Loading judgment…
Facts
The assessee filed applications for registration u/s 12A and approval u/s 80G of the Income Tax Act. The CIT(Exemption) rejected the application for registration u/s 12A and cancelled the provisional registration due to non-compliance and lack of response from the assessee. Consequently, the approval u/s 80G was also denied.
Held
The Tribunal condoned the delay in filing the appeals and noted that the assessee did not respond to the second notice from the CIT(Exemption). However, considering the interest of justice and the assessee's request for an opportunity, the matters were restored to the file of the CIT(Exemption) for a final opportunity.
Key Issues
Whether the CIT(Exemption) erred in rejecting the applications without considering the adjournment requests and by acting in undue haste, thereby denying natural justice?
Sections Cited
12A, 80G, 12AB, 12A(1)(ac), 12AB(1)(b)(i), 17A(2), 80G
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE
Before: SHRI R. K. PANDA & MS. ASTHA CHANDRA
The above two appeals filed by the assessee are directed against the separate orders both dated 22.10.2024 of the Ld. CIT(Exemption), Pune rejecting the application(s) for grant of registration u/s 12A and approval u/s 80G of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). For the sake of convenience, both these appeals were heard together and are being disposed of by this common order.
There is a delay of 13 days in filing of both the appeals before the Tribunal. The assessee has moved separate condonation applications for condonation of delay. Sworn affidavits have been filed along with the applications stating therein the reasons for the said delay. After hearing both the sides and considering the contents of the condonation applications filed along with the affidavits, we are of the view that the delay is attributable to the sufficient cause. We, therefore, condone the delay and proceed to decide the appeal. the assessee has challenged the order of the CIT(Exemption) in rejecting the application for registration u/s 12A of the Act while relates to the order of the CIT(Exemption) in denying the approval u/s 80G of the Act.
, in brief, are that the assessee filed an application in Form No.10AB on 24.05.2024 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 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 26.06.2024 requesting the assessee to upload certain information / clarification. In response to the same, the assessee filed certain details. The Ld. CIT(Exemption) while going through those details found certain discrepancies in the submissions filed by the assessee for which he issued another notice to clarify on those issues. However, in absence of any response from the side of the assessee trust, the Ld. CIT(Exemption) 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 assessee was requested to show cause as to why the application should not be rejected and why the registration granted under section 12AB of the Income Tax Act, 1961 should not be cancelled. The assessee was also given opportunity of being heard vide the said notice. The assessee was specifically informed that in the event of failure to comply by the due date, the application shall be liable to be rejected and the registration shall also be liable to be cancelled. The compliance to the said notice was due on 16/10/2024. The notice was duly served on the assessee through e-portal and email. However, the assessee neither submitted explanation to the show cause notice till date nor availed the opportunity of being heard.
6. Since, the assessee has not furnished any explanation to the discrepancies communicated to it, it is presumed that the assessee has nothing to say in the matter.
Considering the above facts discussed in the show notice and discrepancies noticed and also that the assessee has not complied with the provisions of section 12AB(1)(b)(i) of the Income Tax Act, 1961 as well as the provisions of Rule 17A(2) of Income Tax Rules, 1962 in spite giving sufficient opportunities, the undersigned is unable to draw any satisfactory conclusion 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 10/03/2022 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(Exemption), the assessee is in appeal before the Tribunal by raising the following grounds:
1. The O/o the learned Respondent has acted in avoidable undue haste in rejecting the application of the Appellant. Although the limitation period was to end on 31.12.2024, learned Respondent has disposed the application on 22.10.2024.
2. The O/o the learned Respondent has failed to consider the application for adjournment of the Appellant dated 15.10.2024.
3. The O/o the learned Respondent has erred in law & denied the natural justice by conniving at the adjournment application without its disposal & blocking the portal so that the Appellant could not furnish the relevant records on 18.10.2024.
4. The appellant craves to raise any additional ground based on the merits of the case & within the corners of the law at the time of hearing.
Admittedly, the facts of the case in are similar to that of narrated above. It is the submission of the Ld. AR that since the Ld. CIT(Exemption) 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. Similar grounds have been raised in which read as under:
1. 1. The O/o the learned Respondent has cancelled the application under Clause (iii) of 1st Proviso to Section 80G of the Act on the basis of erroneous order dated 24.10.2024 cancelling the registration U/s 12(1)(ac) (vi) of the Act. Since the basis of rejection of application U/s 80G itself is under challenge before the Hon'ble Tribunal, the impugned order is unsustainable in the eyes of law.
2. The O/o the learned Respondent has acted in avoidable undue haste in rejecting the application of the Appellant. Although the limitation period was to end on 31.12.2024, learned Respondent has disposed the application on 22.10.2024.
3. The O/o the learned Respondent has failed to consider the application for adjournment of the Appellant dated 15.10.2024.
4. The O/o the learned Respondent has erred in law & denied the natural justice by conniving at the adjournment application without its disposal & blocking the portal so that the Appellant could not furnish the relevant records on 18.10.2024.
5. The appellant craves to raise any additional ground based on the merits of the case & within the corners of the law at the time of hearing of the matter.
The Ld. Counsel for the assessee submitted that the assessee in response to the first notice issued by the Ld. CIT(Exemption) has filed the various details. As regards the second notice seeking compliance by due date of 16.10.2024, the assessee filed an application for adjournment on 15.10.2024. Thereafter, on 18.10.2024, the assessee made an attempt to furnish its response but could not file its response because the submission portal was blocked by the O/o the Ld. CIT(Exemption). 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 strongly opposed the submissions made by the Ld. Counsel for the assessee.
We have heard the rival arguments made by both the sides, perused the order of the CIT(E) and the paper book filed on behalf of the assessee. It is an admitted fact that the assessee did not respond to the second notice issued by the CIT(Exemption) in which he has asked for certain details on account of certain discrepancies found from the submissions made by the assessee earlier for which he 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. Since the application for grant of registration u/s 12A of the Act was rejected and the provisional registration granted earlier was cancelled, he rejected the application for approval u/s 80G of the Act. The adjournment application filed by the assessee has not been considered by the Ld. CIT(Exemption). 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) to his satisfaction. Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue(s) 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(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(Exemption) is 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 and filed by the assessee are allowed for statistical purposes.
Order pronounced in the open Court on 22nd May, 2025.