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Facts
The assessee filed an application in Form No. 10AB for approval under section 80G of the Income Tax Act. The CIT(E) rejected the application due to the assessee filing it under a wrong section/code and failing to provide required information and clarifications in response to notices.
Held
The Tribunal restored the issue to the CIT(E) for fresh adjudication, granting the assessee one final opportunity to submit the requisite details. The Tribunal noted that a co-ordinate bench had previously remanded a similar 12A application.
Key Issues
Whether the rejection of the 80G application by the CIT(E) was justified due to a technical error in filing and non-compliance, or if the assessee should be given another opportunity to present its case.
Sections Cited
80G, 11, 12A, 12AB(1)(b)(i), 17A(2)(k), 11AA(2)(h)
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 06.09.2024 of the Ld. Commissioner of Income Tax (Exemption), Pune [“CIT(E)”] whereby he rejected the application of the assessee filed before him on 29.03.2024 in Form No. 10AB under sub clause (B) of (iv) of first proviso to sub-section (5) of section 80G of the Income Tax Act, 1961 (the “Act”).
Facts of the case in brief, are that the assessee filed an application in Form No.10AB on 29.03.2024 for approval under sub clause (B) of (iv) of first proviso to sub-section (5) of section 80G of the Act. With a view to verify the genuineness of the activities of the assessee and fulfillment of conditions laid down in clause (i) to (v) of section 80G(5) of the Act, a notice was issued through ITBA portal on 24.05.2024 requesting the assessee to upload certain information/clarification. The assessee was requested to submit the compliance by 10.06.2024. The notice was duly served on the assessee through e-portal/email. The assessee responded to the said notice on 10.06.2024 and requested for an adjournment which granted upto 12.07.2024. After verifying the details furnished by the assessee, the Ld. CIT(E) found certain discrepancies and asked for their clarification which were communicated to the assessee by issue of another notice on 22.08.2024 seeking compliance by 29.08.2024. It was specifically asked by the Ld. CIT(E) that your application is filed u/s 80G(5)(iv)(B) of the Act but the same is not applicable to your case and, therefore, your present application is liable to be rejected. The said discrepancies as listed out in para 4 of the Ld. CIT(E)’s order are as under : "(i) As per financial statements furnished by you, you, it is seen that the trust has claimed deduction u/s 11. Therefore, said provisions of sec. 12A(1)(ac)(vi)(B) / 80G(5) (iv) (B) of the Act are not applicable to your case. As such, your present application is liable to be rejected. Please clarify with supporting documents. (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) 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. (iv) Kindly furnish evidences claiming expenses on charitable activities such as bills/vouchers/invoices alongwith photographs of activities carried out by your trust. (v) You have not submitted ledger account of donation receipts. 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. vide initial notice. You have not furnished the details as required in above format. Please furnish the same."
2.1 In view of the above, the assessee was requested to show cause as to why the application should not be rejected and why the approval granted u/s 80G(5) of the Act should not be cancelled in the event of failure to comply by the due date of 29.08.2024. However, the assessee neither submitted explanation to the show cause notice nor availed the opportunity of being heard. 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. Due to the non-compliance of the notice, the Ld. CIT(E) found himself unable to arrive at any satisfactory conclusion about the genuineness of activities of the assessee and concluded that the assessee appears to be not having any supporting documents/evidence to submit. He therefore rejected the application of the assessee vide his impugned order dated 06.09.2024 for the reason of wrong selection of code while e-filing Form 10AB and non-submission of the other details in response to the second notice.
Aggrieved with such order of Ld. CIT(E), the assessee is in appeal before the Tribunal by raising the following grounds: “
1. On the basis of facts and in the circumstances of the case and as per law, the Commissioner of Income Tax, (Exemptions) Pune, is not justified in rejecting the regular registration even after the submission of information called from the assessee-trust The rejection is only on the hyper-technical ground of wrong section code inadvertently/mistakenly used by the assessee in Form 10AB. The Commissioner of Income Tax (Exemptions) Pune be directed to consider Form 10AB filed on 27.03.2024 as having been filed under Clause (iii) of sec 12A(1)(ac), by condoning the delay / limitation, if any.
2. The appellant craves leave to add, alter, omit or substitute any of the grounds at the time of hearing of the appeal.”
The Ld. Counsel for the assessee submitted that due to non compliance to the show cause notice issued by the Ld. CIT(E) and also since the assessee is not regularly registered u/s 12A(1)(ac)(i)/(iii) of the Act, he rejected the application for approval u/s 80G of the Act. He submitted that the assessee failed to make compliance before the Ld. CIT(E) as the assessee was not aware about such notice, which was issued online so skipped the assessee’s attention and that given an opportunity, the assessee is in a position to substantiate its case by filing the requisite details before the Ld. CIT(E). He accordingly submitted that in the interest of justice, the impugned issue may be set aside to the Ld. CIT(E) for fresh adjudication after affording an opportunity of being heard to the assessee. He also brought to our attention that the assessee’s appeal challenging the rejection of section 12A application for grant of regular registration was heard by the Co-ordinate Bench of this Tribunal on 11.03.2025 and the order is awaited. He therefore submitted that the present appeal being consequential and having the identical set of facts may be decided accordingly.
The Ld. DR, on the other hand, heavily relied on the order of Ld. CIT(E) and submitted that the Ld. CIT(E) was completely justified in rejecting the assessee’s application as the assessee filed the application under wrong section/code and was given sufficient opportunity to comply to the notice but he failed to do so.
We have heard the rival arguments made by both the sides and perused the order of the Ld. CIT(E) as well as paper book containing written submission filed by the Ld. AR on behalf of the assessee. The Ld. CIT(E) rejected the application for grant of approval u/s 80G of the Act as the assessee failed to respond to show cause notice for the reason stated above by the Ld. AR and the application being filed under the wrong section/code. Admittedly, the assessee filed the application under wrong section/code and there was non-compliance to the show cause notice issued by the Ld. CIT(E). It is the submission of the Ld. Counsel for the assessee that non-compliance before the Ld. CIT(E) was not intentional and given an opportunity, the assessee is in a position to present and substantiate its case by filing the requisite details before the Ld. CIT(E) to his satisfaction. We find that the Co-ordinate Bench of this Tribunal vide order dated 23.05.2025 in in assessee’s appeal against the order of the Ld. CIT(E) wherein he rejected the assessee’s application for regular registration under section 12A of the Act, has set aside the order of the Ld. CIT(E) and remanded the matter back to his file with a direction to decide the application for registration u/s 12A afresh by treating the application of the assessee as filed under the correct/desired section. We, therefore, deem it fit and proper and in the interest of justice, to restore the impugned issue in the present appeal being consequential and having similar set of facts to the file of the Ld. CIT(E) with a direction to grant one final opportunity to the assessee to substantiate its case by filing the requisite details to his satisfaction and decide the issue afresh as per fact and law. The assessee is also hereby directed to remain vigilant in receiving and accessing the notice(s) of hearing and submit the details as called for by the Ld. CIT(E) on the appointed date without seeking any adjournment under any pretext unless required for the sufficient cause, failing which the Ld. CIT(E) shall be at liberty to pass appropriate order as per law. We hold and direct accordingly. The ground raised by the assessee is accordingly allowed for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 28th May, 2025.