SHRI MAHANT TAPONIDHI TATAMGIRI MAHARAJ DEVASTAHAN TRUST,SATARA vs. THE COMMISSIONER OF INCOME TAX (EXEMPTION), PUNE

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ITA 768/PUN/2023Status: DisposedITAT Pune28 November 20234 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(E) failed to follow the mandatory procedure of issuing a show-cause notice before rejecting the application and cancelling the provisional registration. This procedural lapse deprived the assessee of a reasonable opportunity to refute the negative findings.

What were the facts?

The assessee trust, holding provisional registration, applied for regular registration under Section 12A(1)(ac)(vi) of the Income Tax Act. The CIT(E) rejected the application and cancelled the provisional registration without providing the assessee an opportunity to be heard.

What were the issues?

Whether the CIT(E) followed the prescribed procedure by providing an opportunity of being heard before rejecting the application for registration and cancelling provisional registration.

Which sections of the Income-tax Act were involved?

Section 12A(1)(ac)(vi),Section 12AB(1)(B)(ii)(b)

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Income Tax Appellate Tribunal, PUNE ‘B’ BENCH, PUNE

Before: SHRI PARTHA SARATHI CHOUDHURY & SHRI G. D. PADMAHSHALI

For Appellant: Mr V S Potdar [‘Ld. AR’]
Pronounced: 28/11/2023

आदेश / ORDER PER G. D. PADMAHSHALI; The present appeal of the assessee impugned DIN & Order No. ITBA/EXM/F/EXM45/2023-24/1052456337(1) dt. 30/04/2023 passed by Ld. CIT(E) u/s 12A(1)(ac)(vi) of the Income Tax Act [‘the Act’ hereinafter].

2.

We have heard the rival contentions of both parties; subject to provisions of rule 18 of Income Tax Appellate Rules, 1963 [‘ITAT Rules’ hereinafter] perused material placed on records.

1.

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Shri Mahant Taponidhi Tatamgiri Maharaj Devastahan Trust

3. We note that; 3.1 The assessee is public trust registered u/s 50(3) of the Bombay Public Trust Act, 1950 [‘BPT Act’ hereinafter] as and has been holding a provisional registration u/s 12AB r.ws. 12A(1)(ac)(vi) of the Act since 04/04/2022.

3.2 For seeking regular registration the assessee trust filed an application to the respondent vide application No. CIT EXEMPTION. PUNE/2022- 23/12AA/13365 dt. 28/04/2022 in Form No.10AB under clause (iii) of section 12(1)(ac) of the Act.

3.3 By the impugned order, said application of the assessee trust was rejected by the Ld. CIT(E) with a categorical findings revolving around; (1) the assessee trust object is to act as the facilitator for providing education and for establishing employment opportunities (2) the assessee trust is aiming to setup variety of commercial activities under the guise of charitable activities (3) the assessee trust failed to establish ownership of Temple Property claimed to have acquired for the purpose of trust (4) substantial expenditure outflow was of religious nature.

3.4 Aggrieved by the impugned order, the assessee brought up this case challenging cancellation of provisional registration granted to it and denial for regular registration as an institution / fund u/s 12A(1)(ac)(iii) of the Act.

4.

After careful consideration of records, we observed that, in the opinion of the Ld. CIT(E) forgoing categorical de-fact were sufficient to cancel the ITAT-Pune Page 2 of 4

Shri Mahant Taponidhi Tatamgiri Maharaj Devastahan Trust provisional registration granted earlier and to reject the application of regular registration/approval. The matter of fact as solidified by the Ld. DR from para 3.1 and 3.2 of the impugned order r.w. point 10 placed at page 1 thereof that, while doing so, appellant wasn’t called upon to refute these negative findings based on which the application was turned down by the Ld. CIT(E).

5.

Note well, in terms of clause (B)(ii)(b) of sub-section (1) of section 12AB of the Act r.w.r. 17K(8) of the Income Tax Rules, 1962 the Ld. CIT(E) was duty bound to provide an opportunity in the form of show cause before he could reject application and cancel the provisional registration previously granted to the assessee. In the present case as solidified by the Ld. DR, there is not even a wisher in the impugned order as to whether appellant was confronted with forgoing negative findings for rebuttal, which ultimately resulted into rejection of its application and cancellation of provisional registration granted to it u/s 12Ab r.w.s. 12A(ac)(vi) of the Act.

6.

It is a trite law as laid down by Hon’ble Supreme Court in case ‘Chandra Kishore Jha Vs Mahavir Prasad’ reported in 8 SCC 266 (SC), that ‘if a statute provides for a thing to be done in a particular manner, then it has to be done in that manner and in no other manner’. The clause (B)(ii)(b) of sub- section (1) of section 12AB of the Act r.w.r. 17K(8) of the Income Tax Rules, 1962 specifically provided the manner in which application for registration can be rejected and provisional registration granted can be cancelled. As per this mandate the registering authority was under obligation to put the assessee ITAT-Pune Page 3 of 4

Shri Mahant Taponidhi Tatamgiri Maharaj Devastahan Trust to notice as soon he arrives at a negative conclusion while exercising his jurisdiction over application for registration. Therefore, impugned action circumventing the forgoing mandate, in our considered view is contra-legem as it deprived the appellant from reasonable opportunity to refute against arbitrary rejection.

7.

Faced with the situation, without commenting on the merits of the case, we deem it fit to remand this matter back to the file of Ld. CIT(E) for according not more than two effective opportunities to the assessee to represent and refute the reasons of rejection and cancellation of its provisional registration.

8.

In result, the appeal is ALLOWED FOR STATISTCIAL PURPOSE. In terms of rule 34 of ITAT Rules, the order pronounced in the open court on this Tuesday 28th day of November, 2023.

-S/d- -S/d- PARTHA SARATHI CHOUDHURY G. D. PADMAHSHALI JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / PUNE ; ददनाांक / Dated : 28th day of November, 2023. आदेश की प्रतितलतप अग्रेतिि / Copy of the Order forwarded to : 1.अपीलाथी / The Appellant. 2. प्रत्यथी / The Respondent.

3.

The PCIT (E), Pune 4. The CIT, Concerned, Pune 5. DR, ITAT, Bench ‘B’, Pune 6. गार्डफ़ाइल / Guard File. Ashwini आदेशानुसार / By Order वररष्ठ दनजी सदिव / Sr. Private Secretary आयकर अपीलीय न्यायादधकरण, पुणे / ITAT, Pune.

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