MOTIBHAI DOSHI FOUNDATION ,KOLHAPUR vs. CIT EXEMPTION , PUNE

There is a delay of 56 days in filing of this appeal before the Tribunal for which the assessee has filed a condonation application along with an affidavit explaining the reasons for such delay. After considering the contents of the condonation application filed along with the affidavit and after hearing the Ld. DR, the delay in filing of the appeal is condoned and the appeal is admitted for adjudication.

Facts of the case, in brief, are that the assessee filed an application in Form No.10AB on 26.03.2024 for approval of the trust under clause (iii) of first proviso to sub section (5) of section 80G of the Act. With a view to verify the genuineness of the activities of the assessee and fulfilment of conditions laid down in clause (i) to (v) of section 80G of the Act, a notice was issued through ITBA portal on 20.05.2024 requesting the assessee to upload certain information / clarification. The assessee was also requested to submit the compliance by 04.06.2024. On verification of the details submitted by the assessee, the Ld. CIT(E) noted various discrepancies for which another notice was issued to the assessee asking it to explain on account of those discrepancies. The assessee was specifically informed that in the event of failure to comply by the due date, the application shall be liable to be rejected and the approval shall also be liable to be cancelled. However, the assessee did not make any submission. Therefore, the Ld. CIT(E) was not satisfied about the genuineness of the activities of the assessee and fulfilment of conditions laid down in clause (i) to (v) of section 80G of the Act for which he rejected the application for grant of approval u/s 80G by observing as under: “5. The assessee was requested to show cause as to why the application should not be rejected and why the approval granted under section 80G(5) of the Income Tax Act, 1961 should not be cancelled. The assessee was also given opportunity of being heard vide the said notice. The assessee was specifically informed that in the event of failure to comply by the due date, the application shall be liable to be rejected and the approval shall also be liable to be cancelled. The compliance to the said notice was due on 20/08/2024. The notice was duly served on the assessee through e-portal and email. However, the assessee neither submitted explanation to the show cause notice till date nor availed the opportunity of being heard. 6. Since, the assessee has not furnished any explanation to the discrepancies communicated to it, it is presumed that the assessee has nothing to say in the matter.

Aggrieved with such rejection of approval u/s 80G by Ld. CIT(E), the assessee is in appeal before the Tribunal by raising the following grounds:

The Ld. Counsel for the assessee at the outset submitted that due to non compliance to the second notice issued by the Ld. CIT(E), he rejected the application for approval u/s 80G of the Act and also cancelled the provisional approval granted earlier. He submitted that given an opportunity, the assessee is in a position to substantiate its case by filing the requisite details before the Ld. CIT(E). He accordingly submitted that in the interest of justice, the assessee should be given an opportunity to substantiate its case by filing the requisite details before the Ld. CIT(E).

The Ld. DR on the other hand heavily relied on the order of Ld. CIT(E) rejecting the application for grant of approval u/s 80G of the Act.

We have heard the rival arguments made by both the sides and perused the order of the Ld. CIT(E). It is an admitted fact that despite sufficient opportunities granted by the Ld. CIT(E), the assessee did not respond to the 2nd notice for which he rejected the application for grant of approval u/s 80G of the Act, the reasons of which have already been reproduced in the preceding paragraphs. It is the submission of the Ld. Counsel for the assessee that due to the mistake of the accountant of the trust, those details could not be filed. It is also his submission that given an opportunity, the assessee is in a position to substantiate its case by filing the requisite details before the Ld. CIT(E) to his satisfaction. Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the Ld. CIT(Exemption) with a direction to grant one final opportunity to the assessee to substantiate its case by filing the requisite details to his satisfaction and decide the issue as per fact and law. The assessee is also hereby directed to submit the details as called for by the Ld. CIT(E) on the appointed date without seeking any adjournment under any pretext, failing which the Ld. CIT(Exemption) is at liberty to pass appropriate order as per law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.

In the result, the appeal filed by the assessee is allowed for statistical purposes.