SHRI. NAGNATH MANDIR (MAHARAJ) AUNDHA,HINGOLI vs. COMMISSIONER OF INCOME TAX (EXEMPTIONS), PUNE

Facts of the case, in brief, are that the assessee filed an application in Form No.10AB on 30.06.2024 for registration of the trust under clause (iii) of first proviso to section 10(23C) 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 14.08.2024

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 or 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 sub-clause (a) of clause (ii) of second proviso to section 10(23C) of the Income Tax Act, 1961 and hence, the undersigned is unable to draw any satisfactory conclusion about the genuineness of activities of the assessee and 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 05/11/2021 under section 10(23C) of the Income Tax Act, 1961 is hereby cancelled.”

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

The Ld. Counsel for the assessee at the outset submitted that the application filed for grant of registration u/s 10(23C) of the Act was rejected by the Ld. CIT(Exemption) without affording proper opportunity of hearing to the assessee. Giving the background about the assessee and how its operations are conducted, the Ld. AR submitted that the non-compliance before the Ld. CIT(Exemption) was not deliberate but emanated from the genuine causes beyond the control of the assessee. He submitted that the compliance could not be made on the due date(s) on account of non appointment of members/trustees on the Board of Trustees by the Charity Commissioner to look after the daily affairs of the assessee trust and the Ex-officio President was busy in preparations and conduct of elections. He submitted that given an opportunity the assessee is in a position to substantiate its case by filing all the relevant details for deciding the issue afresh. He accordingly submitted that the matter may be restored to the file of the Ld. CIT(Exemption).

We have heard the Ld. Representatives of the parties and perused the material available on record. It is an admitted fact that due to non-compliance to the notice(s) issued by the Ld. CIT(Exemption) asking for certain details, he rejected the application for grant of registration and also cancelled the registration granted earlier u/s 10(23C). We find force in the argument advanced by the Ld. AR that such non-compliance was not intentional but occurred due to genuine difficulties faced by the assessee trust. It is the submission of the Ld. Counsel for the assessee before us that given an opportunity the assessee is in a position to substantiate its case by filing all the relevant details before the Ld. CIT(Exemption). 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(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 as per fact and law. The assessee is also hereby directed to submit the details as called for by the Ld. CIT(Exemption) on the appointed date without seeking any adjournment under any pretext, failing which the Ld. CIT(Exemption) is at liberty to pass appropriate order as per law. The grounds raised by the assessee are accordingly allowed for statistical purposes.

अपीलार्थी / The Appellant; 2. प्रत्यर्थी / The Respondent

4. The concerned Pr.CIT, Pune DR, ITAT, ‘A’ Bench, Pune 5. गार्ड फाईल / Guard file.