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Facts
The assessee's appeal arises from the order of the CIT(E) rejecting their application for registration under Section 12A(1)(ac)(iii) of the Income-tax Act, 1961. The assessee had obtained provisional registration earlier, but the CIT(E) rejected the application after examining the trust's activities.
Held
The Tribunal held that the rejection of the application without providing a proper opportunity to the assessee was not justified. The Tribunal remitted the matter back to the CIT(E) for fresh consideration, subject to payment of costs and affording a reasonable opportunity of being heard.
Key Issues
Whether the CIT(E) was justified in rejecting the registration application without providing adequate opportunity to the assessee? Whether the application was filed in the correct form for regularization?
Sections Cited
12A(1)(ac)(iii), 12AB, 12A
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Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI
Before: SHRI ABY T. VARKEY & SHRI JAGADISH
आदेश / O R D E R
PER JAGADISH, A.M : Aforesaid appeal filed by the assessee arises out of the order of Learned Commissioner of Income Tax (Exemption), Chennai [hereinafter “CIT(E)”] dated 27.12.2024 in rejecting approval for registration u/s. 12A(1)(ac)(iii) of the Income-tax Act, 1961 (hereinafter “the Act”).
Rently Employee Care Fund :- 2 -:
There is a delay of 47 days in filing the appeal by the assessee.
The assessee has filed condonation petition/affidavit stating the reasons that the delay was primarily caused due to a real-time alert, which prevented timely action on the matter. We have considered the petition/affidavit of delay in filing the appeal and satisfied that there was sufficient cause for not filing the appeal within the prescribed time limit. Hence, the delay is hereby condoned.
The only ground of appeal in this appeal of the assessee is against the rejection of application filed in Form 10AB u/s. 12A(1)(ac)(iii) of the Act seeking registration u/s. 12AB of the Act. The Trust had obtained provisional registration u/s. 12A in Form-10AC dated 31.12.2021 from A.Y 2022-23 to 2024-25. The Ld. CIT(E) after examining trust’s activity, rejected the application. Aggrieved, the assessee is in appeal against the order of Ld. CIT(E).
The Ld. Authorized Representative (A.R) of the assessee has stated that the Ld. CIT(E) has rejected the application without providing reasonable opportunity, therefore one more opportunity may be granted in the interests of justice to substantiate its claim.
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On the other hand, the Ld. Departmental Representative (DR), has relied on the orders of lower authorities.
We have heard the rival submissions, and perused the materials available on record. We find that the Ld. CIT(E) had rejected the assessee's application on the ground that application has been filed wrongly in Form 10AB for regularization u/s 12A(1)(ac) of the Act, though the intention of assessee for making application is different from what it has applied. The Ld AR has submitted that Ld. CIT(E) has not issued show cause before holding the application not maintainable, therefore proper opportunity has not been provided to explain its case .
In our considered view, the rejection of the application without providing the proper opportunity is not justified. Considering the submissions and in the interest of justice, we deem it appropriate to remit the matter back to the file of the Ld. CIT(E) for fresh consideration of the assessee's application in accordance with law, after affording a reasonable opportunity of being heard subject to payment of costs of Rs.20,000/-. The same shall be paid by the assessee to Tamil Nadu State Legal Services Authority at Hon’ble High Court of Madras within a period of one month from the date of receipt of this order and produce the receipt before the Ld. CIT(E). We Rently Employee Care Fund :- 4 -: also direct the assessee to appear before the Ld. CIT(E) on the date of hearing without fail and submit all the relevant documents sought for by the Ld. CIT(E). In view of the above, the appeal filed by the assessee is allowed for statistical purposes only.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced on 16th day of July, 2025 at Chennai.