SHREE RUSHABH AJIT JAIN MEDICAL AND CHARIBALE TRUST,THANE vs. COMMISSIONER OF INCOME TAX (EXEMPTION), PUNE, PUNE

We have heard rival contentions of both the parties; and subject to the provisions of rule 18 of ‘ITAT-Rules’, perused material placed on record.

ITAT-Pune Page 1 of 3

We observed that, the appellant trust applied for 12A registration u/s 12A(1)(ac)(iii) of the Act on 29/11/2022. Upon perusal of Form 10AB and accompanying documents, the Ld. CIT(E) in order to vouch existence of the trust and genuineness of its activities, by issue of notice dt. 07/03/2023 called upon the appellant to substantiate the existence and genuineness of its activities and to furnish certain information / clarification regarding proof of identity of trustees, year-wise list of donation received, list of donors, note on charitable activities alongwith credible evidence and details of undertakings etc. Based on the information supplied by the appellant and previously rejected application, the Ld. CIT(E) concluded that the activities of the appellant lacks genuinity and thus came to reject the application. However this impugned order of rejection passed without the issue show cause notice [for short ‘SCN’] to the appellant in violation of provisions of section 12AB(1)(b)(ii) of the Act. Thus this rejection is found violative of principle of natural justice.

We note that, the fresh registration procedure brought in u/s 12AB of the Act by Finance Act 2020 mandates the registering authority dealing with application made u/s 12A(1)(ac) of the Act to provide a reasonable opportunity to the applicant before any such application is rejected. That is to say the registering authority was obligated to issue a written ‘Show-Cause-Notice’ to the appellant detailing therein his observations ITAT-Pune Page 2 of 3

In view of the ratio laid down by the Hon’ble Rajasthan High Court in ‘Sanatan Dharm Mahaveer Dal Vs CIT’ reported in 252 ITR 46, the impugned proceedings culminated in violation of principles of natural justice are in our considered view deserves to be set-aside as contra-legem. In the event we deem it fit to remand the matter back to the file of Ld. CIT(E) with a direction to accord a reasonable opportunity to the appellant to represent against negative observation made in its case and to decide the issue of registration a fresh, preferably in three effective hearings after serving the appellant with ‘SCN’ in terms of section 12AB of the Act.

Resultantly, the appeal is allowed for statistical purpose in above terms. U/r 34 of ITAT Rules, order pronounced in open court on this Thursday 26th day of October, 2023.