Loading judgment…
Facts
The assessee filed applications for registration under section 12A and approval under section 80G of the Income Tax Act, 1961. The CIT(E) rejected these applications and cancelled the provisional registration due to non-compliance with notices and failure to provide required information.
Held
The Tribunal held that the assessee was not given sufficient opportunity to comply with the notices and that there was a reasonable cause for the non-compliance. The Tribunal set aside the order of the CIT(E) and remanded the case for de-novo adjudication, allowing the assessee to present all relevant documents.
Key Issues
Whether the rejection of registration under section 12A and approval under section 80G by the CIT(E) was justified due to non-compliance with notices. Whether the assessee should be granted another opportunity to provide necessary documents.
Sections Cited
12A, 80G, 12A(ac), 12AB, 12AC, 12AB(1)(b)(i), 12A(1)(ac)(vi)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCHES “A” :: PUNE
Before: DR.DIPAK P. RIPOTE & SHRI VINAY BHAMORE
PER DR. DIPAK P. RIPOTE, AM: These two appeals filed by the Assessee are against the separate orders of ld. Commissioner of Income Tax(Exemption), Pune rejecting the applications for grant of registration 12A and approval u/s.80G and of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). For the sake of convenience, these two appeals were heard together and are being disposed of by this common order. The Assessee in has raised the following grounds of appeal:
1. “1. On the facts and in the prevailing circumstances of the case and in law, the learned CIT-Exemption, Pune has erred in rejecting the application in form no 10AB under clause (iii) of section 12A(ac) for permanent registration without giving reasonable opportunity of being heard. The order of the CIT Exemption, Pune may kindly be set aside and permanent registration u/s 12AB may kindly be granted with the restoration of provisional registration granted on 28-05-2021 u/s 12AC r.w.s. 12A(1)(ac)(vi).
2. On the facts and in the prevailing circumstances of the case and in law, the learned CIT-Exemption, Pune has erred in rejecting the application in form no 10AB under clause (iii) of section 12A(ac) for permanent registration in a summary manner, without considering the information and documents available on record viz., Income tax returns for AY 2022-23,2023-24,2024-25 and other mandatory required documents viz., MOA, AOA, Incorporation certificate and financial Statements filed along with application for permanent registration. The order of the CIT Exemption, Pune may kindly be set aside and permanent registration u/s 12AB may kindly be granted with the restoration of provisional registration granted on 28-05-2021 u/s 12AC r.w.s. 12A(1)(ac) (vi).
3. The Appellate craves the right to add, amend, modify, alter, revise, substitute, delete any or all grounds of the appeal, if deemed necessary at the time of hearing of the appeal.”
Findings & Analysis :
We have heard both the sides and perused the material available on record. We observe that appellant filed an application in Form No.10AB for registration of the trust under clause (iii) of section 12A(1)(ac) of the Act on 29.06.2024. 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, ld.CIT(E) issued notice through ITBA portal on 08.08.2024 requesting the assessee to upload certain information/ details contained therein by 22.08.2024, followed by another notice issued 2 on 24.09.2024 seeking compliance by 01.10.2024 as the assessee failed to comply to the initial notice. Assessee has not complied any of the notices. Eventually, ld.CIT(E) vide order dated 10.10.2024 rejected the application observing as under :
“5. The information / details were called for under the provisions of section 12AB(1)(b)(i) 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. However, the assessee has failed to comply despite giving sufficient opportunities as discussed above including an opportunity of being heard.
Thus, the assessee has failed to furnish the details called for under the provisions of section 12AB(1)(b)(i) of the Income Tax Act, 1961 to verify the genuineness of activities of the trust / institution and to verify the 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.
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 the compliance to the 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.
8. 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 section 12AB(1)(b)(i) of the Income Tax Act, 1961. Hence, the undersigned is unable to draw any satisfactory conclusion about genuineness of activities of the assessee and the compliance to the 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. Therefore, the undersigned has left no alternative but to reject the application.
In view of the above, the application filed by the assessee is hereby rejected and the provisional registration granted on 28/05/2021 under section 12AB read with section 12A(1)(ac) (vi) of the Income Tax Act, 1961 is hereby cancelled.”
During the course of hearing before us, ld.AR of the Assessee submitted that Accountant Mr. Vedant Bhadait has access to the 3 email id of the trust. He resigned the job and the Directors were not aware of the notices. Appellant could not reply to the notices. Therefore, he prayed for providing one more opportunity to the appellant to file the requisite details in support of the activities carried out by the appellant. Ld. DR although supported the order of ld.CIT(E) did not oppose if the matter is remitted back to the file of ld.CIT(E).
In these facts and circumstances, we are of the considered view that an opportunity to the appellant shall meet the ends of justice. We therefore set aside the order of ld.CIT(E) to the Ld.CIT(E) for de-novo adjudication. The Ld.CIT(E) shall provide opportunity of hearing to the assessee and assessee shall file all relevant documents to substantiate the nature of activities carried out by it.
In the result, the Grounds of appeal raised by the assessee are allowed for statistical purpose.
6. In this appeal also, appellant has raised similar grounds. The facts are also similar. Assessee has not complied any of the notices issued by ld.CIT(E). Ld. AR submitted that due to the aforestated ‘reasonable cause’ appellant could not reply to the notices.
7. Since we have set aside the issue of Registration u/s.12A to ld.CIT(E), we also set aside the order u/s.80G to CIT(E) for de-novo adjudication. The Ld.CIT(E) shall provide opportunity of hearing to the assessee and assessee shall file all relevant documents. 4
In the result, the Grounds of appeal raised by the assessee are allowed for statistical purpose.
Order pronounced in the open Court on 29th August, 2025.