OM MARSHAL ART AND SOCIAL SERVICE ASSOCIATION,DAUND vs. CIT EXEMPTION, PUNE

The assessee has raised the following grounds of appeal : “1. The Learned CIT (Exemption) erred in law and on facts by rejecting Application filed in Form 10AB under clause (iii) of first proviso to Subsection (5) of Sec 80G of Income Tax Act, 1961 on the sole ground that 2 information called under clause (ii) of second proviso to Subsection (5) of Sec 80G of Income Tax Act, 1961 was not furnished. 2. The Learned CIT (Exemption) erred in assuming that the Appellant is not Having any supporting documents/ evidence to submit in support of its application. 3. The Appellant submits that the notices issued were sent on e-mail ID which belongs to the tax consultant of the Appellant. The said consultant did not inform the Appellant about such notices and hence, the Appellant was not aware of the notices issued by the Learned CIT (Exemption) and Accordingly, there was a reasonable cause on the part of the Appellant in not responding to the notices issued by the learned CIT (Exemption). 4. It is humbly requested that, considering the genuineness of the activities of the Trust, the Appellant be given one more opportunity to furnish details since rejection of application by Learned CIT (Exemption) Pune will cause hardships to the Appellant. 5. The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal.”

The brief facts are that on receipt of the assessee’s application filed in Form No. 10AB under clause (iii) of first proviso to section 80G(5) of the Act along with annexures thereto, with a view to verify the genuineness of the activities of the assessee and fulfillment of the conditions laid down in clauses (i) to (v) of section 80G(5) of the Act, the Ld. CIT(E) issued notice on 22.07.2024 which was duly served through ITBA portal/email requesting the assessee to upload certain information/clarification such as date of commencement of activity, date of expiry of provisional approval, details of any other law applicable for achievement of objectives and the proof of compliance of said law, proof of identity of main trustees/directors /trustees, year-wise list of donations received, note on activities carried out etc. The compliance was sought by 06.08.2024. Since the assessee failed to respond, another notice was issued and duly served on the assessee on 03.10.2024, requesting it to show cause as to why the application should not be rejected and why the approval granted u/s 80G(5) of the Act should not be cancelled seeking the compliance by 10.10.2024. As the assessee once again failed to furnish compliance, the Ld. CIT(E) concluded that the assessee is not having any supporting documents/evidence to submit. Having been unable to draw any satisfactory conclusion about the genuineness of the activities of the trust, the Ld. CIT(E) proceeded to pass the impugned order rejecting the assessee’s application u/s 80G(5) of the Act by observing as under : “5. The information / details were called for under the provisions of sub-clause (a) of clause (ii) of second proviso to section 80G(5) of the Income Tax Act, 1961. These are the basic details required to ascertain the overall nature of the activities of the assessee and are directly relevant to the present proceedings.

Thus, the assessee has failed to furnish the details called for under the provisions of sub-clause (a) of clause (ii) of second proviso to section 80G(5) of the Income Tax Act, 1961 to verify the genuineness of activities of the trust or institution and fulfillment of conditions laid down in clauses (i) to (v) of Section 80G(5) of the Act.

In absence of the compliance to the above requirement, it is not possible to arrive at any conclusion about the genuineness of activities of the assessee and fulfillment of conditions laid down in clauses (i) to (v) of Section 80G(5) of the Act.

It is clear from the above that the assessee was given sufficient opportunity to comply, but it has not complied to the same. It seems that the assessee is not having any supporting documents / evidence to submit. The assessee has failed to comply with the provisions of sub-clause (a) of clause (ii) of second proviso to section 80G(5) of the Income Tax Act, 1961 and hence, the undersigned is unable to draw any satisfactory conclusion about genuineness of activities of the assessee and fulfillment of conditions laid down in clauses (i) to (v) of Section 80G(5) of the Act and has left no alternative but to reject the application.

As per the condition vide clause (i) of section 80G(5) of the Income Tax Act, 1961, the approval is available only if the income of the institution or fund is not be liable to inclusion in its total income under the provisions of section 11 and 12 or clause (23AA) / clause (23C) of section 10 of the Income Tax Act, 1961. Exclusions for the said condition are detailed in clause (a), (b) and (c) of proviso to clause (i) of section 80G(5) of the Act. Therefore, the institution / fund is required to be regularly registered / approved either under section 12AB or 10(23AA) or 10(23C) of the Income Tax Act, 1961 or the institution / fund shall be a Regimental Fund or Non-Public Fund established by the armed forces of the Union for the welfare of the past and present members of such forces or their dependents.

In the instant case it is noticed that the assessee is neither regularly registered u/s 12AB read with section 12A(1)(ac)(i) /12A(1)(ac)(iii) nor having regular approval under section 10(23C) read with clause (i) / (iii) of first proviso to the said section and the case is not covered under the exclusions provided vide proviso to clause (i) of section 80G(5) of the Act. The assessee is not approved under section 10(23AA) of the Act. The assessee is also not a Regimental Fund or Non-Public Fund established by the armed forces of the Union for the welfare of the past and present members of such forces or their dependents. In fact, the application of the assessee in form No. 10AB for registration u/s 12AB filed under the provisions of section 12A(1)(ac)(iii) of the Act has been rejected vide order dated 18/10/2024. Therefore, the condition (i) of section 80G(5) of the Income Tax Act, 1961 is also not fulfilled in this case.

In view of the above, the application filed by the assessee is hereby rejected and the provisional approval dated 16/02/2022 under section 80G(5)(vi) read with clause (iv) of first proviso to section 80G(5) of the Act is hereby cancelled.”

Aggrieved, the assessee is in appeal before the Tribunal and all the grounds of appeal relate thereto.

We have heard the Ld. DR and perused the material available on record. We find that despite number of opportunities granted by the Ld. CIT(E), the 4 assessee did not make any submission before him for which he was constrained to reject the application of the assessee for registration u/s 80G of the Act and also cancelling the provisional registration granted earlier to the assessee for the reasons reproduced in the preceding paragraph. Perusal of the order sheet entries shows that this appeal was fixed for hearing several times, however, no appearance of any one is there for and/or on behalf of the assessee and no adjournment application has ever been filed. Thus, even before us nothing has been brought on record by the assessee so as to enable us to take a view contrary to the view taken by the Ld. CIT(E) in his impugned order. Accordingly, the appeal filed by the assessee is dismissed.

In the result, the appeal of the assessee is dismissed.

अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT concerned. 4. दिभ गीय प्रदिदनदि, आयकर अपीलीय अदिकरण, “ए” बेंच, पुणे / DR, ITAT, “A” Bench, Pune. 5. ग र्ड फ़ इल / Guard File.