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Facts
The assessee, a charitable trust, applied for approval under Section 80G. The CIT(E) rejected the application stating that the assessee failed to furnish all required documents and did not respond to a notice. The assessee contended that they had submitted all relevant documents and had prior approvals.
Held
The Tribunal noted that the CIT(E) did not consider the merits of the case and rejected the application solely on the ground of non-compliance with a notice. The Tribunal decided to remand the issue back to the CIT(E) to grant approval based on submitted documents, considering the trust's past approvals.
Key Issues
Whether the CIT(E) was justified in rejecting the Section 80G approval application for non-submission of documents without considering prior approvals and merits? Whether a remand to the CIT(E) is appropriate for proper adjudication?
Sections Cited
80G, 80G(5), 11AA(2), 12A, 12AB
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Income Tax Appellate Tribunal, “F” BENCH, MUMBAI
Before: SHRI OM PRAKASH KANT, AM
(Assessment Year: 2022-23) Vasantben and Jayntilal R Shah CIT (Exemptions), Mumbai Charitable Trust B-7, Tejkiran Society, Ram Mandir Vs. Road, Vile Parle(E), Mumbai – 400057. PAN/GIR No. AAATV0405E (Appellant) : (Respondent) Assessee by : Shri Devang Sheth Respondent by : Shri Vivek Parampurna, (CIT-DR) Date of Hearing : 08.07.2025 Date of Pronouncement : 09.07.2025 O R D E R Per Kavitha Rajagopal, J M: This appeal has been filed by the assessee, challenging the order of the learned Commissioner of Income Tax (Exemptions), Mumbai (‘ld. CIT(E)’ for short), in rejecting the assessee’s application seeking approval u/s. 80G of the Act.
The assessee has raised the following grounds of appeal: “That the Ld. Commissioner of Income Tax (Exemptions) has erred in facts and in law in rejecting the approval of renewal application wide Form No. 10AB dtd 24/05/2024 under section 80G(5) of the Income Tax Act, 1961 ('the Act").
2. That the Ld. Commissioner of Income Tax (Exemptions) has erred in law as well as on facts in rejecting the approval sought under section 80G of the Act without ascribing specific reasons for the rejection.
3. That the Ld. Commissioner of Income Tax (Exemptions) has erred in law as well as on facts in rejecting the approval sought under section 80G of the Act on the (A.Y. 2022-23) Vasantben and Jayntilal R Shah Charitable Trust ground that time limit for deciding on the application is 30.11.2024 and granting proper opportunity to represent.
4. That the Ld. Commissioner of Income Tax (Exemptions) has erred in law as well as on facts in rejecting the approval sought under section 80G of the Act by stating that bank accounts not submitted whereas the Rule 11AA of the IT Rules do not require the same and not taking cognizance of documents submitted and the fact that Appellant was granted exemption u/s. 80G(5) since its formation i.e., 1996 and that there are no change of Facts.”
Brief facts of the case are that the assessee is a public charitable trust registered under the Bombay Public Trust Act which has been granted 12A certificate, vide registration dated 08.12.1997. The assessee is also registered u/s. 12AB of the Act dated 24.09.2021 in form 10AC for A.Y. 2022-23 to 2026-27 and further Section 80G approval was also granted from 12.09.1996 to 31.03.1998 vide order dated 03.05.2010. It is also observed that the assessee has been granted provisional approval u/s. 80G of the Act for a period from 24.09.2021 to A.Y. 2024-25 in form 10AC, dated 24.09.2021. The assessee trust has sought for approval u/s. 80G of the Act in form 10AB as per Clause (iii) of the first proviso to Section 80G(5) of the Act before the ld. CIT(E). The ld. CIT(E) rejected the assessee’s application seeking for approval u/s. 80G of the Act on the ground that the assessee has failed to furnish all the relevant documents as required under Rule 11AA(2) of the Income Tax Rules, 1962.
Aggrieved the assessee is in appeal before us.
The learned Authorised Representative ('ld. AR' for short) for the assessee contended that the assessee trust has been regularly filing the return of income for all the years and have also been validly holding registration u/s. 12A, 12AB and also u/s. 80G of the Act for earlier years. The ld. AR further contended that the assessee had filed all the relevant (A.Y. 2022-23) Vasantben and Jayntilal R Shah Charitable Trust documents before the ld. CIT(E) and the same has not been considered by the ld. CIT(E) for the reason that the limitation to decide the said application was getting time barred on 30.11.2024 and the ld. CIT(E) has passed the impugned order on 29.11.2024. The ld. AR further contended that the assessee has received donations and has expended the same for the objects of the trust which is towards providing education and relief to poor and for the allied charitable activities. The ld. AR also brought our attention to the documents that has been furnished before the ld. CIT(E) and prayed that the same may be considered.
The learned Departmental Representative ('ld. DR' for short) for the revenue on the other hand controverted the said fact and stated that the assessee has failed to submit all the relevant documents as per the requirement of Rule 11AA(2) of the Income Tax Rules, 1962. The ld. DR relied on the order of the ld. CIT(E).
We have heard the rival submissions and perused the materials available on record. It is observed that the ld. CIT(E) has rejected the assessee’s application seeking for approval u/s. 80G on the ground that the assessee has failed to furnish all the documentary evidence which are required as per Rule 11AA(2) of the Income Tax Rules, 1962. The ld. CIT(E) further held that the assessee has not given supporting documentary evidence pertaining to its activity and expenses on the objects of the trust and also the assessee has not provided bank statement reflecting the same. As the assessee failed to respond to the notice, the ld. CIT(E) denied the grant of approval u/s. 80G of the Act.
(A.Y. 2022-23) Vasantben and Jayntilal R Shah Charitable Trust 8. On the above facts of the case, it is observed that the assessee trust has been duly registered u/s. 12A and 12AB and further was also holding approval u/s. 80G of the Act for earlier years. It is also evident that the ld. CIT(E) has not given a finding on the merits as to the activities of the trust nor the objects of the assessee trust as to whether the same are disputed or not and has merely rejected, for the reason that the assessee has not complied with the notice failing to provide all relevant documents in support of its claim.
Upon considering these facts, in order to extend one more opportunity by adhering to the principles of natural justice and in the interest of justice dispensation, we hereby remand these issues back to the file of ld. CIT(E) with a direction to grant approval on the basis of the documents furnished by the assessee or proposed to be filed by the assessee trust considering the fact that the assessee has already been granted approval u/s. 12A/12AB and 80G of the Act for earlier years and to decide the same on the merits and in accordance with law.