LATE MAMASAHEB MOHOL VIDYA VIKAS MANDAL,PUNE vs. CIT EXEMPTION, PUNE

Facts of the case in brief, are that the assessee filed an application in Form No.10AB on 29.06.2024 for approval under clause (iii) 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 08.08.2024 requesting the assessee to upload certain information / clarification.

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 Income Tax Act, 1961 and hence, the undersigned is unable to draw any satisfactory conclusion about genuineness of activities of the assessee and fulfilment 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 (i)/(iii) 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 27/03/2024. 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 30/05/2022 under section 80G(5)(vi) read with clause (iv) of first proviso to section 80G(5) of the Act is hereby cancelled.”

Aggrieved with such order of Ld. CIT(E), the assessee is in appeal before the Tribunal by raising the following grounds:

The Ld. Counsel for the assessee at the outset submitted that due to non compliance to the notice(s) issued by the Ld. CIT(E) and also since the assessee is not regularly registered u/s 12A of the Act, he rejected the application for approval u/s 80G of the Act and also cancelled the provisional approval granted earlier. He submitted that the co-ordinate bench of the Tribunal in assessee’s appeal challenging the rejection of section 12A application of the assessee for grant of regular registration, has set aside the issue to the file of the Ld. CIT(A) and therefore urged that this present appeal being consequential may also be set aside to the file of the Ld. CIT(E). He submitted that the assessee failed to make compliance before the Ld. CIT(A) on account of certain unavoidable circumstances 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.

The Ld. DR, on the other hand, heavily relied on the order of Ld. CIT(E) and submitted that the Ld. CIT(E) afforded adequate opportunities to the assessee but the assessee still chose not to comply with the notices issues by the Ld. CIT(E) and therefore he was completely justified in rejecting the assessee’s application.

We have heard the rival arguments made by both the sides and perused the order of the Ld. CIT(E). It is an admitted fact that despite sufficient opportunities granted by the Ld. CIT(E), the assessee did not respond to the notice(s) for which he rejected the application for grant of approval u/s 80G of the Act. It is the submission of the Ld. Counsel for the assessee that non-compliance before the Ld. CIT(E) was not intentional but was on account of certain circumstances beyond the control of the assessee. It is also his submission that 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 have perused the order of the coordinate bench of this Tribunal in assessee’s case in dated 03.03.2025 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. Since the Tribunal in the said appeal 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 under section 12A(1)(ac)(iii) afresh, we deem it fit and proper, in the interest of justice, to restore the impugned issue in the present appeal being consequential, to the file of the Ld. CIT(Exemption) 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 and submit the details as called for by the Ld. CIT(E) on the appointed date without seeking any adjournment under any pretext unless 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 grounds raised by the assessee are accordingly allowed for statistical purposes.

In the result, the appeal filed by the assessee is allowed for statistical purposes.