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Facts
The assessee-trust filed an application for registration under Section 12A(1)(ac)(vi)-ITEM(B) of the Income Tax Act, 1961. The CIT(E) rejected the application, citing the assessee's failure to furnish required details despite multiple opportunities. The CIT(E) also noted that the trust had claimed deduction under Section 11, making the application for Section 12A(1)(ac)(vi)(B) not applicable.
Held
The Tribunal restored the issue to the file of the CIT(E) with a direction to grant one final opportunity to the assessee to substantiate its case. The assessee is directed to submit the required details without seeking any adjournment.
Key Issues
Whether the CIT(E) was justified in rejecting the registration application without affording proper opportunity, and if the grounds for rejection were hyper-technical.
Sections Cited
12A, 12AB, 12A(1)(ac)(vi)-ITEM(B), 11, 12A(1)(ac), 12AB(1)(b)(i)
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
This appeal filed by the assessee is directed against the order dated 10.09.2024 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.
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 23.05.2024 requesting the assessee to upload certain information / clarification. 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) noticed certain discrepancies for which the Ld. CIT(E) issued another notice to the assessee. However, the assessee failed to furnish the details for which the Ld. CIT(E) rejected the application for grant of registration u/s 12A 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. 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.
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.
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.
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.
Without prejudice to the above, 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.
In view of the above, the application filed by the assessee under section 12A(1)(ac) (vi)-ITEM(B) of the Income Tax Act, 1961 is hereby rejected.”
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.
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) without affording proper opportunity to the assessee. He submitted that the compliance could not be made on the due date of 27.08.2024 due to misplacement
The Ld. DR on the other hand strongly objected to the arguments advanced by the Ld. Counsel for the assessee.
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 on the basis of various details furnished by the assessee, the Ld. CIT(E) noticed certain discrepancies for which he issued another notice to the assessee calling for certain clarifications. However, the assessee failed to respond to the same for which the Ld. CIT(E) rejected the application for grant of registration u/s 12A of the Act. 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 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 CIT(E) on the appointed date without seeking any adjournment under any pretext, failing which the 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.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 13th May, 2025.