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Facts
The assessee trust filed an application for registration under Section 12AB of the Income Tax Act. The CIT(E) rejected the application for non-compliance with a notice, despite the assessee requesting an adjournment to furnish information.
Held
The Tribunal held that the rejection of the application was premature as the assessee had a bona fide reason for non-compliance and was not given adequate opportunity. The matter was restored to the CIT(E) for fresh adjudication.
Key Issues
Whether the CIT(E) rightly rejected the application for registration under Section 12AB without granting adequate opportunity to the assessee?
Sections Cited
12A(1)(ac)(iii), 12AB, 1961
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Income Tax Appellate Tribunal, MUMBAI BENCH “B”, MUMBAI
Before: SHRI AMARJIT SINGH & SHRI SANDEEP SINGH KARHAIL
O R D E R
PER AMARJIT SINGH, ACCOUNTANT MEMBER:
The appeal of the assessee for the assessment year 2025-26 is directed against the order dated 19.10.2024 passed by the CIT(Exemptions), Mumbai. The assessee has raised the following grounds of appeal:
“i. On the facts and circumstances of the appellant’s case and in law the ld. CIT(Exemptions) erred in rejecting the application made by the applicant in Form 10AB u/s 12A(1)(ac)(iii) for seeking registration u/s 12AB of the Income Tax Act, 1961 for the reasons mentioned in the impugned order or otherwise. ii. The Appellant craves leaves to alter, amend withdraw or substitute any ground or grounds or to add any new ground or grounds of appeal on or before the hearing.”
Bharat Varshiya Diyamber Jain Tirth Kshetra Trust A.Y. 2025-26 2. Fact in brief is that the assessee trust has filed an application in Form 10AB u/s 12A(1)(ac)(iii) seeking registration u/s 12AB of the Act. The ld. CIT(E) has rejected the application seeking registration u/s 12AB of the Act on the ground that assessee has not made compliance to the notice dated 08.10.2024 asking to furnish further information. During the course of appellate proceedings before us, the ld. Counsel submitted that assessee has made application requesting for adjournment on the ITBA portal on 15.10.2024. However, the ld. CIT(E) has not granted any adjournment and passed the order on 19.10.2024 by rejecting the application seeking registration u/s 12AB of the Act for want of information.
On the other hand, ld. DR supported the order of lower authorities.
Heard both the sides and perused the material on record. Without reiterating the fact as discussed above, the ld. CIT(E) has rejected the application of the assessee trust seeking approval u/s 12AB of the Act on the ground that no compliance was made to the show cause notice issued on 08.10.2024. After considering the submission of the ld. Counsel that assessee has requested for short adjournment to compile the information as directed by the ld. CIT(E). However, the application seeking registration u/s 12AB of the Act was rejected on 19.10.2024 without granting any further opportunity to the assessee. We consider that there is a bona fide reason as discussed for not making compliance to the notice issued on 08.10.2024, therefore in order to adjudicate the case of Bharat Varshiya Diyamber Jain Tirth Kshetra Trust A.Y. 2025-26 the assessee on merit, we restore this file to the ld. CIT(E) for deciding de novo after providing adequate opportunity to the assessee.
In the result, both the appeals of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 21.02.2025.