Loading judgment…
Facts
The assessee, a Charitable Trust, applied for registration under section 12A(1)(ac)(iii) of the Income Tax Act. The CIT(E) issued notices seeking clarifications on the trust's activities and financial statements. The assessee failed to provide complete information and sought adjournments, which were rejected, leading to the rejection of the application.
Held
The Tribunal restored the matter to the file of the CIT(E) with a direction to grant one more opportunity to the assessee to submit the requisite documents and decide the issue afresh. The assessee was directed to make submissions without seeking further adjournments.
Key Issues
Whether the rejection of the assessee's application for registration by the CIT(E) without affording adequate opportunity of being heard and considering the adjournment request was justified.
Sections Cited
12A(1)(ac), 12AB
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH, PUNE
Before: SHRI R.K. PANDA & MS. ASTHA CHANDRA
The appeal filed by the assessee is directed against the order dated 26.10.2024 of the Ld. Commissioner of Income Tax (Exemption), Pune [“CIT(E)”] whereby he rejected the application of the assessee filed before him on 17.05.2024 in Form No. 10AB under clause (iii) of section 12A(1)(ac) of the Income Tax Act, 1961 (the “Act”).
The assessee has raised the following grounds of appeal :-
1. The learned Respondent The learned Respondent has acted against the spirit has violated the principles of settled principles of law. The learned Respondent of natural justice to the has denied the adequate opportunity to the Appellant & acted in Appellant for furnishing the information as required unjustified & unusual haste by the learned Respondent. The learned Respondent by denying the opportunity has conveniently connived at the application for of being heard. adjournment for some period & passed the order under dispute in undue haste without considering the fact that the limitation period for disposing off the application was away by more than 60 days from the end of the month in which the impugned order was passed.
Briefly stated, the facts of the case are that the assessee is a Charitable Trust engaged in owning, operating & maintaining the residential hostel facilities & providing healthcare facilities for poor & backward students. On receipt of application filed in Form No. 10AB u/s 12A(1)(ac)(iii) of the Act on 17.05.2024 along with annexures thereto, the Ld. CIT(E) with a view to verify the genuineness of activities of the assessee trust 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, issued a notice through ITBA portal on 24.06.2024 which was duly served via e-portal/ email requesting the assessee to upload certain information/clarification stated therein. The assessee was requested to submit its compliance by 08.07.2024. On verification of the details submitted by the assessee in response to the said notice and the documents submitted along with the application, various discrepancies were noticed by the Ld. CIT(E) which were communicated to the assessee by issue of another notice on 15.10.2024 which was duly served upon the assessee via email/e-portal. The said discrepancies are as under : "(i) Note on activity furnished by you is very general. Furnish activity note giving details viz. dates and places of each activities carried out by your trust, details of beneficiaries, how they were identified, etc. (ii) In respect of medical camp conducted, furnish the detail of experts/nurses/doctors appointed by your trust along with their educational qualification details/documents. (iii) Furnish copies of bill/invoices of expenses done on activities as shown in your financial statement."
3.1 In view of the above, the assessee was requested to show cause as to why the application should not be rejected and why the registration granted u/s 12AB of the Act should not be cancelled in the event of failure to comply by the due date i.e. 22.10.2024. 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 trust, the Ld. CIT(E) proceeded to pass the impugned order rejecting the assessee’s application and cancelling the provisional registration granted on 16.02.2022 u/s 12AB r.w.s. 12A(1)(ac)(vi) of the Act.
Aggrieved, the assessee is in appeal before the Tribunal and all the grounds of appeal relate thereto.
The Ld. AR submitted that non-compliance before the Ld. CIT(E) was not intentional. He submitted that the Ld. CIT(E), in utter disregard to the principle of natural justice, had proceeded to pass the order under dispute on 26.10.2024 without affording an opportunity of being heard. The Ld. CIT(E) had not considered the application filed by the assessee seeking adjournment and extension of time for furnishing the records including the copies of bills /invoices in respect of medical camps. The Ld. CIT(E) has acted in unusual haste for passing the impugned order. He further submitted that the Ld. CIT(E) has violated the principles of natural justice and acted in unjust manner considering the availability of sufficient time of more than two months for the disposal of the application u/s 12A(1)(ac)(iii) filed by the assessee, the limitation period of which was only to expire on 31.12.2024. The Ld. AR submitted that given an opportunity the assessee trust is in a position to substantiate its case before the Ld. CIT(E) by filing all the requisite details/documents as called upon by him and therefore prayed that the matter may be restored to the file of the Ld. CIT(E) for fresh adjudication on merits after allowing due opportunity of hearing to the assessee.
The Ld. DR fairly conceded to the above request of the Ld. AR to remand the matter back to the file of the Ld. CIT(E).
We have heard the Ld. Representative of the parties, perused the material on record. We observe that the assessee in response to the first notice issued by the Ld. CIT(E) filed the requisite details. After verification of assessee’s response, the Ld. CIT(E) issued another notice pointing out certain discrepancies. The assessee however failed to file compliance and sought adjournment which was rejected by the Ld. CIT(E). In the absence of requisite details/documents/clarification filed by the assessee, the Ld. CIT(E) could not draw any satisfactory conclusion about the genuineness of the activities of the assessee trust and proceeded to pass the impugned order. Before us, the Ld. Counsel for the assessee has submitted that the assessee can file all the requisite details/documentary evidence before the Ld. CIT(E), given an opportunity. Considering the totality of the facts and in the circumstances of the case, we deem it fit and proper in the interest of justice to restore the matter to the file of the Ld. CIT(E) with a direction to grant one more opportunity to the assessee to substantiate its case by filing requisite details/documents and decide the issue afresh as per fact and law after giving due opportunity of being heard to the assessee. The assessee is also hereby directed to make its submissions before the Ld. CIT(E) on the appointed date without seeking any adjournment under any pretext unless required for a reasonable cause, failing which the Ld. CIT(E) shall be at liberty to pass appropriate order as per law. We hold and direct accordingly. The ground raised by the assessee is accordingly allowed for statistical purposes.
In the result, the appeal of assessee is treated as allowed for statistical purposes.
Order pronounced in the open court on 30th April, 2025.