KALI BARI SAMITI,PUNE vs. C.I.T (EXEMPTION), PUNE, PUNE

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ITA 245/PUN/2025Status: DisposedITAT Pune21 May 2025Bench: SHRI R. K. PANDA (Vice President), MS. ASTHA CHANDRA (Judicial Member)15 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal noted the assessee's non-compliance despite multiple opportunities. Considering the totality of facts and in the interest of justice, the Tribunal restored the issue to the CIT(E) to grant one final opportunity to the assessee to submit details, after which the CIT(E) should decide the matter.

What were the facts?

The assessee filed an application for registration under Section 12A of the Income Tax Act. The CIT(E) issued multiple notices seeking information and compliance, which the assessee failed to provide. Consequently, the CIT(E) rejected the application and cancelled the provisional registration granted under Section 12AB.

What were the issues?

Whether the CIT(E) was justified in rejecting the application and cancelling registration due to non-compliance, and if a final opportunity should be granted to the assessee.

Which sections of the Income-tax Act were involved?

Section 12A,Section 12AB,Section 12A(1)(ac)(iii),Section 12A(1)(ac)(vi),Section 12AB(1)(b)(i)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE

For Appellant: Shri Sarang S Gudhate
For Respondent: Shri Amol Khairnar CIT-DR

This appeal filed by the assessee is directed against the order dated 06.11.2024 of the Ld. CIT(Exemption), Pune rejecting the application for grant of registration u/s 12A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) and cancelling the provisional registration granted earlier u/s 12AB of the Act.

2.

Facts of the case, 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 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 10.08.2024 requesting the assessee to upload certain information / clarification. The assessee was also requested to submit the compliance by 27.08.2024. Since the assessee did not comply to the said notice, another opportunity was granted by the Ld. CIT(E) vide notice dated 17.10.2024 asking the assessee to explain as to why the application for registration u/s 12A should not be rejected and why the provisional registration granted earlier u/s 12AB should not be cancelled. Despite this notice there was no compliance from the side of the assessee for which the Ld. CIT(E) granted one more opportunity to the assessee. However, due to consistent non-compliance to the statutory notices, the Ld. CIT(E) rejected the application for grant of registration u/s 12A of the Act and also cancelled the provisional registration granted earlier u/s 12AB by observing as under: “4. The assessee was requested to submit compliance by 27/08/2024. The notice was duly served on the assessee through e-portal and email. Since the assessee did not furnish compliance to the said notice, another opportunity was given to the assessee vide notice dated 17/10/2024 requesting it 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 specifically informed that in the event of failure to comply to the said notice, its application shall be liable to be rejected and the registration /approval shall also be liable to be cancelled. The assessee was also given opportunity of being heard vide the said notice. However, the assessee neither submitted the above mentioned compliance nor availed the opportunity of being heard. The assessee was requested to submit compliance by 22/10/2024. The assessee was also given opportunity of being heard vide the said notice. The notice was duly served on the assessee through e-portal and email. However, the assessee neither furnished its compliance to the show cause notice nor availed the opportunity of being heard.

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.

6.

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.

7.

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.

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 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.

9.

In view of the above, the application filed by the assessee is hereby rejected and the provisional registration granted on 07/04/2022 under section 12AB read with section 12A(1)(ac) (vi) of the Income Tax Act, 1961 is hereby cancelled.”

3.

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

1. On the facts and circumstances of the case and in law, the Hon'ble Commissioner of Income Tax Exemption has erred in cancelling the Provisional registration granted u/s 12AB r.w.s. 12A(1)(ac)(vi).

2. 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 filed u/s 12A(1)(ac)(iii) of the Income Tax Act, without granting proper opportunity of being heard. The Appellant be granted just and proper relief in this respect.

3. On the facts and circumstances of the case and in law, the Hon'ble Commissioner of Income Tax Exemption has erred in not giving registration u/s 12A(1)(ac)(iii) of the Income Tax Act to the Appellant.

4. 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.

4. We have heard the rival arguments made by both the sides, perused the order of the Ld. CIT(E) and the paper book filed on behalf of the assessee. It is an admitted fact that due to non-compliance to the notices issued by the Ld. CIT(E), he rejected the application for grant of registration u/s 12A and cancelled the provisional registration granted earlier u/s 12AB, the reasons of which have already been reproduced in the preceding paragraphs. It is the submission of the Ld. Counsel for the assessee that since the trustees were out of Pune for a long time, they could not comply to the notices issued by Ld. CIT(E). It is also his submission that given an opportunity the assessee is in a position to substantiate its case by filing all the relevant 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 issue 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 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) is 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.

5.

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

Order pronounced in the open Court on 21st May, 2025.

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