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Facts
The assessee filed an application for registration under section 12AB seeking regular registration. The Ld. CIT(E) rejected the application as non-maintainable because the assessee had submitted a provisional registration instead of a regular one and filed under the wrong clause.
Held
The Tribunal held that the assessee had committed a technical breach by filing under the wrong provisions, but their right to seek regular registration should not be denied. The matter was set aside to allow the assessee to move an appropriate application.
Key Issues
Whether the Ld. CIT(E) erred in rejecting the application for registration on technical grounds without granting an opportunity to rectify errors.
Sections Cited
12AB, 12A(1)(ac)(ii), 12A(1)(ac)(vi), 12AB(1)(b)(i)
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Income Tax Appellate Tribunal, MUMBAI “B” BENCH : MUMBAI
Before: SHRI VIKRAM SINGH YADAV & SHRI RAHUL CHAUDHARY
For Assessee : NONE For Revenue : Shri Satyaprakash R.Singh, CIT-DR Date of Hearing : 15-05-2025 Date of Pronouncement : 27-05-2025 O R D E R PER VIKRAM SINGH YADAV, A.M : This is an appeal filed by the assessee against the order of the Ld. Commissioner of Income Tax (Exemptions)-Pune [„Ld.CIT(E)‟], dated 20-01-2025, wherein the assessee has taken the following grounds of appeal:
“1. In the facts and circumstances of the case, the Ld. CIT (E) has erred in rejecting the application of the Appellant Trust u/s 12AB r.w.s. 12A(1)(ac)(ii) without providing any opportunity to the assessee.
2. In the facts and circumstances of the case, the Ld. CIT (E) has erred in not considering the application of the Appellant Trust u/s 12AB r.w.s. 12A(1)(ac)(ii) as per the judicial precedents laid down in this regard.”
2. None appeared on behalf of the assessee nor was any adjournment application filed.
3. During the course of hearing, the Ld.CIT/DR taken us through the findings of the Ld. CIT(E) and the contents thereof reads as under:
“The assessee has filed application No.CIT EXEMPTION, PUNE/2024- 25/12AA/15543 in Form No.10AB under sub-clause (ii) of clause (ac) of sub-section (1) of section 12A of the Income Tax Act, 1961 on 30/09/2024.
The application was carefully perused and considered along with its annexures. With a view to verify the genuineness of activities of the assessee and compliance to the requirements of any other law for the time being in force by the trust or institution as are material for the purpose of achieving its objects, a notice was issued through ITBA portal on 06/11/2024 requesting it to upload certain other information /clarification viz. self-certified copy of order of regular registration under section 12AB in form No.10AC, date of such approval, date of expiry of such approval, proof of identity of main trustees / directors, year-wise list of donations received, note on activities carried out along with supporting credible evidence, details of any other Law applicable for achievement of objectives and proof of compliance of said Law, details of business undertakings etc.. The information / details were called for under the provisions of section 12AB(1)(b)(i) of the Income Tax Act, 1961. These are the basic details required to ascertain the validity of the application and the overall nature of the activities of the assessee and are directly relevant to the present proceedings.
The assessee was requested to submit its compliance by 21/11/2024. The assessee was specifically informed that in the event of failure to comply by the due date, the application shall be liable to be rejected and the registration / approval shall also be liable to be cancelled. The assessee was also given an opportunity of being heard vide the said notice. The notice was duly served on the assessee through e-portal and email.
4. On verification of the details/documents submitted by the assessee in response to the said notice few discrepancies were observed. Another notice was then issued to the assessee on 07/01/2025 and the discrepancies were duly communicated to it as reproduced below:
"On verification of records and details furnished by you, it is seen that you are not having regular registration under section 12A(1)(ac) of the Act under clause (i) or (iii) of the Act. Further, it is noticed from the CPC 2.0 Portal that you have obtained provisional registration under sub-clause (vi) of clause (ac) of sub-section (1) of section 12A of the Act. Therefore, the prerequisite for application under sub-clause (ii) of clause (ac) of sub-section (1) of section 12A of the Act is not fulfilled in your case."
5. The compliance to the said notice was due on 14/01/2025. The notice was duly served to the assessee through e-portal and email. However, the assessee has not responded to the said notice till date.
6. On verification of the details / documents submitted by the assessee, it is seen that the assessee has not furnished the copy of REGULAR REGISTRATION in form No.10AC under section 12AB read with section 12A(1)(ac) (i) or 12A(1)(ac) (iii) of the Income Tax Act, 1961 but submitted a copy of PROVISIONAL REGISTRATION under section 12AB read with section 12A(1)(ac) (vi) of the Income Tax Act, 1961.
The present application is filed by the assessee under clause (ii) of section 12A(1)(ac) of the Income Tax Act, 1961. The provisions of clause (ii) of section 12A(1)(ac) are related to application for renewal of regular registration of a trust or institution which is already having regular registration under section 12AB of the Act and the period of said registration is about to expire. 8. The assessee was specifically requested vide the initial notice to furnish the copy of order of regular registration under section 12AB of the Income Tax Act, 1961. Such copy is actually required to be furnished along with the application itself under the provisions of Rule 17A(2)(e) of the Income Tax Rules, 1962. However, the assessee has neither submitted the same along with the application nor in response to the notice issued in this regard. Thus the assessee failed to furnish the same. The copy of order submitted by the assessee is a copy of provisional registration under section 12AB read with clause (vi) of section 12A(1)(ac) of the Income Tax Act, 1961 and not a copy of regular registration under section 12AB read with clause (i) or clause (iii) of section 12A(1)(ac) of the Income Tax Act, 1961. 9. The non-submission of copy of order of regular registration under section 12AB of the Income Tax Act, 1961 establishes the fact that the prerequisite for application under clause (ii) of Section 12A(1)(ac) of the Income Tax Act, 1961 is not fulfilled in this case. Therefore, prima-facie it appears that the application is not maintainable.
In view of the above, the application filed by the assessee is treated as non-maintainable and hence, 'rejected' for statistical purposes without going into the merits of the case and no adverse inference is drawn against the assessee.”
It was submitted by the ld CIT-DR that the assessee had moved an application under the wrong provisions and as a result, the Ld. CIT(E) has rejected the application filed by the assessee as non-maintainable without going in the merits of the case.
On perusal of material available on record, we find that the assessee has moved an application in Form-10AB of the Act under sub-clause (ii) of Clause (ac) of sub-clause (1) of Section 12A of the Act. The same relates to application for renewal of regular registration of a trust, which is already having regular registration and the period of said registration is about to expire whereas the facts of the assessee‟s case are that the assessee has in place a provisional registration u/s. 12AB r.w.s. 12A(1)(ac)(vi) of the Act and a copy thereof was also filed before the ld CIT(E) and apparently, the application for seeking regular registration has thus been moved by the assessee though under the wrong provisions. We, therefore, find that it is only a technical breach on the part of the assessee in moving an application seeking regular registration under the wrong provisions. However, the assessee‟s right for seeking regular registration cannot be denied merely on that account. In view thereof, we find that the assessee deserves an opportunity to move an appropriate application under the relevant provisions. The matter is accordingly set aside to the file of the Ld. CIT(E) with a liberty to the assessee to move an application under the relevant provisions which the Ld.CIT(E) shall examine and decide based on the merits of the case as per the relevant provisions after providing reasonable opportunity to the assessee.
In the result, the appeal of the assessee is allowed for statistical purposes.