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Facts
The assessee, a charitable trust running a school, applied for registration under section 12AB. The CIT(E) issued two notices, but the assessee could not respond due to winter holidays. Consequently, the CIT(E) rejected the application.
Held
The Tribunal held that the assessee's non-appearance was not wilful or wanton, as the trust office was closed for winter holidays during the notice period. The CIT(E)'s rejection order was set aside.
Key Issues
Whether the rejection of the application for registration under section 12AB by the CIT(E) for non-compliance with notices during winter holidays was justified, and if sufficient opportunity was granted to the assessee.
Sections Cited
12AB, 10AB, 10AC
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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 Ld.CIT(E) had rejected the application filed by the assessee in form 10AB for registration u/s. 12AB of the Act and 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 Page 2 of 4 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, during which the Appellant/Trust (educational institution) was closed for winter holidays. 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 charitable trust and applied for registration u/s. 12AB in form 10AB of the Act. The Ld.CIT(E) had issued two notices for the appearance of the assessee but unfortunately the assessee had not responded and therefore the Ld.CIT(E) had rejected the application filed by the assessee. As against the said order, the assessee is in appeal before this Tribunal.
At the time of hearing, the assessee filed a paper book and also enclosed the written submissions and the provisional registration certificate in form 10AC and submitted that the assessee trust is running a school and because of the winter holidays, the trust office was closed and therefore the assessee trust was not able to appear before the Ld.CIT(E) and prayed an Page 3 of 4 another opportunity to appear before the Ld.CIT(E) with the necessary documents in support of the application filed by the assessee.
The Ld.DR relied on the order of the lower authorities and prayed to dismiss the appeal for the reason that the assessee had not responded to the two notices issued by the Ld.CIT(E).
We have heard the arguments of both sides and perused the materials available on record.
We have seen that the assessee was originally granted a provisional registration on 11/03/2022 for the period from Assessment Year 2022-23 to 2024-25. In order to get a permanent registration, the assessee filed an application in form 10AB. The Ld.CIT(E) had issued two notices on 27/09/2024 and 07/10/2024 but unfortunately the assessee trust was closed for winter holidays and therefore they were not in a position to attend the hearings. It is not the case of the revenue that the assessee had not followed any of the conditions in order to reject the application but the only reason for rejecting the said application is that the assessee had not appeared before the Ld.CIT(E). We have also perused the rejection order in which the Ld.CIT(E) had granted two opportunities one in the month of September and another in the month of October during which period the assessee trust office was not functioning because of the winter holidays. We are satisfied with the reasons stated by the assessee trust and convinced that the non-appearance of the assessee was neither wilful nor wanton. In such circumstances, after recording the submission made by the Ld.AR, we set aside the order of the Ld.CIT(E) and direct the Ld.CIT(E) to consider the application filed by the assessee in form 10AB of the Act on merits, after hearing the assessee and also after considering the various documents to be filed in support of their case.
Page 4 of 4 ITA No. 2589/Bang/2024
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 24th March, 2025.