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Facts
The assessee's application for registration under section 12AB was rejected by the CIT(E) for non-compliance with notices seeking clarification and documents. The CIT(E) was not satisfied with the genuineness of the activities and compliance with other laws.
Held
The Tribunal condoned the delay in filing the appeal and, considering the facts, found it expedient to restore the matter to the CIT(E). The CIT(E) is directed to re-adjudicate the application after giving the assessee one final opportunity to present its case.
Key Issues
Whether the CIT(E) was justified in rejecting the registration application without giving the assessee a final opportunity to furnish supporting documents, and if the delay in filing the appeal should be condoned.
Sections Cited
12A(1)(ac), 12AB, 17A(2)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH, PUNE
Before: SHRI R.K. PANDA & MS. ASTHA CHANDRA
आदेश / ORDER
PER ASTHA CHANDRA, JM :
The appeal filed by the assessee is directed against the order dated 17.08.2024 of the Ld. Commissioner of Income Tax (Exemption), Pune [“CIT(E)”] whereby he rejected the application of the assessee filed before him on 24.02.2024 in Form No. 10AB under clause (iii) of section 12A(1)(ac) of the Income Tax Act, 1961 (the “Act”).
There is a delay of 166 days in filing of this appeal before the Tribunal for which the assessee has filed an affidavit explaining the reasons for such delay. On perusal of the same, we are satisfied that the delay in filing of appeal is not intentional or deliberate but has occurred for the reasons mentioned in the affidavit. After hearing both the sides, we are of the view that the delay is attributable to the sufficient cause. We, therefore, in light of the decisions of the Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. (1987) 167 ITR 471 (SC) and in the case of Inder Singh Vs. The State of Madhya Pradesh reported in 2025 LiveLaw (SC) 339, condone the said delay and proceed to decide the appeal.
The assessee has raised the following grounds of appeal :
1. On facts and circumstances prevailing in the case and as per provisions & scheme of the Income-tax Act, 1961 ('The Act') it be kindly held that the order passed by the Commissioner of Income Tax-Exemptions ['CIT(E)'], Pune, rejecting the Appellants application for seeking registration u/s 12AB of the Act is against the provisions of the Act. Accordingly, the order passed by the Ld. CIT(E) be held as not tenable in law and be set aside directing the Ld. CIT(E) to grant registration. The appellant be granted just and proper relief in this respect.
2. On facts and circumstances prevailing in the case and as per provisions & scheme of the Act it be kindly held that Appellant be kindly granted an opportunity to furnish relevant documents to prove/substantiate its charitable activities before Ld. CIT(E). Accordingly, the order passed by the Ld. CIT(E) be kindly set aside and Appellant be granted just and proper relief in this respect.
3. The appellant prays to be allowed to add, amend, modify, rectify, delete, raise any grounds of appeal
at the time of hearing.”
4. Briefly stated, the facts of the case are that on receipt of the assessee’s application filed in Form No. 10AB u/s 12A(1)(ac)(iii) of the Act along with annexures thereto, 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, the Ld. CIT(E) issued notice on 26.04.2024 through ITBA portal which was duly served on the assessee requesting the assessee to upload certain information/clarification such as date of commencement of activity, date of expiry of provisional registration, details of any other law applicable for achievement of objectives and the proof of compliance of said law, proof of identity of main trustees/managing trustees/directors/trustees/secretary, list of donors, note on activities carried out in the last three years/inception etc. under the provisions of section 12AB of the Act. The compliance was sought by 13.05.2024. On verification of the details/documents filed by the assessee, the Ld. CIT(E) noticed certain discrepancies which were communicated vide issue of another notice dated 30.07.2024 seeking compliance by 07.08.2024. The said discrepancies are reproduced below : "(i) You have not furnished activity note, kindly furnish the same giving details viz. dates and place of each activity, details of beneficiaries, how they were identified, etc. along with the supporting credible evidence. In absence of any such tangible material in respect of details and proof of activities being carried out, it is not possible to ascertain as to whether the activities are charitable and in line with the objects of the trust/institution. (ii) From the financial statement, it is seen that you have made payment on salary. In this regard you are requested to furnished detailed LIST of salary payments to staff with proof. (iii) In respect of donation details, PAN, complete postal address of donors and receipts no. details are not furnished. Kindly furnish the same. Also furnish the copies of such receipts issued to the donors by your trust. (iv) Trust has taken loans. Purpose of the same and its utilisation for trust objects along with copy of permission under section 36A of the Maharashtra Public Trust Act, 1950 from the Charity Commissioner has not been furnished. Also, relevant schedule is not furnished.
(v) Furnish copies of bill/invoices of expenses done on activities as shown in your financial statement." 4.1 As the assessee failed to furnish any explanation to the discrepancies communicated to it vide the above notice, the Ld. CIT(E) presumed that the assessee has nothing to say in the matter. Having been unable to draw any satisfactory conclusion about the genuineness of the activities of the assessee trust, the Ld. CIT(E) therefore proceeded to pass the impugned order rejecting the application of the assessee and also cancelling the provisional registration earlier granted to the assessee on 08.02.2022 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 08/02/2022 under section 12AB read with section 12A(1)(ac) (vi) of the Income Tax Act, 1961 is hereby cancelled.”
Aggrieved, the assessee is in appeal before the Tribunal and all the grounds of appeal relate thereto.
The Ld. AR submitted that vide its response to the initial notice issued by the Ld. CIT(E), the assessee has submitted all the requisite details/ documents. So far as the discrepancies pointed out by the Ld. CIT(E) vide second notice, he submitted that out of the 5 issues raised therein, the assessee had already submitted its reply to 3 such issues vide his earlier reply filed with the Ld. CIT(E) which is available on record with him. He further submitted that non- compliance before the Ld. CIT(E) was not intentional but resulted due to certain reasons beyond the control of the assessee. He therefore prayed that in the interest of justice an opportunity may be granted to the assessee to substantiate and present its case by furnishing all the detail/ documents sought for by the Ld. CIT(E). Accordingly, the matter may be set aside to the file of the Ld. CIT(E) to adjudicate the same afresh on merits after affording an opportunity of being heard to the assessee.
The Ld. DR had no objection the above request of the Ld. AR.
We have heard the Ld. Representatives of the parties and perused the records and the paper book filed by the Ld. AR on behalf of the assessee. We find that the Ld. CIT(E) has rejected the application of the assessee due to non- compliance to the second notice issued asking for certain clarification/ document evidence as per the discrepancy noted by him including the lack of supporting evidence proving the genuineness of the charitable activities of the assessee trust. Before us, the Ld. AR has demonstrated that most of the information/ details/ documents sought by the Ld. CIT(E) were filed by the assessee and are available on his records. It is also the submission of the Ld. Counsel for the assessee that given an opportunity the assessee is in a position to substantiate its case before the Ld. CIT(E) by filing all the requisite details/ documents as called upon by the Ld. CIT(E). Considering the totality of the facts and in the circumstances of the case enumerated above, we are of the view that it would be judicially expedient and in the interest of justice and fair play, if the matter is restored back to the file of Ld. CIT(E) to consider the assessee’s application afresh and decide the same on merits, in accordance with fact and law after allowing one final opportunity of being heard to the assessee and present its case. Needless to say, the assessee shall provide the requisite support in terms of submitting the relevant details/documentary evidence as may be required/called upon on the appointed date without seeking adjournment under any pretext unless required for sufficient cause, failing which the Ld. CIT(E) shall be at liberty to pass appropriate order as per law. We direct and order accordingly.
In the result, the appeal of assessee is treated as allowed for statistical purposes.
Order pronounced in the open court on 30th July, 2025.