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Facts
The assessee's application for registration under section 12A(1)(ac)(vi) of the Income Tax Act, 1961 was rejected by the CIT(E) due to perceived discrepancies in submitted evidence regarding the genuineness of activities and expenses. The CIT(E) noted insufficient details, lack of bills/vouchers, and inadequate photographic evidence.
Held
The Tribunal restored the matter to the file of the CIT(E) for fresh adjudication. The assessee was granted one more opportunity to provide all requisite details and documentary evidence to substantiate its application, without seeking adjournments.
Key Issues
Whether the CIT(E) erred in rejecting the assessee's registration application without properly appreciating the genuineness of activities and compliance with statutory requirements, and whether the assessee should be given another opportunity to present evidence.
Sections Cited
12A(1)(ac)(vi), 12AB, 17A(2)
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Income Tax Appellate Tribunal, “A” BENCH, PUNE
Before: SHRI R.K. PANDA & MS. ASTHA CHANDRA
आयकर अपील सं. / M/s. Shri Agrasen Bhawan Agrawal Samaj CIT (Exemption), Pune Hiwarkhed Dhiraj Santosh Bajaj Maharaja Agrasen Marg, Hiwarkhed, Telhara, Vs. Akola-444103 PAN : AAXTS1042D अपीलार्थी / Appellant प्रत्यर्थी / Respondent Assessee by : Shri Manish Somani Department by : Shri Prashant Gadekar Date of hearing : 16-04-2025 Date of 25-04-2025 Pronouncement : आदेश / ORDER
PER ASTHA CHANDRA, JM :
The appeal filed by the assessee is directed against the order dated 30.09.2024 of the Ld. Commissioner of Income Tax (Exemption), Pune [“CIT(E)”] whereby he rejected the application of the assessee filed on 06.03.2024 before him in Form No. 10AB u/s 12A(1)(ac)(vi)-ITEM(B) of the Income Tax Act, 1961 (the “Act”).
The assessee has raised the following grounds of appeal :- “1. Ground No. 1: 1.1. On the facts and circumstances of the case, the Ld. CIT (Exemptions) erred in rejecting the appellant's application for registration under section 12A(1)(ac)(vi) of the Income Tax Act, 1961, without properly appreciating the genuineness of the appellant's activities and the compliance with statutory requirements. 1.2. The Appellant prays that this ground should be considered.
2. Ground No. 2: 2.1. The CIT (Exemptions) arbitrarily dismissed the evidence on the grounds of absence of specific signage in photographs and perceived inadequacy of bills/vouchers, without objectively evaluating the genuineness of the activities or the compliance with Rule 17A of the Income Tax Rules, 1962. 2 2.2. The Appellant prays that this ground should be considered. The Appellant may be allowed to add, amend or alter the above grounds in the interest of natural justice.”
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)(vi) 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 09.05.2024 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 24.05.2024. 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 07.08.2024 which was duly served on the assessee via e-portal/email. The said discrepancies are reproduced below : "(i) You have furnished a general note on activities. Details like date and place of activity, details of beneficiaries, how they were identified, experts who rendered services, other relevant information has not been furnished.
(ii) No supporting evidence viz bills/invoices of expenditure on each activity, photographs, cuttings etc has been furnished to prove the genuineness of activities."
3.1 The assessee was requested to show cause as to why the application should not be rejected and why the provisional registration granted earlier should not be cancelled in the event of failure to comply by the due date i.e. 14.08.2024. The assessee furnished its reply on 12.08.2024, however, the same was not found tenable by the Ld. CIT(E) for the reasons stated below : “(i) The expenses made on the objects of the trust as per the financial statements for the last 3 years are that of social work (2020-21), cultural activity (2021-22) and distribution of food packets, cultural program (2022- 23). However, the said expenses are not supported with any credible evidences such as bills/vouchers. Thus, the genuineness of the said activities cannot be arrived at. Further, the photographs submitted does not 3 show any signage or banners displayed in the photographs so as to show association of the assessee with said activities.”
3.2 The Ld. CIT(E) proceeded to pass the impugned order rejecting the application of the assessee and cancelling the provisional registration granted to the assessee 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 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 not satisfied 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.
8. In view of the above, the application dated 06/03/2024 filed by the assessee under section 12A(1)(ac) (vi)-ITEM(B) of the Income Tax Act, 1961 is hereby rejected.”
Dissatisfied, the assessee is in appeal before the Tribunal.
The Ld. AR submitted that the Ld. CIT(E) has rejected the application of the assessee and also cancelled the provisional registration alleging that the assessee failed to prove the genuineness of the activities of the trust by filing credible supporting evidence in respect of the expenses claimed to have been incurred by it. He submitted that the assessee trust is a small trust located in Akola district and given an opportunity the assessee is in a position to substantiate its case before the Ld. CIT(E) by submitting all the requisite details/documentary evidence before him in support of its application. He, therefore, prayed that the matter may be set aside to the file of the Ld. CIT(E) to adjudicate the same afresh after on merits after affording one more opportunity of being heard to the assessee.
The Ld. DR had no objection to the above proposition of the Ld. AR.
We have considered the submissions of the Ld. Representatives of the parties and perused the records. We observe that the Ld. CIT(E) rejected the application for grant of registration and also cancelled the provisional registration granted earlier due to the assessee’s failure to prove the genuineness of the activities of the trust and the expenses incurred by it by filing the supporting credible evidence in respect thereto to his satisfaction. It is the submission of the Ld. Counsel for the assessee 4 before us that given an opportunity, the assessee is in a position to substantiate its case/application by filing all the required details/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)(vi) of the Act afresh on merits, in accordance with facts and law, after allowing one more opportunity of being heard to the assessee and present its case. 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 unless there is a reasonable 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.