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Facts
The assessee filed an application for registration u/s 12A and approval u/s 80G. The CIT(E) rejected the applications citing non-compliance with notices and lack of satisfactory explanation regarding the genuineness of activities and donor details.
Held
The Tribunal held that the assessee failed to provide complete details in response to the notices, particularly donation receipts, leading to the rejection by the CIT(E). However, considering the interest of justice, the Tribunal set aside the CIT(E)'s order.
Key Issues
Whether the CIT(E) was justified in rejecting the applications for registration u/s 12A and approval u/s 80G due to non-compliance with notices, and whether a final opportunity should be granted to the assessee.
Sections Cited
12A, 80G, 12AB(1)(b)(i), 17A(2), 12A(1)(ac)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH, PUNE
Before: MS. ASTHA CHANDRA & SHREE DR. DIPAK P. RIPOTE
आदेश / ORDER
PER ASTHA CHANDRA, JM :
The above two appeals filed by the assessee are directed against the separate orders both dated 16.01.2025 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 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 03.08.2024 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 21.10.2024 requesting the assessee to upload certain information/clarification. The assessee was asked to file compliance by 05.11.2024. 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 03.01.2025 requesting the assessee for necessary compliance by 10.01.2025. The said discrepancies recorded by the Ld. CIT(E) in para 4 of the impugned order is reproduced below: “4. … "(i) it is seen from the Financial statements that there is addition to corpus/trust funds. Sources of the same, if by way of donations, please furnish details of donors i.e. full name and address of donor/PAN/date and mode of donation, amount, receipt no. issued, copies of donation receipts and specific directions from donors.”
3.1 The assessee failed to comply to the above show cause notice in the absence of any explanation to the discrepancies communicated to it, the Ld. CIT(E) presumed that the assessee has nothing to say in the matter. Consequently, 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 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 27/12/2023 under Item (A) of sub-clause (vi) of clause (ac) of sub-section (1) of section 12A 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. Order passed by Hon. CIT Exemption (Pune) is not according to law. It is unjust.
2. Justice is not given by giving final opportunity in such a crucial matter which has far reaching effects for the assessee.
3. Rejection of application of approval u/s 12-A and also cancelling the Provisional approval granted vide order dated 27/12/2023 is not proper.
4. The appellant craves leave to add, delete, alter, modify the above grounds of appeal.”
5. Admittedly, the facts of the case in narrated above. Similar grounds have been raised in challenging the rejection of approval u/s 80G which read as under: “1. Order passed by Hon. CIT Exemption (Pune) is not according to law. It is unjust.
Justice is not given by giving final opportunity in such a crucial matter which has far reaching effects for the assessee.
Rejection of application of approval u/s 80-G and also cancelling the Provisional approval granted vide order dated 27/12/2023 is not proper.
4. The appellant craves leave to add, delete, alter, modify the above grounds of 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 submitted that full details could not be furnished inadvertently in response to the discrepancies pointed out by the Ld. CIT(E) vide issue of show cause notice/second notice. Whilst the assessee had submitted the basic details called for vide initial notice which included the year wise details of donations received (pages 13-17 of the paper book refers), copies of donation receipts could not be submitted. The Ld. AR submitted that given an opportunity the assessee is now in a position to file all the details/ documents as desired by the Ld. CIT(E). He therefore prayed for one more opportunity to be granted to the assessee to present and substantiate its case before the Ld. CIT(E) by filing the requisite details/documents.
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 order of the Ld. CIT(E) and paper book filed by the Ld. AR on behalf of the assessee. It is an admitted fact that the assessee filed some response to the initial notice issued by the Ld. CIT(E) wherein year wise details/list of donors along with their full address, PAN, donation type, mode of receipt and amount was furnished by the assessee (page 17 of the paper book refers). Only the donation receipts remained to be filed. It is thus evident that most of the details called for by the Ld. CIT(E) vide second notice/show cause notice were already furnished except the donation receipts. Due to the non-compliance to the said notice, the Ld. CIT(E) rejected the application of the assessee u/s 12A for the reason recorded in para 7 (reproduced above) of his impugned order. 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. Before us, the Ld. AR has admitted that there was non-compliance to the second notice/show cause notice however, the said notice was inadvertently missed by the assessee as the e-mail went to the spam folder/box.
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 u/s 12A and 80G of the Act afresh as per fact and law. The assessee is also hereby directed to remain vigilant in accessing e-mails 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 & 682/PUN/2025 filed by the assessee are treated as allowed for statistical purposes.
Order pronounced in the open court on 30th September, 2025.