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Facts
The assessee, Akhil Bharatiya Maheshwari Educational & Charitable Trust, filed an application for registration under Section 12A(1)(ac)(iii) of the Income Tax Act. The CIT(E) rejected the application, citing non-compliance with notices and various discrepancies in the provided information. The assessee claimed the non-compliance was due to technical glitches and non-communication with the consultant.
Held
The Tribunal held that it would be in the interest of justice and fair play to restore the matter to the file of the CIT(E) for fresh consideration. The assessee is to be granted one final opportunity to submit all required details and evidence.
Key Issues
Whether the CIT(E) erred in rejecting the application for registration due to alleged non-compliance and discrepancies, and if the assessee should be granted a final opportunity to present its case.
Sections Cited
12A, 12A(1)(ac), 12AA(1)(b)(i), 12AB, 13(3), 36A
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 05.11.2024 of the Ld. Commissioner of Income Tax (Exemption), Pune [“CIT(E)”] whereby he rejected the application of the assessee filed before him on 27.05.2024 in Form No. 10AB under clause (iii) of section 12A(1)(ac) of the Income Tax Act, 1961 (the “Act”).
The assessee has raised the following grounds of appeal :
1. The Learned Commissioner of Income Tax (Exemptions) ["CIT(E)"] erred in not granting permanent registration u/s 12AB and erred in cancelling provisional registration by the impugned order.
2. The Ld. CIT(E) erred in not appreciating the fact that on the basis of same objects and activities of the trust, the approval u/s 12AA(1)(b)(i) was already granted vide certificate dated 09.01.2008 by the Ld. CIT- I, Pune and, therefore, the activities of the trust are genuine and registration ought to have been granted.
3. The Ld. CIT(E) erred in not appreciating the fact that the substantial details were already on record vide submission dated 11.07.2024 and the trust is eligible for registration. The impugned order rejecting the registration may kindly be quashed.
4. The Ld. CIT(E) erred in rejecting the application for non-compliance of notice dated 16.10.2024. The Ld. CIT(E) in the said notice has pointed out the discrepancies which are not arising out of the details submitted on 11.07.2024 and the alleged discrepancies are of common nature and not particular to the facts of this case. In view of this the order of Ld. CIT(E) cannot be upheld.
5. The Ld. CIT(E) erred in calling for the details of ownership of land and building when it was already there on record vide submission dated 11.07.2024.
In view of ground no. 5 and many other such points arising out of notice dated 16.10.2024 are opposed to the facts of the case and indicates lag in appreciating the submission by the Ld. CIT(E) and therefore his order rejecting approval may kindly be set aside.
7. The appellant prays for opportunity as details submitted on ITBA portal and actual submission of the appellant is at variance in terms of details submitted. The technical glitch arisen in uploading the submission require adequate opportunity for making submission and seeking approval. The same may kindly be allowed.
8. Without prejudice if any of the points of notice dated 16.10.2024 are remained to comply, the appellant request for adequate opportunity and pray for approval u/s 12AB of the Act.
The appellant may kindly be granted appropriate relief as per the law. The appellant craves leave to add, amend, omit or alter any of the grounds before or at the time of the hearing.”
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 26.06.2024 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 11.07.2024. On verification of the details/documents filed by the assessee, the Ld. CIT(E) noticed various discrepancies which were communicated vide issue of another notice dated 16.10.2024 duly served upon the assessee via e- portal/email. The said discrepancies are reproduced below : "(i) Since you have claimed to be engaged in running of educational institution(s), please furnish the following: (i) Details of various institutes / schools / colleges run by the trust with granted/non-granted status.
(ii) Copies of affiliation certificates. (iii) Details of institute wise fee structure, admission policy in respect of each of the institute. (iv) Institute-wise Income account for the last 3 years. (v) Complete Financial statements for the last 3 years with all Schedules/ Annexures. (vi) Copies of Audit report for the last 3 years. (vii) Details of admissions given to students from financially weaker sections of the society with evidence and RTE norms followed with evidence. (viii) Institute wise details of ownership of land and building for with evidence. If rented, copy of rent agreement and proof of ownership of the owner. (ix) Furnish details as to whether the land is owned by the persons covered u/s 13(3) of the Act. (x) Institute wise details of immovable properties and building constructions appearing in balance sheet. (xi) Detailed list of salary payments to teaching and non-teaching staff along with TDS made, PF deducted, Profession Tax Deducted and copies of TDS returns & Profession Tax Returns filed for the last 3 years. (xii) Year-wise details of addition to building fund and other funds with evidence of its source. (xii) Complete details of loans raised for the last 3 years and its utilization for each of the institution project along with copy of permission under section 36A of the Maharashtra Public Trust Act, 1950 from the Charity Commissioner. (ii) You have not furnished point-wise reply to the initial notice. The basic details such as date of commencement of activities, details of religious objects, details of business undertakings, donors list, details of relevant Laws for achievement of objectives with proof of compliance, and other related details were called for vide the said notice. But you have not furnished the same till date. Thus, you have failed to comply with the provisions of section 12AB(1)(b)(i) of the Income Tax Act, 1961. (iii) Kindly furnish evidences claiming expenses on charitable activities such as bills/vouchers/invoices alongwith photographs of charitable activities actually carried out by your trust. (iv) You were specifically requested to furnish year-wise list of all donations received (including corpus donations etc.) during the last 3 years / since inception, whichever is later viz. name of donor, address of donor, amount of donation, mode of donation / receipts etc. PAN nos. vide initial notice. You have not furnished the details as required in above format. Please furnish the same. (v) It is seen from your submission that you have not furnished note on activity giving details viz. dates and places of each activities carried out by you, details of beneficiaries, how they were identified, etc. As per the provisions of Rule 17A(2)(k) /11AA(2)(h) of the Income Tax Rules, 1962, the application in Form No. 10AB shall be accompanied by note on activities giving details of activities actually carried out but you have failed to comply with those provisions. You ought to be submit the details of actual activities carried out in the last 3 years or since Inception, whichever is later. Further, the supporting evidence of the activities in the form bills and photographs are also not submitted by you. 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. (vi) Complete Financial statements and audit reports for the last 3 years with all Schedules / Annexures."
3.1 The assessee failed to respond to the above notice by the due date of 23.10.2024. Since, the assessee did not furnish any explanation to the discrepancies communicated to it, 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) proceeded to pass the impugned order rejecting the application of the assessee and also cancelling the provisional registration earlier granted to the assessee on 27.05.2021.
Dissatisfied, the assessee is in appeal before the Tribunal and all the grounds of appeal relate thereto.
The Ld. AR submitted the assessee made part compliance before the Ld. CIT(E) and most of the requisite details/ documents called upon by the Ld. CIT(E) in the second notice are already available with him (pages 14 to 131 and 137 to 147 of the Paper Book refers) he submitted that non-compliance to the second notice was not intentional but occurred on account of non- communication from the assessee to the consultant and also owing to technical glitch arisen in uploading the submission on ITBA portal. He submitted that given an opportunity the assessee is in a position to submit all the requisite details/documentary evidence before the Ld. CIT(E) in support of its application and respond to the discrepancies noticed by the Ld. CIT(E) to his satisfaction. He, therefore, prayed that 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.
6. 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. It is an admitted fact that due to non-compliance to the second notice issued by the Ld. CIT(E) asking for clarification/documents as per the discrepancies noted by the Ld. CIT(E), the Ld. CIT(E) rejected the assessee’s application for grant of registration u/s 12A of the Act 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 supporting details/documents/ evidence before the Ld. CIT(E). Considering the totality of the facts and in the circumstances of the assessee’s case, 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 for registration 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 for required for sufficient cause, failing which the Ld. CIT(E) shall be at liberty to pass appropriate order as per law. We order accordingly.
In the result, the appeal of assessee is treated as allowed for statistical purposes.
Order pronounced in the open court on 28th July, 2025.