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Income Tax Appellate Tribunal, “B” BENCH, PUNE
Before: SHRI R.K. PANDA & MS. ASTHA CHANDRA
PER ASTHA CHANDRA, JM : Two appeals filed by the assessee are directed against the two separate order(s) both dated 13.12.2024 of the Ld. Commissioner of Income Tax (Exemption), Pune [“CIT(E)"] whereby he rejected the application of the assessee filed on 15.06.2024 before him in Form No. 10AB u/s 12A(1)(ac)(iii) and section 80G(5)(iii) of the Income Tax Act, 1961 (the "Act"). For the sake of convenience both the appeals were heard together and are being disposed of by this common order. The assessee has raised the following grounds of appeal :- *1. The CIT [Exemption) erred in law and facts by rejecting the application and cancelling provisional registration without affording adequate opportunity of being heard, violating principles of natural justice.
The CIT (Exemption) erred in ignoring the adjournment request dated 04/12/2024 and proceeding to reject the application summarily.
The CIT (Exemption) erred in holding the appellant non-compliant despite substantial compliance with notices and furnishing majority of documents.
The CIT (Exemption) erred in issuing a notice dated 28/11/2024 with an unreasonably short compliance line lie. 5 working days), rendering compliance impracticable.
Without prejudice, the CIT (Exemption) has erred in cancelling the provisional registration granted to the appellant which is bad in law.”
Briefly stated, the facts of the case are that on receipt of the assessee's application filed in Form No. 10AB u/s 12A(1)(ac)(iii) of the Act along with annexures thereto, 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, the Ld. CIT(E) issued notice on 15.07.2024 through ITBA portal which was duly served on the assessee requesting the assessee to upload certain information/clarification such as date of commencement of activity, date of expiry of provisional registration, details of any other law applicable for achievement of objectives and the proof of compliance of said law, proof of identity of main trustees / managing trustees / directors / trustees / secretary, list of donors, note on activities carried out in the last three years/inception etc. under the provisions of section 12AB of the Act. The compliance was sought by 30.07.2024. On verification of the details/documents filed by the assessee, the Ld. CIT(E) noticed various discrepancies which were communicated vide issue of another notice dated 28.11.2024 duly served upon the assessee via e- portal/email. The said discrepancies are reproduced below : "(i) It is seen from your submission that you have not furnished note on activity giving details viz. dates and places of each activities carried out by you, details of beneficiaries, how they were identified, etc. As per the provisions of Rule 17A(2)(k) / 11AA(2)(h) of the Income Tax Rules, 1962, the application in Form No.10AB shall be accompanied by note on activities giving details of activities actually carried out but you have failed to comply with those provisions. You ought to be submit the details of actual activities carried out in the last 3 years or since inception, whichever is later. Further, the supporting evidence of the activities in the form bills and photographs are also not submitted by you. In absence of any such tangible material in respect of details and proof of activities being carried out, it is not possible to ascertain as to whether the activities are charitable and in line with the objects of the trust/institution. (ii) You have not submitted details of donation in the requisite format. You were specifically requested to furnish year-wise list of all donations received (including corpus donations etc.) during the last 3 years / since inception, whichever is later viz. full name, complete Postal address & PAN of donor, date & mode of donation, amount, receipt No. issued by trust / institute and copies of donation receipts and directions from the donors, if any. Please furnish the same. (iii) Kindly furnish evidences claiming expenses on charitable activities such as bills/vouchers/invoices alongwith photographs of charitable activities actually carried out by your trust. (iv) It is seen from the financial statement that no credible evidence is furnished in support of the activities claimed to have been carried out and considering the fact that a very meager / no expenditure is shown on charitable objects as compared to expenditure on administration /establishment, the satisfaction about the genuineness of activities could not be arrived at. Kindly furnish your explanation with credible evidences.”
1 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 Act should not be cancelled in the event of failure to comply by the due date i.e. 05.12.2024. However, the assessee neither submitted explanation to the show cause notice nor availed the opportunity of being heard. Since, the assessee did not furnish any explanation to the discrepancies communicated to it, the Ld. CIT(E) presumed that the assessee has nothing to say in the matter. Having unable to draw any satisfactory conclusion about the genuineness of the activities of the assessee trust, the Ld. CIT(E) proceeded to pass the impugned order rejecting the application of the assessee and also cancelling the provisional registration granted to the assessee on 24.09.2021 by observing as under :
“4. 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.
Dissatisfied, the assessee is in appeal before the Tribunal and all the grounds of appeal relate thereto.
The Ld. AR submitted that the Ld. CIT(E) did not provide the assessee with adequate opportunity of hearing to present and substantiate its case before him by filing the requisite details/documents as called upon by the Ld. CIT(E) vide issue of second notice dated 28.11.2024. He submitted that due to the extensive and voluminous nature of the documents sought in a short time frame i.e. by 05.12.2024, the assessee requested for an adjournment on 04.12.2024 which was not considered. He submitted that given an opportunity the assessee is in a position to submit all the requisite details/documentary evidence before the Ld. CIT(E) in support of its application and respond to various discrepancies noticed by the Ld. CIT(E). He, therefore, prayed that the matter may be set aside to the file of the Ld. CIT(E) to adjudicate the same afresh on merits after affording one more opportunity of being heard to the assessee.
The Ld. DR conceded to the above proposition of the Ld. AR.
We have considered the rival submissions and perused the records. It is an admitted fact that due to non-compliance to the notice issued by the Ld. CIT(E) asking for certain details/documents and lack of evidence regarding genuineness of the charitable activities of the assessee trust, he rejected the assessee's application for grant of registration u/s 12A of the Act and also cancelled the provisional registration granted earlier. 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/documents/evidence before the Ld. CIT(E). Considering the totality of the facts and in the circumstances of the assessee's case, we are of the view that it would be judicially expedient and in the interest of justice and fair play if the matter is restored back to the file of Ld. CIT(E) to consider the assessee's application for registration u/s 12A(1)(ac)(iii) of the Act afresh and decide the matter on merits, in accordance with facts and law after allowing one more opportunity of being heard to the assessee and present its case. Needless to say, the assessee shall provide the requisite support in terms of submitting the relevant details/documentary evidence as may be required/called upon on the appointed date without seeking adjournment under any pretext unless for sufficient cause, failing which the Ld. CIT(E) shall be at liberty to pass appropriate order as per law. We order accordingly.
In the result, the appeal of assessee is treated as allowed for statistical purposes.
The facts as narrated above in ITA No. 376/PUN/2025 are identical to ITA No. 377/PUN/2025 except that the assessee is seeking registration u/s.80G of the Act in this appeal which has been rejected by the Ld. CIT(E). Since, the Ld. CIT(E) has inter alia rejected the grant of registration u/s 12 of the Act and cancelled the provisional registration granted earlier, he refused to grant approval u/s 80G of the Act. The Ld. CIT(E) rejected the assessee's application for registration u/s 80G of the Act and cancelled the provisional registration granted earlier without going into the merits by observing as under :
“7. Considering the above facts discussed in the show notice and discrepancies noticed and also that the assessee has not complied with the provisions of sub-clause (a) of clause (ii) of second proviso to section 80G(5) of the Income Tax Act, 1961 as well as the provisions of Rule 11AA(2) of Income Tax Rules, 1962 in spite giving sufficient opportunities, the undersigned is unable to draw any satisfactory conclusion about the genuniness of activities of the assessee and fulfillment of conditions laid down in clause (i) to (v) of section 80G(5) of the Act.
As per the condition vide clause (1) of section 80G(5) of the Income Tax Act, 1961, the approval is available only if the income of the institution or fund is not be liable to inclusion in its total income under the provisions of section 11 and 12 or clause (23AA) / clause (23C) of section 10 of the Income Tax Act. 1961. Exclusions for the said condition are detailed in clause (a), (b) and (c) of proviso to clause (1) of section 80G(5) of the Act. Therefore, the institution / fund is required to be regularly registered/approved either under section 12AB or 10(23AA) or 10(230) of the Income Tax Act, 1961 or the institution / fund shall be a Regimental Fund or Non-Public Fund established by the armed forces of the Union for the welfare of the past and present members of such forces or their dependents.
1 In the instant case it is noticed that the assessee is neither regularly registered u/s 12AB read with section 12A(1)(ac)(i) / 12A(1)(ac)(m) nor having regular approval under section 10(23C) read with clause (1) / (10) of first proviso to the said section and the case is not covered under the exclusions provided vide proviso to clause (i) of section 80G(5) of the Act. The assessee is not approved under section 10(23AA) of the Act. The assessee is also not a Regimental Fund or Non-Public Fund established by the armed forces of the Union for the welfare of the past and present members of such forces or their dependents. In fact, the application of the assessee in form No. 10AB for registration u/s 12AB filed under the provisions of section 12A(1)(ac)(iii) of the Act has been rejected vide order dated_13/12/2024. Therefore, the condition (i) of section 80G(5) of the Income Tax Act, 1961 is also not fulfilled in this case.
In view of the above, the application filed by the assessee is hereby rejected and the provisional approval granted on 24/09/2021 under clause (iv) for first proviso to section 80G(5) of the Income Tax Act, 1961 is hereby cancelled."
Aggrieved, the assessee is in appeal before the Tribunal raising the following grounds of appeal :
"
The CIT (Exemption) erred in law and facts by rejecting the application and cancelling provisional registration without affording adequate opportunity of being heard, violating principles of natural justice.
The CIT (Exemption) erred in ignoring the adjournment request dated 04/12/2024 and proceeding to reject the application summarily.
The CIT (Exemption) erred in holding the appellant non-compliant despite substantial compliance with notices and furnishing majority of documents.
The CIT (Exemption) erred in issuing a notice dated 28/11/2024 with an unreasonably short compliance timeline (i.e. 5 working days), rendering compliance impracticable.
Without prejudice, the CIT (Exemption) has erred in cancelling the provisional registration granted to the appellant which is bad in law.”
The Ld. AR made similar submissions before us as are made in the above ITA No. 377/PUN/2025. Since, the facts and submissions in ITA No. 376/PUN/2025 are similar to ITA No. 377/PUN/2025, the findings given by us while deciding the appeal of assessee in ITA No. 377/PUN/2025 would mutatis mutandis apply to ITA No. 376/PUN/2025, as well. Accordingly, the matter is restored to the file of the Ld. CIT(E) to decide the assessee's application u/s 80G of the Act afresh on merits. The grounds of appeal of the assessee are accordingly allowed for statistical purposes.
To sum up, both the appeals of the assessee in ITA Nos.377 & 376/PUN/2025 are allowed for statistical purposes. Order pronounced in the open court on 29th April, 2025. (R.K. Panda) VICE PRESIDENT (Astha Chandra) JUDICIAL MEMBER पुणे / Pune; दिनांक / Dated : 29th April, 2025. रवि आदेश की प्रतिलिपि अग्रेषित /