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Income Tax Appellate Tribunal, “A” BENCH, PUNE
Before: SHRI R.K. PANDA & MS. ASTHA CHANDRA
आदेश / ORDER
PER ASTHA CHANDRA, JM :
The above two appeals filed by the assessee are directed against the separate orders both dated 16.10.2024 of the Ld. Commissioner of Income Tax (Exemption), Pune (“CIT(E)”) rejecting the application(s) for grant of registration u/s 12A and approval u/s 80G of the Income Tax Act, 1961 (the “Act”). For the sake of convenience, both these appeals were heard together and are being disposed of by this common order. the assessee has challenged the order of the Ld. CIT (E) in rejecting the application for registration u/s 12A of the Act while relates to the order of the Ld. CIT(E) in denying the approval u/s 80G of the Act. in brief, are that the assessee filed an application in Form No.10AB on 27.04.2024 for registration of the trust under clause (iii) of section 12A(1)(ac) of the Act. With a view to verify the genuineness of the activities of the assessee and compliance to requirements of any other law for the time being in force by the trust/institution as are material for the purpose of achieving its objects, a notice was issued through ITBA portal on 03.06.2024 requesting the assessee to upload certain information/clarification. The assessee was asked to file compliance by 18.06.2024. The notice was duly served on the assessee through e-portal and email. The Ld. CIT(E) while going through those details and documents filed along with the application, found various discrepancies for which he issued another notice on 07.10.2024 requesting the assessee for necessary compliance. The assessee, however, again failed to comply with the said notice seeking compliance by 14.10.2024. The said discrepancies recorded by the Ld. CIT(E) in para 4 of the impugned order is reproduced below: “4. … "(i) Note on activity furnished by you is very general. Furnish activity note giving details viz. dates and places of each activities carried out by your trust, details of beneficiaries, how they were identified, etc. (ii) You have not furnish any supporting credible evidences in respect of the activities. Kindly furnish the same. In absence of any such tangible material in respect of proof of activities being carried out it is not possible to arrive at any conclusion about the genuineness of activities and also to ascertain as to whether the activities are in line with the objects of the trust / institution. (iii) Furnish financial statements for FY 2023-24 along with schedules/annexures. (iv) Furnish copies of bill/invoices of expenses done on each activity.
3.1 As the assessee did not furnish any explanation to the discrepancies communicated to it vide notice dated 07.10.2024, the Ld. CIT(E) presumed that the assessee has nothing to say in the matter. Having been unable to draw any satisfactory conclusion about the genuineness of the activities of the assessee trust, the Ld. CIT(E) proceeded to pass the impugned order rejecting the application of the assessee and also cancelling the provisional registration earlier granted to the assessee on 13.10.2023 by observing as under : “7. 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.
8. In view of the above, the application filed by the assessee is hereby rejected and the provisional registration granted on 13/10/2023 under section 12AB read with section 12A(1)(ac)(vi) of the Income Tax Act, 1961 is hereby cancelled.”
Aggrieved with such order of the Ld. CIT(E), the assessee is in appeal before the Tribunal by raising the following grounds:
“1. In the facts and circumstances of the case, the Ld. CIT (E) has erred in rejecting the application of the Appellant Trust u/s 12AB r.w.s. 12A(1) (ac)(iii) terming the activities undertaken by the trust as not genuine.
2. In the facts and circumstances of the case, the Ld. CIT(E) has erred in cancelling the provisional registration granted to the Appellant Trust u/s 12AB r.w.s. 12A(1) (ac) (vi) dtd. 13/10/2023.
3. The appellant craves the permission to add, amend, modify, alter, revise, substitute, delete any or all grounds of appeal, if deemed necessary at the time of hearing of the appeal.”
5. Admittedly, the facts of the case in are similar to that of narrated above. Similar grounds have been raised in ITA No. 2608/PUN/2024 which read as under:
“1. In the facts and circumstances of the case, the Ld. CIT (E) has erred in rejecting the application of the Appellant Trust u/s 12AB r.w.s. 12A(1) (ac)(iii) terming the activities undertaken by the trust as not genuine, by rejecting application of the appellant trust under Sub-Clause (A) of clause (iv) of first proviso to Sub-section (5) of section 80G.
In the facts and circumstances of the case, the Ld. CIT(E) has erred in cancelling the provisional registration granted to the Appellant Trust under Sub-Clause (A) of clause (iv) of first proviso to Sub-section (5) of section 80G dtd. 13/10/2023.
The appellant craves the permission to add, amend, modify, alter, revise, substitute, delete any or all grounds of appeal, if deemed necessary at the time of hearing of the appeal.”
It is the submission of the Ld. AR that since the Ld. CIT(E) has rejected the grant of registration u/s 12A of the Act and cancelled the provisional registration granted earlier, he refused to grant approval u/s 80G of the Act.
The Ld. AR, at the outset submitted that the Ld. CIT(E) has rejected the assessee’s application for registration on account of non-compliance of the second notice/show cause notice wherein certain discrepancies were pointed out by the Ld. CIT(E). He submitted that the non-compliance before the Ld. CIT(E) was not intentional but it was owing to the mistake on the part of the employee of the trust. He therefore prayed that in the interest of justice, the assessee may be provided with an opportunity to present and substantiate its case before the Ld. CIT(E) by filing all the requisite details/ documents to his satisfaction and the matter may be restored back to his file for fresh adjudication on merits.
The Ld. DR, on the other hand, supported the order of the Ld CIT(E).
We have heard Ld. Representatives of the parties, perused the material available on record. It is an admitted fact that the assessee filed some response to the initial notice issued by the Ld. CIT(E), however, the same was not to the satisfaction of the Ld. CIT(E) and he issued another notice pointing out the discrepancies (reproduce above). As the assessee failed to respond, the Ld. CIT(E) rejected the application of the assessee u/s 12A of the Act. The assessee’s application for grant of approval u/s 80G has also been rejected by the Ld. CIT(E) on the similar grounds. Further, since the application for grant of registration u/s 12A of the Act was rejected and the provisional registration granted earlier was cancelled, he also rejected the application for grant of approval u/s 80G of the Act.
Considering the totality of the facts and in the circumstances of the case enumerated above and in the interest of justice, we deem it proper, to set aside the impugned order(s) of the Ld. CIT(E) and restore the issue(s) to his file with a direction to grant one final opportunity to the assessee to explain and substantiate its case to his satisfaction by filing the requisite details as may be required/ called upon and decide both the applications of the assessee under section 12A and 80G of the Act afresh as per fact and law. The assessee is also hereby directed to remain vigilant and make his submissions on the appointed date without seeking any adjournment under any pretext unless required for the sufficient cause, failing which the Ld. CIT(E) shall be at liberty to pass appropriate order(s) as per law.
We hold and direct accordingly. The grounds raised by the assessee in both the appeals are accordingly allowed for statistical purposes.
In the result, both the appeals in & 2620/PUN/2024 filed by the assessee are allowed for statistical purposes.
Order pronounced in the open court on 30th September, 2025.