PREM BHAKTI SADHANA KENDRA,NASHIK vs. CIT(EXEMPTION), PUNE, PUNE

Considering the above facts discussed in the show notice and discrepancies noticed and also that the assessee has not complied with the provisions of section 12AB(1)(b)(i) of the Income Tax Act, 1961 as well as the provisions of Rule 17A(2) of Income Tax Rules, 1962 in spite giving sufficient opportunities, the undersigned is unable to draw any satisfactory conclusion about the genuineness of activities of the assessee and compliance of requirements of any other law for the time being in force by the assessee as are material for the purpose of achieving its objects.

Being aggrieved, the appellant trust is in appeal before this Tribunal assailing the impugned order denying the grant of regular registration.

Before us, the ld. AR submitted that the assessee could not furnish details to the second notice given by the ld. CIT(Exemption). The time for compliance is less than 15 days which falls short of legal requirement of atleast giving 15 days time to respond to the notice. Therefore, in the interest of justice, prayed for remanding the matter to the file of ld.CIT(Exemption) for furnishing the requisite details.

We heard the rival submissions and perused the relevant material on record. We find, in the present case, the assessee trust filed application in Form No.10AB dated 29.05.2024 seeking registration u/s.12A(1)(ac)(iii) of the Act. Assessee made partial compliance to the first notice issued by ld.CIT(E), however, failed to comply with the second notice issued by ld.CIT(E). On perusal of the contents of para nos. 4 and 5 of the impugned order, reveal that notice 04.10.2024 was issued to the appellant trust through ITBA portal requesting the appellant trust to file explanation to the discrepancies pointed out in the said notice, on or before 11.10.2024. Undisputedly, the time given to the appellant trust for compliance is less than a week, which is against the Standard Operative Procedure (‘SOP’) issued by the CBDT dated 19.11.2020, wherein, minimum period of 15 days is required to be given to the assessee to comply with notices u/s 142(1) from the date of issue of the notice. Hon’ble Delhi High Court in the case of Dauphin Travel Marketing Private Limited vs. ITO in W.P.(C) 8870/2023 & CM Nos.33516-17/2023 dated 05.07.2023 taking note of this SOP held that the grant of insufficient time to respond the notice violates the principles of natural justice and, therefore, set-aside the assessment. Thus, it is clear that the appellant trust was not given reasonable time to respond to the notice, which is against the principles of natural justice. In the light of the aforementioned facts, we set aside the impugned findings and remand the issues raised in the instant appeal to the file of ld. CIT (Exemption) for de novo consideration of application filed for getting final registration u/s.12A r.w.r.t 12AB of the Act in accordance with law. Effective grounds of appeal raised are allowed for statistical purposes.

We find that similar approach was adopted by the ld. CIT(Exemption) while dealing with the application filed by the appellant trust in Form No.10AB for grant of approval u/s.80G(5) of the Act. Since we have remitted the issue of regular registration u/s.12A of the Act to ld.CIT(E), therefore, the issue of granting approval u/s.80G is also remitted to the file of ld. CIT(Exemption) for afresh adjudication as per the terms indicated above. Effective grounds of appeal raised are allowed for statistical purposes.