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Facts
The assessee applied for registration under Section 12A and approval under Section 80G of the Income Tax Act, 1961. The CIT(Exemption) rejected these applications and cancelled the provisional registration under Section 12AB due to the assessee's failure to respond to notices and provide requested information regarding its activities.
Held
The Tribunal noted the assessee's claim that notices were sent to a former consultant, causing non-compliance. In the interest of justice, the Tribunal restored the matter to the CIT(Exemption), granting one final opportunity for the assessee to submit the requisite details. The assessee is directed to comply without seeking adjournments, failing which the CIT(Exemption) may pass an appropriate order.
Key Issues
Whether the CIT(Exemption) was justified in rejecting applications for Section 12A registration and Section 80G approval due to non-compliance, and if the assessee should be granted a further opportunity to present its case.
Sections Cited
12A, 80G, 12A(1)(ac), 12AB, 12AB(1)(b)(i), 12A(1)(ac)(vi)
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
The above two appeals filed by the assessee are directed against the separate orders dated 15.10.2024 of the 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 approval u/s 80G of the Act. For the sake of convenience, both these appeals were heard together and are being disposed of by this common order.
Facts of the case in brief, are that the assessee filed an application in Form No.10AB on 21.05.2024 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 24.06.2024 requesting the assessee to upload certain information / clarification. Although the notice was duly served on the assessee through e-portal and e-mail, however, the assessee did not respond to such notice. The CIT(Exemption) therefore, rejected the application filed for grant of registration u/s 12A of the Act and also cancelled the provisional registration granted earlier u/s 12AB of the Act by observing as under: “5. 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.
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.
8. 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.
In view of the above, the application filed by the assessee is hereby rejected and the provisional registration granted on 11/03/2022 under section 12AB read with section 12A(1)(ac) (vi) of the Income Tax Act, 1961 is hereby cancelled.”
Similarly, in absence of any response from the side of the assessee, he also rejected the application for approval u/s 80G of the Act.
Aggrieved with such order of CIT(Exemption) rejecting the application for grant of registration u/s 12A and approval u/s 80G, the assessee is in appeal before the Tribunal.
The Ld. Counsel for the assessee at the time of hearing submitted that the notice issued by the office of the CIT(Exemption) went to the e-mail ID of previous tax consultant who did not inform the assessee for which the assessee could not file any submission on the appointed date. He submitted that in the interest of justice, the assessee should be given an opportunity to substantiate its case by filing the requisite details before the Ld. CIT(E).
6. The Ld. DR on the other hand heavily relied on the order of the Ld. CIT(E) and submitted that despite opportunities granted by the Ld. CIT(E), the assessee did not make any submission for which the Ld. CIT(E) was compelled to pass this order.
We have heard the rival arguments made by both the sides, perused the order of the CIT(E) and the paper book filed on behalf of the assessee. It is an admitted fact that the assessee did not respond to the notice issued by the office of CIT(Exemption) for which he rejected the application filed by the assessee for grant of registration u/s 12A of the Act and also cancelled the provisional registration granted earlier u/s 12AB. Similarly due to non-compliance of the assessee, he also rejected the application for approval u/s 80G 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 the requisite details before the CIT(E) to his satisfaction. 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(Exemption) 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(Exemption) 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, both the appeals filed by the assessee are allowed for statistical purposes.
Order pronounced in the open Court on 20th March, 2025.