Loading judgment…
Facts
The assessee, a public charitable institution, had an existing registration u/s.12A since 1979. After a new regime took effect, they applied for renewal u/s.12A(1)(ac)(iii) of the Act. The CIT(E) rejected the application citing illegible documents and lack of clarity on the society's purpose.
Held
The Tribunal found that the CIT(E) did not confront the assessee with the defects in the documents nor gave an opportunity to explain shortcomings, violating principles of natural justice. The impugned order was set aside, and the application was restored to the CIT(E) for a decision on merits.
Key Issues
Whether the rejection of the registration application without providing an opportunity to explain defects violates the principles of natural justice.
Sections Cited
12A, 12A(1)(ac)(iii), 12AB
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘A’ BENCH: CHENNAI
Before: SHRI ABY T. VARKEY & SHRI AMITABH SHUKLA
आदेश / O R D E R
PER ABY T. VARKEY, JM:
1. This is an appeal preferred by the assessee against the order of the Learned Commissioner of Income Tax (Exemptions), (hereinafter referred to as “the Ld.CIT(E)”), Chennai, dated 30.12.2024 rejecting the online application dated 28.06.2024 filed in Form No.10AB seeking registration u/s.12A(1)(ac)(iii) of the Income Tax Act, 1961 (hereinafter referred to as "the Act”).
(AY -) Tamil Film Producers Council :: 2 ::
At the outset, the Ld.AR of the assessee brought to our notice that the assessee is a Public Charitable Institution enjoying registration u/s.12A of the Act from the year 1979 onwards. According to the Ld.AR, after the new regime took effect from 01.04.2021, the assessee had applied for registration which was granted u/s.12 of the Act and for renewal, assessee filed application u/s.12A(1)(ac)(iii) of the Act which was processed by the Ld.CIT(E) who asked for documents from the assessee only on 04.12.2024 and pursuant to it, the assessee filed relevant documents which fact has been acknowledged by the Ld.CIT(E)
at Page Nos.4-5 of the impugned order. According to the Ld.AR, the Ld.CIT(E) had initially observed (in the impugned order) that the assessee had filed Society’s Rules & Regulations, but it was ill-ligible and therefore, he couldn’t discern anything from that, because of which, he couldn’t appreciate the exact purpose for which Society was formed/constituted.
And after giving such a finding, the Ld.CIT(E) proceeded and made certain adverse observations and thereafter, has rejected the application which according to the Ld.AR is erroneous. The Ld.AR pointed out that the Ld.CIT(E) issued notice on 04.12.2024 which was duly replied by the assessee by filing detailed reply as well as supporting documents.
Thereafter, according to the Ld.AR, the Ld.CIT(E) didn’t ask for any clarification, leave alone asked for the legible copy of the Society’s Rules & Regulations; and without giving any opportunity to assessee to explain (AY -) Tamil Film Producers Council or produce any document, has rejected the application, which impugned action according to the Ld.AR violates the principles of natural justice and therefore, he pleads that one more opportunity be given to the assessee.
Per contra, the Ld.DR submitted that the Ld.CIT(E) has given several opportunities, but the assessee failed to appear/respond, therefore, assessee should not be given one more innings.
Having heard both the parties and after perusal of the records, we note that the assessee is an old Trust enjoying registration u/s.12A of the Act; and after the new regime came into effect, the assessee was enjoying provisional registration and thereafter, its application for renewal of registration u/s.12AB has been rejected inter-alia on the ground that the assessee didn’t file legible copy of the documents called for by him.
We find that the Ld.CIT(E) has not confronted the assessee with the defects ‘if any’ found in the documents furnished by the assessee and didn’t give an opportunity to explain any short-comings. Therefore, there is per-se violation of natural justice and therefore, we set aside the impugned order of the Ld.CIT(E) and restore the application back to his file with a direction to decide the application on merits after giving opportunity to the assessee. The assessee to be diligent and submit legible copies of all relevant documents called for by the Ld.CIT(E) and (AY -) Tamil Film Producers Council participate in the proceedings and thereafter, the Ld.CIT(E) to pass order in accordance to law.
In the result, appeal filed by the assessee is allowed for statistical purposes.
Order pronounced on the 11th day of June, 2025, in Chennai.