COSMOS FOUNDATION ,PUNE vs. CIT EXEMPTION , PUNE

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ITA 2570/PUN/2024Status: DisposedITAT Pune19 May 2025Bench: SHRI R. K. PANDA (Vice President), MS. ASTHA CHANDRA (Judicial Member)1 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the rejection of the application solely on the ground of a wrong section code used inadvertently was a hyper-technical ground. The Tribunal restored the issue to the CIT(E) to provide one final opportunity to the assessee to substantiate its case.

What were the facts?

The assessee filed an application for registration under section 12A of the Income Tax Act. The CIT(E) rejected the application, citing a wrong section code used in Form 10AB and the assessee's failure to respond to notices seeking clarification.

What were the issues?

Whether the rejection of a registration application under Section 12A solely on the basis of a mistakenly used section code is justified, or if the assessee should be granted an opportunity to rectify the error.

Which sections of the Income-tax Act were involved?

Section 12A,Section 12A(1)(ac)(vi)-ITEM(B),Section 12A(1)(ac)(ii)(B),Section 12A(1)(ac)(iv)(B),Section 12AB,Section 11

AI-generated summary — verify with the full judgment below

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

For Appellant: Shri Sharad A Vaze (virtual)
For Respondent: Shri Amol Khairnar CIT-DR

This appeal filed by the assessee is directed against the order dated 18.09.2024 of the Ld. Commissioner of Income Tax (Exemption), Pune [“CIT(E)”], rejecting the application for grant of registration u/s 12A of the Income Tax Act, 1961 (the “Act”).

2.

Facts of the case, in brief, are that the assessee filed an application in Form No.10AB on 29.03.2024 for registration of the trust under section 12A(1)(ac)(vi)-ITEM(B) 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 24.05.2024 requesting the assessee to upload certain information / clarification which was duly served through e-portal / email. The assessee was requested to submit the compliance by 10.06.2024. On verification of the details submitted by the assessee in response to the said notice and the documents submitted along with the application, the Ld. CIT(E) noted certain discrepancies for which he issued another notice dated 02.09.2024 to clarify those issues. The assessee was requested to show cause as to why the application for grant of registration u/s 12A should not be rejected and why the registration granted earlier u/s 12AB should not be cancelled in the event to file compliance by 09.09.2024. In the absence of any reply from the side of the assessee, the Ld. CIT(E) rejected the application filed by the assessee for grant of registration u/s 12A(1)(ac)(vi)-ITEM(B) of the Act by observing as under: “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.

7. Further, without prejudice to the above and as per financial statements and ITRs furnished by the assessee, it is seen that the trust has claimed deduction u/s 11. Therefore, said provisions of sec. 12A(1)(ac)(vi)(B) of the Act are not applicable in the assessee's case. Thus, said provisions of sec. 12A(1)(ac) (vi) (B) of the Act are not applicable in the assessee's case. As such, the undersigned is left with no alternative but to reject the application.”

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 basis of facts and in the circumstances of the case and as per law, the Commissioner of Income Tax, (Exemptions) Pune, is not justified in rejecting the regular registration even after the submission of information called from the assessee-trust. The rejection is only on the hyper-technical ground of wrong section code inadvertently / mistakenly used by the assessee in Form 10AB. The Commissioner of Income Tax (Exemptions) Pune be directed to consider Form 10AB filed on 27.03.2024 as having been filed under Clause (iii) of sec 12A(1)(ac), by condoning the delay / limitation, if any.

2. The appellant craves leave to add, alter, omit or substitute any of the grounds at the time of hearing of the appeal.

4.

The Ld. Counsel for the assessee at the outset submitted that the application filed for grant of registration u/s 12A of the Act was rejected by the Ld. CIT(E) on the ground that the assessee has used wrong section code in Form 10AB inadvertently / mistakenly. He submitted that in the interest of justice, the assessee should be given an opportunity 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(E).

4.1 The Ld. AR relied on the decision of the Pune Bench of the Tribunal in the case of Datar Kulmandal Vs. CIT (ITA No. 1052/PUN/2024) dated 27.02.2025 and in the case of UV Patel Foundation vs. CIT (ITA No. 1956/PUN/2024), dated 02.12.2024 in support thereof. He further submitted that the mistake in wrong selection code in e-filing of Form 10AB is not fatal denying the registration of a charitable trust and placed reliance on the decision of Delhi Tribunal in the case of Raj Krishna Jain Charitable Trust (ITA no. 1553/Del/2024) and in the case of Shree Swaminarayan Gadi Trust (2024) 162 taxmann.com 772 (Surat).

5.

The Ld. DR, on the other hand, supported the order of the Ld. CIT(E).

6.

We have heard the Ld. Representatives of the parties, perused the order of the Ld. CIT(E), the paper book filed on behalf of the assessee and various judicial precedents relied upon by the Ld. AR. It is an admitted fact that due to non-compliance to the notice issued by the Ld. CIT(E) inter-alia asking for certain details such as bills/vouchers/invoices/photographs for claiming expenses in respect of charitable activities carried out by the trust etc., he rejected the application for grant of registration and also cancelled the provisional registration granted earlier u/s 12AB. The assessee trust was earlier registered u/s 12A w.e.f. 05.01.2017. The assessee sought re- registration under new scheme and was also granted provisional registration on 01.07.2017. Thereafter the assessee applied for regular registration by filing Form 10AB on 29.03.2024. A show cause notice was issued by the Ld. CIT(E) indicating wrong selection of code by the assessee while e-filing Form 10AB which is also the reason for which the Ld. CIT(E) rejected the registration application of the assessee. 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 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.

7.

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

Order pronounced in the open Court on 19th May, 2025.

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