KACHHI DASA OAWAL JAIN DNYATI MAHAJAN SEVABHAVI SANSTHA ,NASHIK vs. CIT, EXEMPTION, PUNE

Facts of the case, in brief, are that the assessee filed an application in Form No.10AB on 25.10.2024 for registration of the trust under section 12A(1)(ac)(vi)- ITEM(B) 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 23.11.2024 requesting the assessee to upload certain information / clarification. The assessee in response to the notice issued by the Ld. CIT(E) filed certain details. 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 the assessee to explain on account of those discrepancies. Since the assessee did not respond to the same, the Ld. CIT(E) rejected the application for grant of registration u/s 12A of the Act by observing as under: “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.

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.

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.

Aggrieved with such order of Ld. CIT(E), the assessee is in appeal before the Tribunal by raising the following grounds:

The Ld. Counsel for the assessee submitted that due to preoccupation of the concerned Chartered Accountant, the details could not be filed. He submitted that given an opportunity the assessee is in a position to substantiate its case by filing all the relevant details for deciding the issue afresh. He accordingly submitted that the matter may be restored to the file of the Ld. CIT(E).

We have heard the rival arguments made by both the sides, perused the order of the Ld. CIT(E) and the paper book filed on behalf of the assessee. It is an admitted fact that due to non-compliance to the 2nd notice issued by the Ld. CIT(E) asking for certain clarifications regarding the discrepancies pointed out by him, he rejected the application for grant of registration and also cancelled the provisional registration granted earlier. It is the submission of the Ld. Counsel for the assessee that given an opportunity the assessee is in a position to substantiate its case by filing all the relevant details before the Ld. CIT(E). 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 CIT(E) 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 CIT(E) on the appointed date without seeking any adjournment under any pretext, failing which the CIT(E) 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.