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Facts
The appellant, a charitable trust, applied for regular registration under section 12AB(1)(b)(ii) of the Income Tax Act. The CIT(E) issued notices, but the appellant did not provide complete explanations or attended hearings, leading to the rejection of the application and cancellation of provisional registration.
Held
The Tribunal held that the CIT(E) did not grant sufficient time (less than one week) for the appellant to respond to notices, which violates the principles of natural justice. Therefore, the impugned order was set aside.
Key Issues
Whether the CIT(E) granted sufficient opportunity of hearing and time for compliance to the appellant before rejecting the application for registration.
Sections Cited
12AB, 12A(1)(ac)(iii), 142(1)
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Income Tax Appellate Tribunal, PUNE BENCHES “A”, PUNE
Before: DR.MANISH BORAD & SHRI VINAY BHAMORE
आदेश / ORDER
PER DR. MANISH BORAD, ACCOUNTANT MEMBER :
The captioned appeal at the instance of appellant is against the rejection of application for grant of regular registration u/s.12AB(1)(b)(ii) of the Act framed by ld.CIT(E) dated 13.12.2024.
When the appeal was called for, none appeared on behalf of the appellant eventhough valid notice of hearing was served. We therefore proceed to adjudicate the appeal with the assistance of ld. Departmental Representative.
We have heard the ld. Departmental Representative and perused the record placed before us. In the instant appeal, appellant raised couple of grounds stating that reasonable opportunity of hearing was not granted and ld.CIT(E) has not Amravati District Chemist & Drugist Association considered the information and documents available on record. A prayer is made to set aside the impugned order.
Tersely stated, the appellant is a charitable trust and made application on Form 10AB for grant of regular registration u/s.12A(1)(ac)(iii) of the Act on 30.06.2024. In order to verify the genuineness of activities of the appellant, the ld.CIT (Exemption) issued notice through ITBA portal on 22.08.2024 requiring the appellant to upload certain information. Partial compliance has been made by the appellant. Thereafter, ld.CIT(E) issue another notice dated 04.12.2024 communicating the discrepancies in the information so filed and the compliance was sought on or before 10.12.2024. The appellant has not submitted any explanation to the said notice. Eventually, ld. CIT (Exemption) vide the impugned order dated 13.12.2024 rejected the application filed by the appellant observing as under :
“6. The assessee was requested to show cause as to why the application should not be rejected and why the registration granted under section 12AB 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 registration shall also be liable to be cancelled. The compliance to the said notice was due on 10/12/2024. 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.
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.
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 Amravati District Chemist & Drugist Association 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.
In view of the above, the application filed by the assessee is hereby rejected and the provisional registration granted on 07/10/2022 under section 12AB read with section 12A(1)(ac) (vi) of the Income Tax Act, 1961 is hereby cancelled.” 5. Now the appellant is in appeal before this Tribunal assailing the impugned order.
The appellant is a charitable trust and filed application on Form 10AB for grant of regular registration u/s.12A(1)(ac)(iii) of the Act on 30.06.2024. Assessee made partial compliance. From perusal of the impugned order, we find that none of the notices issued by ld.CIT(E) granted the minimum period of 15 days. This fact clearly demonstrate that ld. CIT(E) has not given sufficient time to the appellant trust for compliance. The time given is a very short period, i.e. less than one week, which is against the Standard Operative Procedure (‘SOP’) issued by the CBDT dated 19.11.2020, wherein, minimum period of 15 days is required to be given to the assessee to comply with notices u/s.142(1) from the date of issue of the notice. The Hon’ble Delhi High Court in the case of Dauphin Travel Marketing Private Limited vs. ITO in W.P.(C) 8870/2023 & CM Nos.33516-17/2023 dated 05.07.2023 taking note of this SOP held that the grant of insufficient time to respond the notice violates the principles of natural justice and, therefore, set-aside the assessment. Thus, it is clear that the appellant trust was given unreasonably very short period of time to respond to the notice, which is against the principles of natural justice.
Amravati District Chemist & Drugist Association 7. Under the given facts and circumstances and considering the grounds raised by the appellant, we are of the considered opinion that it is a fit case to remand the matter to the file of ld. CIT (Exemptions) for de novo consideration in accordance with law. We therefore remit the issue on merits to the file of ld.CIT(E) for necessary adjudication. Needless to mention that the appellant trust in the course of the set aside proceedings shall be afforded a reasonable opportunity of hearing. Appellant is at liberty to adduce all the required supporting documents/evidence substantiating the charitable activities. Assessee is directed to update latest email id and contact detail on ITBA portal. Assessee is also directed to remain vigilant and not to take adjournment unless otherwise required for reasonable cause. Impugned order dated 13.12.2024 is hereby set aside and effective grounds of appeal raised by the appellant are allowed for statistical purposes.
8. In the result, the appeal filed by the appellant trust is allowed for statistical purposes.
Order pronounced on this 22nd day of August, 2025.