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Facts
The assessee, a public charitable trust, applied for final registration under Section 12AB after obtaining provisional registration. The CIT (Exemptions) rejected the application and cancelled the provisional registration without providing a proper opportunity of being heard, alleging non-submission of documents.
Held
The Tribunal held that the CIT (Exemptions) had not considered the submissions and documents filed by the assessee on 7.11.2024 before passing the cancellation order. The Tribunal found that the assessee was not given a reasonable opportunity of being heard.
Key Issues
Whether the CIT (Exemptions) erred in cancelling the registration without providing a reasonable opportunity of being heard and without considering the submitted documents.
Sections Cited
12AB, 12A
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Income Tax Appellate Tribunal, “B’’ BENCH: BANGALORE
Before: SHRI LAXMI PRASAD SAHU & SHRI KESHAV DUBEY
PER KESHAV DUBEY, JUDICIAL MEMBER:
This appeal at the instance of the assessee is directed against the order of the ld. CIT (Exemptions) dated 26.12.2024 vide DIN & Notice No. ITBA/EXM/F/EXM45/2024-25/107159728(1) cancelling the registration u/s 12AB of the Income Tax Act, 1961 (in short “The Act”).
The assessee has raised the following grounds of appeal:
Brief facts of the case are that the assessee being a public charitable trust had obtained the provisional registration under sub clause (vi) of clause (ac) of sub-section (1) of Section 12A of the Act on 27.5.2021 vide provisional registration no. AAHTM1259LE20206 effective from AY 2021-22 to AY 2023-24 with the main objective of providing educational relief and with the intention to carry out medical and nursing college. It is submitted that the assessee trust had obtained a property for this purpose on a long term lease of 33 years and also obtained the affiliation from Rajiv Gandhi University of Health Science, Karnataka vide their Notification dated 20.9.2024 to run Aaliyah College of Nursing. The assessee trust had applied for the final registration on 29.6.2024 in form no.10AB before the ld. CIT(A) Bangalore. The assessee was accordingly granted opportunity of being heard vide notices dated 4.10.2024, 23.10.2024 and 29.10.2024 wherein the assessee was required to appear along with Mangalore City Educational & Charitable Trust, Ullal Page 3 of 5 documents/details. However, The ld. CIT(E) observed that the assessee had neither responded to any of the notices issued nor appeared and submit all the necessary documents/details as required for registration u/s 12AB of the Act and accordingly, held that as the assessee is required to submit necessary documents to prove the genuineness of the activities of the trust and also the compliance of such requirements of any other law as are material for the purpose of achieving its objects, and hence application in form 10AB dated 29.6.2024 filed for registration u/s 12AB of the Act was rejected and the registration was also cancelled.
Aggrieved by the order of ld. CIT(Exemptions) dated 26.12.2024, the assessee has filed the present appeal before this Tribunal. The assessee has also filed a paper book comprising 115 pages containing therein copy of written submission, acknowledgement of online submission dated 7.11.2024, copy of submissions made on 7.11.2024 as well as letter of authorization.
Before us, the ld. A.R. of the assessee vehemently submitted that in response to notice dated 29.10.2024, the assessee trust in fact filed the online submission on 7.11.2024 bearing acknowledgement no.682963391071124 by uploading assessee’s written submissions along with the copy of 12AB registration, trust deed, lease agreement, trustee details, notes on activities as well as financial statements. However, the ld. CIT (Exemptions) without considering the same has been pleased to pass an order on 26.12.2024 i.e. almost after one & half month. Further the ld. A.R. of the assessee vehemently submitted that the allegation as made by the ld. CIT(Exemptions) that assessee had not filed any submission by way of furnishing documents/details as required for registration u/s 12AB of the Act is not correct. Lastly, ld. A.R. submitted that Mangalore City Educational & Charitable Trust, Ullal Page 4 of 5 even before passing the ex-parte order, ld. CIT(Exemptions) failed to issue show cause notice granting opportunity of being heard.
Ld. D.R. on the other hand, supported the order of the authorities below.
We have heard the rival submissions and perused the materials available on record. On going through the page 3-4 of the paper book filed before us, we take a note of the fact that the assessee has in fact filed a written submission along with the copy of provisional registration certificate u/s 12AB of the Act, copy of trust deed, copy of audited financial statement, list of trustees, copy of lease agreement for taking premises to run the college, copy of affiliation received from Rajiv Gandhi University of Health Sciences, Karnataka, College activity photos, etc. on 7.11.2024 bearing acknowledgement no. 682963391071124. However, the ld. CIT(Exemptions) while passing order on 26.12.2024 i.e. after one & half months has observed that assessee trust have not made any submission against the notices issued. In our opinion, the ld. CIT(Exemptions) without considering the submission as made by the assessee trust on 7.11.2024 has passed an order by cancelling the registration of the assessee. Before us, ld. A.R. of the assessee requested to remand the issue back to the file of ld. CIT(Exemptions) with a direction to decide the case on merits and pass an order after providing a reasonable opportunity of being heard. This being so, in the interest of justice and fair play and as requested by the ld. A.R. of the assessee, we deem it fit and proper to remit the entire issue in dispute to the file of ld. CIT (Exemptions) to decide afresh in accordance with law. Needless to say, a reasonable opportunity of being heard must be granted to the assessee. The assessee is also directed to produce/submit all the necessary details/documents /records/financials/reports in support of its claim or as may be Mangalore City Educational & Charitable Trust, Ullal Page 5 of 5 required by the ld. CIT (Exemptions) for granting the registration. It is ordered accordingly.
In the result, appeal filed by the assessee is partly allowed for statistical purposes.
Order pronounced in the open court on 24th June, 2025