KHIMCHAMPA FOUNDATION,MUMBAI vs. CIT(EXEMPTIONS)MUMBAI, MUMBAI

In the facts and circumstances of the case and in law, the leaned CIT (Exemption) erred in not granting sufficient opportunity to the Appellant to submit the details/information thereby violating the principles of natural justice.

The assessee in ITA No. 5930/Mum/2024 raised the following grounds of appeal –

In the facts and circumstances of the case and in law, the leaned CIT (Exemption) erred in not granting sufficient opportunity to the Appellant to submit the details/information thereby violating the principles of natural justice.

The assessee is a Charitable Trust and filed an application in Form 10AB under section 12A(1)(ac)(iii) of the Act seeking registration under 12AB of the Act. The assessee also filed Form 10AB on 13.03.2024 requesting for approval under section 80G(5)(iii) of the Act. The CIT(E) rejected both the applications by making similar observations. The relevant observation in the order rejecting registration under section 12AB is extracted below: “3. On verification of the application in Form 10AB filed by the assessee, it was found that the application was not complete, and all the documents required to be accompanying the application were not furnished. Hence, a notice was issued to the applicant vide DIN & Notice No. ITBA/EXM/F/EXM43/2024-25/1066419382(1) dated 04.07.2024 requesting the assessee to furnish the complete set of documents mentioned in Rule 11AA(2). In response, the assessee trust has made partial submission on 16.07.2024. After going through the submissions made by the assessee the undersigned has requested for remaining information regarding proof of activities and expenses made towards the activities of the trust. Bank Statement, donors details vide DIN & Notice No. ITBA/EXM/F/EXM43/2024- 25/1068676931(1) dated 12.09.2024. The assessee trust was given time till 19.09.2024 to comply with the said notice. However, no response was received from the assessee in this regard.

Thus, the assessee has made no compliance to the terms of the above show cause notice. Registration under section 12AB is to be granted in terms of the provisions of section 12AB(1)(b) of the Act after being satisfied about the objects of the trust or institution, the genuineness of activities, and the compliance of any other law for the time being in force as are material for the purposes of achieving its objects. In the absence of necessary compliance by the Applicant, the undersigned is unable to arrive at a satisfactory conclusion on these parameters. As such, in view of the statutory limitation to decide on the application on or before 30.09.2024, the undersigned is left with no other option but to reject the application seeking registration under section 12AB of the Act.”

We heard the parties and perused the material on record. The only grievance of the ld. AR is that the CIT(E) called for filing additional details with regard to registration but has passed the order rejecting the applications before the assessee could file the relevant details. Accordingly, the ld. AR prayed that the appeal could be restored back to the CIT(E) so that the assessee would get an opportunity submit the complete details as called for by the CIT(E). From the perusal of the observations of the CIT(E) as extracted above, we notice that the assessee's application was not fully complete and that all the relevant details have not been furnished by the assessee. It is further noticed that the CIT(E) has called on the assessee to provide the rest of the details by 19.09.2024 and that the CIT(E) has passed the order rejecting the applications made by the assessee on 25.09.2024 for the reason that the assessee did not furnish the require details as per the time line provided by the CIT(E). The CIT(E) has rejected the application for registration under section 80G also for the same reason. Considering these facts which are unique to the appeals under consideration we are inclined to give one more opportunity to the assessee to submit the entire details with regard to the application for registration under section 12AB and under section 80G of the Act. Accordingly, we remit the appeal back to the CIT(E) with a direction to consider the applications afresh based on the details that would be submitted by the assessee in this regard. The assessee is directed to furnish all the relevant details as has been called for by the CIT(E) without unnecessary delay and co-operative with the proceedings. It is ordered accordingly.

In result, appeal of the assessee is allowed for statistical purpose.