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Facts
The assessee filed applications for registration under Section 12A and approval under Section 80G. The CIT(E) rejected these applications, citing a lack of specific details, insufficient evidence of activities, and non-compliance with other laws. The CIT(E) noted discrepancies in the financial statements and activity notes provided by the assessee.
Held
The Tribunal set aside the orders of the CIT(E) and restored the issue to his file. The CIT(E) is directed to grant one final opportunity to the assessee to present and substantiate its case by filing requisite details. The applications under Section 12A and 80G are to be decided afresh thereafter.
Key Issues
Whether the CIT(E) was justified in rejecting the applications for registration under Section 12A and approval under Section 80G without granting a final opportunity for the assessee to provide complete details and evidence of its activities.
Sections Cited
12A, 80G, 12A(1)(ac), 12AB
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Income Tax Appellate Tribunal, “A” BENCH, PUNE
Before: SHRI R.K. PANDA & MS. ASTHA CHANDRA
आयकर अपील सं. / & 2503/PUN/2024 Aum Chaitanya P PU Shree CIT (Exemption), Pune Rameshwaray Dham, Damodar Society, Row House No. 6, Vs. Survey No. 644/1, Lane No. 4, Bibwewadi, Pune-411037 PAN : AAKTA3079R अपीलार्थी / Appellant प्रत्यर्थी / Respondent Assessee by : Smt. Deepa Khare Department by : Shri Amol Khairnar Date of hearing : 17-06-2025 Date of 24-07-2025 Pronouncement : आदेश / ORDER
PER ASTHA CHANDRA, JM :
The above two appeals filed by the assessee are directed against the separate orders both dated 25.10.2024 of the Ld. Commissioner of Income Tax (Exemption), Pune (“CIT(E)”) rejecting the application(s) for grant of registration u/s 12A and approval u/s 80G of the Income Tax Act, 1961 (the “Act”). For the sake of convenience, both these appeals were heard together and are being disposed of by this common order.
In the assessee has challenged the order of the Ld. CIT (E) in rejecting the application for registration u/s 12A of the Act while ITA No.2503/PUN/2024 relates to the order of the Ld. CIT(E) in denying the approval u/s 80G of the Act.
Facts of the case in in brief, are that the assessee filed an application in Form No.10AB on 02.05.2024 for registration of the trust under clause (iii) of section 12A(1)(ac) of the Act. With a view to verify the genuineness of the activities of the assessee and objects, a notice was issued through ITBA portal on 18.06.2024 requesting the assessee to upload certain information/ clarification. The assessee was asked to file compliance by 03.07.2024 which was extended till 1209.2024 at the request of the assessee. In response thereto, the assessee filed the requisite details. The Ld. CIT(E) while going through those details and documents filed along with the application, found certain discrepancies for which he issued another show cause notice on 24.09.2024 seeking compliance by 01.10.2024. The said discrepancies recorded by the Ld. CIT(E) in para 4 of the impugned order is reproduced below: “4. … “(i) A point wise reply has not been furnished by you. Kindly furnish the same.
(ii) You have not furnished activity note. Kindly furnish the note on activity giving details viz. dates and places of each activities carried out by your trust, details of beneficiaries how they were identified, etc.
(iii) You have not furnish any supporting credible evidences in respect of the activities. Kindly furnish the same. In absence of any such tangible material in respect of proof of activities being carried out it is not possible to arrive at any conclusion about the genuineness of activities and also to ascertain as to whether the activities are in line with the objects of the trust / institution.
(iv) Furnish financial statements for FY 2023-24 along with schedules/annexures.
(v) Furnish copies of bill/invoices of expenses done on activities as shown in your financial statement.”
3.1 The assessee furnished its reply to the above notice on 01.10.2024, however, the said reply was not found to be satisfactory by the Ld. CIT(E). Being not satisfied about the genuineness of the activities of the trust as well as compliance to the requirements of any other law for the time being in force, the Ld. CIT(E) rejected the application of the assessee for grant of registration u/s 12A of the Act and also cancelled the provisional registration granted earlier u/s 12AB of the Act by observing as under: “6. The assessee furnished its reply in response to the notice on 01/10/2024. In compliance, the assessee has furnished a note stating therein that the trust is engaged in activities like educational help, relief to poor and medical help. However, no specific details of the activities have been furnished. It has furnished some information titled as financial statements, details of beneficiaries, bills and invoices, computation of income. The financial statements of 2023-24 shows that expenses to the tune of Rs 11,06,556/- 1,05,881/- and 9,39,965/- were made on Medicines, Relief to poor and education respectively. However, no details of the same are furnished. The said expenses are also not supported with any supporting credible evidences such as bills and vouchers, photographs. In fact, the invoices submitted are that of THE TAY DEPAR transportation, printing stationary and food grains. In note on activity, trust has claimed of providing educational material to students and financial assistance to poor. It has also claimed of providing shelter, financial assistance. But, how this object is achieved, who were the beneficiaries and how they were identified etc has not been explained with supporting evidences. Regarding claim of medical help, assessee has claimed of providing Ayurvedic treatments. However, details of doctors who rendered services, bills of medicines etc has not been given. Donations to the tune of Rs 38,40,149/- were also received during the said year. However, the trust has not provided any details of the said donations received.
Considering the above facts discussed in the show notice and discrepancies noticed, the undersigned is not satisfied 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 05/03/2024 under section 12AB read with section 12A(1)(ac) (vi) (A)of the Income Tax Act, 1961 is hereby cancelled.”
Aggrieved with such order of the Ld. CIT(E), the assessee is in appeal before the Tribunal by raising the following grounds:
1. The Id CIT Exemption erred in law and on facts in rejection of application for registration u/s 12A(1)(ac) (iii) and cancelling provisional registration granted on 05.03.2024 u/s 12AB without considering the facts and circumstances of the case. 2. The appellant prays for opportunity so as to explain its case. 3. The appellant craves leave to add, alter, modify or substitute any ground of appeal at the time of hearing.
5. Admittedly, the facts of the case in are similar to that of ITA No.2504/PUN/2024 narrated above. Similar grounds have been raised in ITA No. 2503/PUN/2024 which read as under:
“1. The Id CIT Exemption erred in law and on facts in rejection of application for Approval u/s 80G(5) and cancelling provisional approval granted on 23.12.2023 without considering the facts and circumstances of the case. 2. The appellant prays for opportunity so as to explain its case. 3. The appellant craves leave to add, alter, modify or substitute any ground of appeal at the time of hearing.”
6. It is the submission of the Ld. AR that since the Ld. CIT(E) has rejected the grant of registration u/s 12A of the Act and cancelled the provisional registration granted earlier, he refused to grant approval u/s 80G of the Act.
7. The Ld AR submitted that full details could not be furnished in response to the discrepancies pointed out by the Ld. CIT(E). The Ld. AR submitted that given an opportunity the assessee is now in a position to file all the details/ documents as desired by the Ld. CIT(E). She therefore prayed for one more opportunity to be granted to the assessee to present and substantiate its case before the Ld. CIT(E) by filing the requisite details/ documents.
The Ld. DR, on the other hand, supported the order of the Ld CIT(E).
We have heard Ld. Representatives of the parties, perused the material available on record. It is an admitted fact that the assessee filed some response to the notice(s) issued by the Ld. CIT(E), however, the same were not to the satisfaction of the Ld. CIT(E). He, therefore rejected the application of the assessee u/s 12A for the reason recorded in para 6 of his impugned order (reproduced in the preceding paragraph). The assessee’s application for grant of approval u/s 80G has also been rejected by the Ld. CIT(E) on the similar grounds. Further, since the application for grant of registration u/s 12A of the Act was rejected and the provisional registration granted earlier was cancelled, he also rejected the application for grant of approval u/s 80G of the Act.
Considering the totality of the facts and in the circumstances of the case enumerated above and in the interest of justice, we deem it proper, to set aside the impugned order(s) of the Ld. CIT(E) and restore the issue(s) to his file with a direction to grant one final opportunity to the assessee to explain and substantiate its case to his satisfaction by filing the requisite details as may be required/ called upon and decide both the applications of the assessee under section 12A and 80G of the Act afresh as per fact and law. The assessee is also hereby directed to remain vigilant and make his submissions on the appointed date without seeking any adjournment the Ld. CIT(E) shall be at liberty to pass appropriate order(s) as per law. We hold and direct accordingly. The grounds raised by the assessee in both the appeals are accordingly allowed for statistical purposes.
In the result, both the appeals in & 2503/PUN/2024 filed by the assessee are allowed for statistical purposes.