Loading judgment…
Facts
The assessee filed an application for registration under Section 12A and provisional registration under Section 12AB. The CIT(Exemption) rejected the application and cancelled the provisional registration due to the assessee's non-compliance with statutory notices. The assessee's counsel argued that non-compliance was due to an employee's mistake and requested an opportunity to resubmit details.
Held
The Tribunal noted the assessee's non-compliance but, considering the interest of justice and the possibility of rectifying the mistake, restored the issue to the CIT(E). The assessee was granted a final opportunity to furnish details, with a direction to avoid adjournments.
Key Issues
Whether the rejection of registration and cancellation of provisional registration by the CIT(E) due to non-compliance was justified, and whether the assessee should be granted a final opportunity to provide details.
Sections Cited
12A, 12AB, 12A(1)(ac), 12AB(1)(b)(i), 12A(1)(ac)(vi)(A)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE
This appeal filed by the assessee is directed against the order dated 06.12.2024 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 31.08.2024 for registration of the trust under clause (iii) of section 12A(1)(ac) 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 17.10.2024 requesting the assessee to upload certain information / clarification. The assessee was also requested to submit the compliance by 04.11.2024. Since the assessee did not comply to the said notice, another opportunity was granted by the Ld. CIT(E) vide letter dated 08.11.2024 asking the assessee to explain as to why the application for registration u/s 12A should not be rejected and why the provisional registration granted earlier u/s 12AB should not be cancelled. Despite this letter there was no compliance from the side of the assessee for which the Ld. CIT(E) granted one more opportunity to the assessee. However, due to consistent non-compliance to the statutory notices, the Ld. CIT(E) rejected the application for grant of registration u/s 12A of the Act and also cancelled the provisional registration granted earlier u/s 12AB by observing as under: “7 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, it is seen that trust has obtained provisional registration in form 10AC under item (A) on 01/04/2024 However, it is seen that the trust's activities were commenced much before the said date. Therefore, said provisions of sec. 12A(1)(ac)(vi)(A) of the Act are not applicable to the assessee's case.
In view of the above, the application filed by the assessee is hereby rejected and the provisional registration granted on 01/04/2024 under Item (A) of sub-
clause (vi) of clause (ac) of sub-section (1) of section 12A of the Income Tax Act, 1961 is hereby cancelled.”
Aggrieved with such order of Ld. CIT(E), the assessee is in appeal before the Tribunal by raising the following grounds: 1. On the facts and in the circumstances of the case and in law Ld. CIT Exemption has erred in rejecting the application for registration u/s 12AB, without appreciating the facts of the case, that is a religious trust setup mainly to upkeep the old temple of "Lord Khandoba", and exclusively engaged in religious activities, and such other factors, Your appellant prays for restoring the matter before CIT Exemption for reconsideration of the application of registration u/s 12AB of the IT Act, 1961. Your appellant craves for to add, alter amend, modify, delete any or all grounds of appeal before or during the course of hearing in the interest of natural justice.
The Ld. Counsel for the assessee submitted that due to mistake on the part of the employee of the trust, the details could not be furnished. He submitted that given an opportunity the assessee is in a position 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).
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 due to non-compliance to the notice issued by the Ld. CIT(E) asking for certain details, he rejected the application for grant of registration and also cancelled the provisional registration granted earlier. It is the submission of the Ld. Counsel for the assessee that due to mistake on the part of the employee of the trust, the details could not be furnished. It is also his submission 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 30th April, 2025.