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Facts
The assessee, a charitable trust, had applied for registration under section 12AB. The CIT(E) rejected the application without granting a reasonable opportunity, as the assessee failed to appear on the scheduled dates due to lack of knowledge and being from a rural area.
Held
The Tribunal held that the assessee, being a charitable trust, deserved another opportunity to present their case. The CIT(E)'s order was set aside, and the issue was remitted back for fresh adjudication after hearing the assessee.
Key Issues
Whether the CIT(E) rightly rejected the application for registration without providing a reasonable opportunity to the assessee, especially considering their rural background and lack of awareness of procedures.
Sections Cited
12AB
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Income Tax Appellate Tribunal, ‘A’ BENCH : BANGALORE
Before: SHRI LAXMI PRASAD SAHU & SHRI SOUNDARARAJAN K.
ORDER PER SOUNDARARAJAN K., JUDICIAL MEMBER
This is an appeal filed by the assessee challenging the order of the Ld.CIT(E), Bangalore dated 06/11/2024 in which the application for registration in form 10AB was rejected without granting a reasonable opportunity.
The assessee has raised the following grounds: “1. The order of the Hon'ble CIT(Exemption) for rejecting the application u/s 12AB is bad in law and against the principle of natural justice, as sufficient opportunity has not been granted by the authority.
2. On the facts and circumstances of the case and in the provisions of the law, the Hon'ble CIT(Exemption) erred in rejecting the application for registration u/s 12AB, for non- complying to the notices which were issued within a period of 15 days, as the Secretary of the Appellant/Trust has not been informed about such notices by the person incharge. Hence no reply was made to such notices.
3. On the facts and circumstances of the case and in the provisions of the law, the Hon'ble CIT(A) erred in rejecting the application for registration only for the reason of non- compliance to the notices issued for calling for information, and documents. But not for the reason of the non- genuineness of activities of the trust and activities conducted against the objects of the trust.
4. For these and other reasons which may be adduced at the time of the hearing, the Appellant/Trust prays before this Hon'ble Bench to set aside the order of the Hon'ble CIT(Exemption) passed for cancellation of registration and direct the said authority to reconsider the application for registration as per the law and to grant the registration u/s 12AB.
5. Appellant Craves Leaves to add, to alter, to amend or to delete any of the grounds at the time of the hearing.”
The brief facts of the case are that the assessee is a trust and filed an application in form 10AB for registration u/s. 12AB of the Act. Thereafter, the Ld.CIT(E) had issued notices on 27/09/2024 and 07/10/2024. But unfortunately, the assessee had not appeared on the said dates and therefore the Ld.CIT(E) had rejected the said application for registration. As against the said order, the assessee is in appeal before this Tribunal.
At the time of hearing, the Ld.AR submitted that the assessee is from rural area and therefore they have no knowledge about the various provisions and therefore by mistakenly they had not appeared before the Ld.CIT(E) even though they are having all the documents. The Ld.AR therefore prayed an another opportunity to appear before the Ld.CIT(E).
The Ld.DR relied on the orders of the lower authorities and prayed to dismiss the appeal.
We have heard the arguments of both sides and perused the materials available on record.
We have considered the fact that the assessee already got a provisional approval on 23/09/2021 for the period from 23/09/2021 to Assessment Year 2024-25. In order to convert the provisional approval into a permanent one, the assessee filed an application in form 10AB before the Ld.CIT(E) but unfortunately the assessee had not appeared before the Ld.CIT(E) and produced the necessary documents to prove the genuineness of the activities of the trust. Therefore the Ld.CIT(E) had rejected the application filed by the assessee.
We have also considered the fact that the assessee is a charitable trust established for the purpose of the relief of the poor, medical relief and advancement of any other objects of the general public utility which fact was not denied by any of the authorities and also obtained a provisional registration on 23/09/2021. We have also perused the acknowledgment issued by the department dated 16/05/2024 in which the assessee had attached various documents in support of their application filed in form no. 10AB. Even though the assessee had filed some documents before the Ld.CIT(E), the Ld.CIT(E) sought for some more details vide notices dated 27/09/2024 and 07/10/2024. We have considered the submissions made by the assessee that they are from rural area and also does not have proper knowledge about the provisions of the Act and therefore we feel that one more opportunity may be granted for the assessee to appear before the Ld.CIT(E) with the documents sought for by him. We also permit the assessee to produce all the documents in support of their case when the matter is taken up for hearing by the Ld.CIT(E). With the above observation, we set aside the order of the Ld.CIT(E) and remit the issue to the file of the Ld.CIT(E) to decide the issue afresh after hearing the assessee.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 24th March, 2025.