CHAGANAM LALITHAMMA & BHASKAR RAO MEMORIAL TRUST,HYDERABAD vs. DCIT., CIRCLE-5(1), HYDERABAD
What did the Tribunal hold?
The Tribunal held that the impugned order rejecting the application for registration under Section 12AB was incomplete and inconclusive, as it reproduced the notice issued to the assessee but lacked any finding or concluding remarks. Consequently, the Tribunal declared the order non-est and liable to be set aside. The matter was remanded to the CIT(E) for reconsideration of the application and to decide it by a speaking order. Regarding the application for approval under Section 80G, the Tribunal noted that the CIT(E) had given reasons for rejection, citing a lack of substantial charitable activities. However, since the Section 12AB matter was being remanded for fresh adjudication, the Tribunal also set aside the order for Section 80G approval and remanded it to the CIT(E) for reconsideration under the same terms and directions as the Section 12AB matter. The appeals were allowed for statistical purposes.
What were the facts?
The assessee, Chaganam Lalithamma & Bhaskar Rao Memorial Trust, filed two appeals before the Income Tax Appellate Tribunal (ITAT), Hyderabad Bench, challenging orders dated December 7, 2024, and December 11, 2024, passed by the learned Commissioner of Income Tax (Exemption) (CIT(E)). These orders rejected the assessee's applications for registration under Section 12AB and approval under Section 80G of the Income Tax Act, 1961. There was a one-day delay in filing the appeals, which the Tribunal condoned after considering the assessee's explanation. The core of the dispute lies in the CIT(E)'s rejection of these applications.
What were the issues?
1. Whether the order of the learned CIT(E) rejecting the application for registration under Section 12AB of the Income Tax Act, 1961, is erroneous and passed in violation of principles of natural justice, particularly in the absence of any finding or conclusion. Assessee's Contention: The learned Authorized Representative (AR) argued that the impugned order is incomplete, lacks findings, and is therefore not sustainable in law. The revenue's Contention: The learned Departmental Representative (DR) conceded that there was a mistake in the impugned order as the concluding part was missing. 2. Whether the order of the learned CIT(E) rejecting the application for approval under Section 80G of the Income Tax Act, 1961, is erroneous, based on the alleged ground that no substantial charitable activities are being carried out by the assessee, and whether this rejection was made without considering relevant documentary evidence. Assessee's Contention: The learned AR submitted that the CIT(E)'s finding is without considering the documentary evidence and details filed by the assessee, and therefore, the order should be set aside and approval granted. The Revenue's Contention: The learned DR agreed that since the Section 12AB matter was being remanded, this matter should also be remanded for reconsideration along with the Section 12AB application.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Hyderabad ‘ DB-B ‘ Bench, Hyderabad
Before: Shri Vijay Pal Rao, Vice-Shri Manjunatha, G.
ORDER
Per Vijay Pal Rao, Vice President These 2 appeals by the assessee are directed against the 2 separate orders dated 7/12/2024 and 11/12/2024 of the learned CIT (Exemption) whereby the application for registration u/s 12AB and approval u/s 80G of the Act were rejected.
There is a delay of 1 day in filing these two appeals. The assessee has filed a petition for condonation of delay which is supported by an affidavit of the assessee.
We have heard the learned AR as well as the learned DR on condonation of delay of 1 day and perused the contents of Page 1 of 6 the affidavit filed by the assessee. The Managing Trustee of the assessee has explained the cause of delay in the affidavit as under:
4. Accordingly, having considered the reasons explained by the assessee, we are satisfied that the assessee was having sufficient cause for the delay of one day in filing this appeal and therefore, the same is condoned.
The assessee has raised the following grounds of appeal:
“1. The order of the Ld. CIT(E) is erroneous both on facts and in law, is passed in gross violations of principles of natural justice.
2. The Ld. CIT(E) erred in disposing of application for registration under section 12AB of the Act without any finding. 3. Any other ground that may be urged at the time of hearing.”
Page 2 of 6 “1. The order of the Ld. CIT(E) is erroneous both on facts and in law, is passed in gross violations of principles of natural justice.
2. The Ld. CIT(E) erred in not granting approval u/s.80OG of the Act on the alleged ground that no substantial activities which are charitable in nature are being carried out by the Appellant, and that the same are in violation of the provisions of Section 80G of the Act.
3. The Ld. CIT(E) erred in not mentioning which are the activities carried out by the Appellant are not charitable in nature and thereby erred in passing cryptic order rejecting the application filed under Form 10AB for grant of registration u/s.80G of the Act.
Any other ground that may be urged at the time of hearing.”
At the time of hearing, the learned AR of the assessee has pointed out that the impugned order dated 7/12/2024 is not a complete order and there is no finding given by the learned CIT (E) in the said order. Thus, the learned AR has submitted that non-grant of registration to the assessee and passing an incomplete order is not sustainable in law and liable to be set aside.
The learned DR has not disputed the fact that there is mistake in the impugned order as the concluding part in the order is missing.
Having considered the rival submission and careful perusal of the impugned order, we find that the learned CIT (E) has passed the impugned order as under:
Thus, it is clear that after reproducing the notice issued by the learned CIT (E) to the assessee, there is no finding given in the order which is apparently an incomplete and inconclusive order passed by the CIT(E). Thus, the impugned order without giving the concluding finding is non-est one and liable to be set aside. We order accordingly. Since the learned CIT (E) has not decided the application of the assessee seeking registration u/s 12AB by a proper and valid order, therefore, the Page 4 of 6 matter is remanded to the record of the CIT (E) for re- consideration of the application and deciding the same by a speaking order on the basis of the relevant facts as well as the documents/details filed by the assessee.
10. In the appeal against the rejection of application for grant of approval u/s 80G of the Act, the learned AR of the assessee has submitted that the learned CIT (E) has rejected the application on the ground that no substantial charitable activities are being carried out by the assessee. The learned AR has submitted that this finding of the learned CIT (E) is without considering the relevant documentary evidence and details filed by the assessee. Therefore, the impugned order may be set aside and the CIT (E) be directed to grant the approval u/s 80G of the Act.
On the other hand, the learned DR has fairly submitted that since the matter regarding registration u/s 12AB has been remanded to the record of the learned CIT (E) for fresh adjudication, therefore, this matter may also be remanded to the record of the CIT (E) for re-consideration of the application along with the application for registration u/s 12AB of the Act.
Having considered the rival submission and careful perusal of the impugned order, we find that the learned CIT (E) has given the reasons for rejection of the application for approval u/s 80G of the Act in para 3 of the order as under:
Since we have already remanded the matter of registration u/s 12AB of the Act for fresh adjudication after examination of the relevant record, therefore, the impugned order of the learned CIT (E) is also set aside and the matter is remanded to the record of the learned CIT (E) for reconsideration of the approval u/s 80G of the I.T. Act, 1961 in accordance with the same terms and directions.
In the result, both the appeals filed by the assessee are allowed for statistical purposes.
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