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Facts
The assessee's application for registration under Section 80G was rejected by the CIT(E) for non-compliance with notices. Despite opportunities, the assessee failed to furnish required documents and clarifications regarding its activities and compliance with the Act.
Held
The Tribunal restored the matter to the file of the CIT(E) for fresh adjudication, granting one final opportunity to the assessee to present its case. The assessee was directed to be vigilant and comply with future notices without adjournment.
Key Issues
Whether the rejection of the 80G registration application solely on grounds of non-compliance, without considering the merits after granting a final opportunity, is justified.
Sections Cited
80G, 10(23AA), 10(23C), 12AB, 12A(1)(ac)(iii)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “B” 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 18.10.2024 of the Ld. Commissioner of Income Tax (Exemption), Pune [“CIT(E)”] whereby he rejected the application of the assessee filed before him in Form No. 10AB under clause (iii) of first proviso to sub-section (5) of section 80G of the Income Tax Act, 1961 (the “Act”) on 29.06.2024.
The brief facts are that on receipt of the assessee’s application filed in Form No. 10AB under clause (iii) of first proviso to section 80G(5) of the Act along with annexures thereto, with a view to verify the genuineness of the activities of the assessee and fulfillment of the conditions laid down in clauses (i) to (v) of section 80G(5) of the Act, the Ld. CIT(E) issued notice on 08.08.2024 through ITBA portal requesting the assessee to upload certain information/clarification such as date of commencement of activity, date of expiry of provisional approval, details of any other law applicable for achievement of objectives and the proof of compliance of said law, proof of identity of main trustees/directors /trustees, year-wise list of donations received, note on activities carried out etc. The compliance was sought by 23.08.2024. Since, the assessee did not furnish compliance to the said notice, another opportunity was given to the assessee vide notice dated 03.10.2024 wherein the assessee was requested to show cause as to why its application should not be rejected and the approval granted u/s 80G(5) of the Act should not be cancelled, seeking compliance by 10.10.2024. The notice(s) were duly served on the assessee through e-portal and email. However, the said notice(s) remained un-complied with. In the absence of any reply furnished by the assessee, the Ld. CIT(E) passed the impugned order rejecting the assessee’s application for final registration u/s 80G and also cancelling the provisional approval granted earlier under clause (iv) of first proviso to section 80G(5) of the Act by observing as under : “8. 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 sub-clause (a) of clause (ii) of second proviso to section 80G(5) of the Income Tax Act, 1961 and hence, the undersigned is unable to draw any satisfactory conclusion about genuineness of activities of the assessee and fulfillment of conditions laid down in clauses (i) to (v) of Section 80G(5) of the Act and has left no alternative but to reject the application.
As per the condition vide clause (i) of section 80G(5) of the Income Tax Act, 1961, the approval is available only if the income of the institution or fund is not be liable to inclusion in its total income under the provisions of section 11 and 12 or clause (23AA) / clause (23C) of section 10 of the Income Tax Act, 1961. Exclusions for the said condition are detailed in clause (a), (b) and (c) of proviso to clause (i) of section 80G(5) of the Act. Therefore, the institution / fund is required to be regularly registered/approved either under section 12AB or 10(23AA) or 10(23C) of the Income Tax Act, 1961 or the institution / fund shall be a Regimental Fund or Non-Public Fund established by the armed forces of the Union for the welfare of the past and present members of such forces or their dependents.
In the instant case it is noticed that the assessee is neither regularly registered u/s 12AB read with section 12A(1)(ac) (i) /12A(1)(ac)(iii) nor having regular approval under section 10(23C) read with clause (1)/(ii) of first proviso to the said section and the case is not covered under the exclusions provided vide proviso to clause (i) of section 80G(5) of the Act. The assessee is not approved under section 10(23AA) of the Act. The assessee is also not a Regimental Fund or Non-Public Fund established by the armed forces of the Union for the welfare of the past and present members of such forces or their dependents. In fact, the application of the assessee in form No. 10AB for registration u/s 12AB filed under the provisions of section 12A(1)(ac)(iii) of the Act has been rejected vide order dated 20/08/2024. Therefore, the condition (i) of section 80G(5) of the Income Tax Act, 1961 is also not fulfilled in this case.
In view of the above, the application filed by the assessee is hereby rejected and the provisional approval dated 22/06/2022 under section 80G(5)(vi) read with clause (iv) of first proviso to section 80G(5) of the Act is hereby cancelled.”
Aggrieved, the assessee is in appeal before the Tribunal raising the following solitary ground of appeal :-
“1. On the facts and in the circumstances of the case and in law Ld. CIT Exemption has erred in not granting registration u/s 80G(5)(vi) r.w.c. (iv) of the Act, 1961 without appreciating the facts of the case. Your appellant prays for grant of such registration u/s 80G(5) (vi) r.w.c. (iv) of the IT Act. 1961. Your appellant prays for deletion of entire addition. Your appellant craves for to add, alter amend, modify, delete any or all grounds of appeal before or during the course of hearing in the interest of natural justice.”
The Ld. AR submitted that there was no intentional non-compliance before the Ld. CIT(E). Non-compliance to the notices occurred on account of certain unavoidable circumstances beyond the control of the assessee. 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. 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 one more opportunity of being heard to the assessee.
The Ld. DR though supported the order of the Ld. CIT(E), he did not have any serious objection to the above request of the Ld. AR.
We have heard the Ld. Representative of the parties and perused the records. The Ld. CIT(E) rejected the application of the assessee for the reasons reproduced in the preceding paragraph. Admittedly, there was non-compliance by the assessee before the Ld. CIT(E). The Ld. Counsel for the assessee has, however, pleaded before us that such non-compliance was not intentional but resulted due to certain unavoidable circumstances and therefore prayed for an opportunity to be granted to the assessee to present its case before the Ld. CIT(E). On the facts and in the circumstances of the assessee’s 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) with a direction to consider the assessee’s application for approval u/s 80G afresh as per fact and law after granting one final opportunity to the assessee to substantiate its case before him. The assessee is also directed to remain vigilant in respect of the notice(s) of hearing issued by Ld. CIT(E) and submit the details/ documents as may be required/called upon by the Ld. CIT(E) on the appointed date without seeking any adjournment under any pretext, failing which the Ld. CIT(E) is at liberty to pass appropriate order as per law. We hold and direct accordingly. The solitary ground raised by the assessee is accordingly allowed for statistical purposes.
In the result, appeal of the assessee is treated as allowed for statistical purposes.
Order pronounced in the open court on 30th June, 2025.