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Income Tax Appellate Tribunal, “A” BENCH, PUNE
Before: SHRI R.K. PANDA & MS. ASTHA CHANDRA
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 ITA No.2654/PUN/2024, 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.2653/PUN/2024 relates to the order of the CIT(E) in denying the approval u/s 80G of the Act.
Facts of the case in ITA No.2654/PUN/2024, in brief, are that the assessee filed an application in Form No.10AB on 29.06.2024 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 trust and compliance to requirements of any other law for the time being in force by the trust/ institution as are material for the purpose of achieving its objects, a notice was issued through ITBA portal on 05.08.2024 requesting the assessee to upload certain information/ clarification. The assessee was asked to file compliance by 20.08.2024. However, the assessee failed to respond and then another notice was issued and served upon the assessee on 04.10.2024 specifically requesting the assessee to show cause as to why the application should not be rejected and why the provisional registration granted earlier under section 12AB should not be cancelled in the event the assessee fails to comply to the said notice by due date of 11.10.2024. The assessee once again failed to file its response to the said show cause notice and therefore in absence of any details furnished from the side of the assessee trust, the Ld. CIT(E) rejected the application filed by 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:
“5. The information / details were called for under the provisions of section 12AB(1)(b)(i) of the Income Tax Act, 1961. These are the basic details required to ascertain the overall nature of the activities of the assessee and are directly relevant to the present proceedings. However, the assessee has failed to comply despite giving sufficient opportunities as discussed above including an opportunity of being heard.
Thus, the assessee has failed to furnish the details called for under the provisions of section 12AB(1)(b)(i) of the Income Tax Act, 1961 to verify the genuineness of activities of the trust / institution and to verify the compliance to requirements of any other law for the time being in force by the trust / institution as are material for the purpose of achieving its objects.
In absence of the compliance to the above requirement, it is not possible to arrive at any conclusion about the genuineness of activities of the assessee and the compliance to the requirements of any other law for the time being in force by the trust / institution as are material for the purpose of achieving its objects.
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 section 12AB(1)(b)(i) of the Income Tax Act, 1961. Hence, the undersigned is unable to draw any satisfactory conclusion about genuineness of activities of the assessee and the compliance to the requirements of any other law for the time being in force by the trust / institution as are material for the purpose of achieving its objects. Therefore, the undersigned has left no alternative but to reject the application.
In view of the above, the application filed by the assessee is hereby rejected and the provisional registration granted on 28/05/2021 under section 12AB read with section 12A(1)(ac) (vi) 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:
"
On the facts and circumstances of the case and in law, the Hon'ble Commissioner of Income Tax Exemption has erred in rejecting the Application fled u/s 12A(1)(ac)(iii of the Income Tax Act, without granting adequate opportunity of being heard. Appellant be granted opportunity to represent its case effectively.
On the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax Exemption has erred in cancelling the Provisional registration granted u/s 12AB r.w.s.12A(1)(a)(ac)(vi).
On the facts and circumstances of the case and in law, the Hon'ble Commissioner of Income Tax Exemption has erred in not granting registration u/s 12A(1)(ac)(iii) of the Income Tax Act to the Appellant.
The Appellant craves the permission to add, amend, modify, revise, substitute, delete or alter any/all of the above grounds of appeal if deemed necessary at the time of hearing of the appeal.”
Admittedly, the facts of the case in ITA No.2653/PUN/2024 are similar to that of ITA No.2654/PUN/2024 narrated above. Similar grounds have been raised in ITA No.2653/PUN/2024 which read as under:
"
On the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax Exemption has erred in rejecting the Application filed under Clause (ii) of first proviso to sub-section (5) of section 80G of the Income Tax Act, without granting adequate opportunity of being heard. The Appellant be granted opportunity to represent its case effectively.
On the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax Exemptions erred in cancelling the provisional registration granted under clause (iv) of first proviso to subsection (5) of section 80G.
On the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax Exemption has erred in not giving registration Under Clause (iii) of first proviso to sub-section (5) of section 80G of the Income Tax Act to the Appellant.
The Appellant craves the permission to add, amend, modify, revise, substitute, delete or alter any/all of the above grounds of appeal if deemed necessary at the time of hearing of the appeal.”
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.
The Ld. AR submitted that non-compliance to the notice(s) issued by the Ld. CIT(E) was not intentional. He submitted that the assessee is an educational institution and the concerned person who was entrusted with the responsibility of the tax matters of the assessee trust was engaged in the closing work due to which the show cause notice remained un- complied with. So far as the initial notice is concerned, he submitted that the assessee tried to file its response after receiving the initial notice on 05.08.2024 but the e-submission window was already closed by the Ld. Assessing Officer. He accordingly submitted that in the interest of justice, the assessee should be given an opportunity to substantiate its case by filing the requisite details before the Ld. CIT(E).
The Ld. DR, on the other hand, supported the order of the Ld. CIT(E) and submitted that the assessee was given sufficient opportunity by the Ld. CIT(E) to file its response but the assessee failed to do so. Therefore, the Ld. CIT(E) has correctly rejected the application(s) of the assessee.
We have heard the Ld. Representatives of the parties and perused the material available on record. It is an admitted fact that the assessee failed to respond to the initial notice as well as the subsequent show cause notice issued by the CIT(E). We find some force in the arguments of the Ld. AR that non-compliance to the notice(s) was not intentional and has resulted due to circumstances beyond the control of the assessee. The fact on record reveals that the assessee made an attempt to file its response to the first notice, however, the e-filing window on ITBA portal was not accessible to the assessee. We find that this fact was duly brought to the notice of the Ld. CIT(E) vide assessee's letter dated 30.09.2024 submitting therein the relevant extract of the ITBA portal evidencing the above claim of the assessee and making a request to enable the e-portal so that the assessee can file the requisite details. A copy of the said letter is also placed on record before us.
It is also observed that since the application for grant of registration u/s 12A of the Act was rejected and the provisional registration granted earlier was cancelled, the Ld. CIT(E) rejected the application for approval u/s 80G of the Act. 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 the requisite details before the Ld. CIT(E). Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the impugned issue(s) 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 and decide the issue(s) afresh as per fact and law. The assessee is also hereby directed to submit the details as called for by the Ld. CIT(E) on the appointed date without seeking any adjournment under any pretext, failing which 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 ITA No.2654/PUN/2024 and ITA No.2653/PUN/2024 filed by the assessee are allowed for statistical purposes. Order pronounced in the open court on 28th May, 2025. (R.K. Panda) VICE PRESIDENT (Astha Chandra) JUDICIAL MEMBER पुणे / Pune; दिनांक / Dated : 28th May, 2025. रवि आदेश की प्रतिलिपि अग्रेषित /