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Facts
The assessee filed applications for registration under Section 12AB and approval under Section 80G of the Income Tax Act, which were rejected by the CIT(E) for non-compliance. The assessee filed fresh applications which were also rejected as not maintainable. Two appeals were withdrawn by the assessee.
Held
The Tribunal held that the rejections based on technical grounds were unsustainable as provisional registration had already been granted. The Tribunal set aside the orders and restored the matters to the CIT(E) for fresh adjudication on merits after giving the assessee a reasonable opportunity of being heard.
Key Issues
Whether rejection of applications for registration and approval on technical grounds without providing a reasonable opportunity for compliance is sustainable.
Sections Cited
12AA, 80G, 12AB, 12A
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Income Tax Appellate Tribunal, “F” BENCH, MUMBAI
Before: SHRI SAKTIJIT DEY, VP & SHRI NARENDRA KUMAR BILLAIYA, AM
O R D E R Per Saktijit Dey, VP:
Captioned appeals by the assessee arise out of four separate orders of learned Commissioner of Income Tax (Exemptions), Mumbai (‘ld. CIT(E)’ for short), rejecting assessee’s applications seeking registration u/s. 12AA of the Income Tax Act, 1961 (‘the Act’ for short) and approval u/s. 80G of the Act. appearing for the assessee furnished letters signed by the assessee seeking withdrawal of the appeals.
The learned Departmental Representative ('ld. DR' for short) did not express any objection to assessee’s request.
Considering the above, we permit the assessee to withdraw the aforesaid two appeals. Accordingly, & 2699/Mum/2025 are dismissed as withdrawn.
So far as the other two appeals, being & 1262/Mum/2025 are concerned, briefly, the facts are, the assessee on 28.01.2023 had filed an application in Form No. 10AB, seeking registration u/s. 12AB of the Act, having already availed provisional registration. Separately, the assessee also filed an application, seeking approval u/s. 80G of the Act.
After receiving aforesaid applications, ld. CIT(E) called for certain information/documents from the assessee. It is observed, alleging that the assessee failed to fully comply with the queries raised, ld. CIT(E) rejected both the applications.
Subsequently, the assessee again on 29.06.2024 and 30.06.2024 made applications, seeking registration u/s. 12AB of the Act and approval u/s. 80G of the Act, respectively. Since, ld. CIT(E) had already rejected the assessee’s earlier applications due to non-compliance, he rejected the fresh applications stating that they are not maintainable.
Before us, ld. Counsel appearing for the assessee, submitted that in response to the queries raised in respect of the earlier applications, the assessee had to some extent made with had he given reasonable opportunity. He submitted, without providing reasonable opportunity to the assessee to comply in terms of with the notice issued, applications should not have been rejected. Thus, he submitted, the orders passed by ld. CIT(E), rejecting assessee’s applications should be set aside with a direction to consider the applications de novo on merits.
The ld. DR supported the decision of ld. CIT(E).
Having considered rival submissions and perused the materials on record, we find, the second set of applications filed by the assessee seeking registration u/s. 12AB of the Act and approval u/s. 80G of the Act have been rejected by ld. CIT(E) merely for the reason that they are not maintainable, as the assessee has not complied with the queries made in response to notice issued in respect of earlier applications. This, in our view, is unsustainable. Regard being had to the fact that provisional registration has already been granted to the assessee, applications filed by the assessee seeking registration u/s. 12AB of the Act and approval u/s. 80G of the Act, should have been considered on merits, rather than, dismissing them on technical grounds.
In view of the aforesaid, we are inclined to set aside the respective orders passed by ld. CIT(E), rejecting assessee’s applications seeking registration u/s. 12A and approval u/s. 80G of the Act and restore the matters back to his file for de novo adjudication on merits after providing due and reasonable opportunity of being heard to the assessee.
In the result, the appeals are allowed for statistical purpose.