadapa, Vijayawada – 520007, Andhra Pradesh, India. 2. राजस्व/ The Revenue : The Income Tax Officer, (Exemption), Rajahmundry. 3. The Principal Commissioner of Income Tax (Exemptions), Visakhapatnam 4. तवभागीयप्रतततितर्, आयकर अिीिीय अतर्करण, / DR, ITAT, Visakhapatnam. 5. गार्ाफ़ाईि / Guard file आदेशािुसार / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam "