GEMS CHAMBER OF COMMERCE ASSOCIATION,NASHIK vs. CIT(EXEMPTION), PUNE

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ITA 2527/PUN/2024Status: DisposedITAT Pune19 March 2025Bench: SHRI R. K. PANDA (Vice President), MS. ASTHA CHANDRA (Judicial Member)1 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal restored the issue to the file of the CIT(E) with a direction to grant one more opportunity to the assessee to submit requisite details and decide the issue afresh. The assessee was directed to submit details without seeking adjournments.

What were the facts?

The assessee filed an application for approval under Section 80G of the Income Tax Act. The CIT(E) rejected the application after the assessee failed to respond to a show cause notice regarding discrepancies and non-fulfillment of conditions under Section 80G(5).

What were the issues?

Whether the CIT(E) erred in rejecting the application for 80G approval without considering the assessee's submission and whether the matter should be remanded for fresh consideration given the subsequent grant of registration under Section 12AB.

Which sections of the Income-tax Act were involved?

Section 80G,Section 80G(5),Section 80G(5)(iv)(B),Section 11,Section 12AB(1)(b),Section 10AB,Section 10AC,Section 147,Section 148,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE

For Appellant: Shri Akshay Modi
For Respondent: Shri Amol Khairnar, CIT-DR

This appeal filed by the assessee is directed against the order dated 13.09.2024 of the Ld. CIT(Exemption), Pune rejecting the application for approval u/s 80G of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).

2.

Facts of the case in brief, are that the assessee filed an application in Form No.10AB on 28.03.2024 for approval under sub clause (B) of (iv) of first proviso to sub section (5) of section 80G of the Act. With a view to verify the genuineness of the activities of the assessee and fulfillment of conditions laid down in clause (i) to (v) of section 80G(5) of the Act, a notice was issued through ITBA portal on 23.05.2024 requesting the assessee to upload certain information / clarification.

The assessee filed certain details which were verified by the Ld. CIT(E). Upon verification, he noted certain discrepancies for which another notice was issued to the assessee. However, the assessee did not file any response to the same for which the Ld. CIT(E) rejected the application for grant of approval u/s 80G by observing as under: “5. The assessee was requested to show cause as to why the application should not be rejected and why the approval granted under section 80G(5) of the Income Tax Act, 1961 should not be cancelled. The assessee was also given opportunity of being heard vide the said notice. The assessee was specifically informed that in the event of failure to comply by the due date, the application shall be liable to be rejected and the approval shall also be liable to be cancelled. The compliance to the said notice was due on 05/09/2024. The notice was duly served on the assessee through e-portal and email.

6. Since, the assessee has not furnished any explanation to the discrepancies communicated to it, it is presumed that the assessee has nothing to say in the matter.

7. Considering the above facts discussed in the show cause notice and discrepancies noticed and without prejudice to the above, as per financial the statements and ITRs furnished by the assessee, it is seen that the trust has claimed deduction u/s 11. Therefore, said provisions of sec.80G(5)(iv)(B) of the Act are not applicable in the assessee's case. And thus, the undersigned is not satisfied about the fulfilment of conditions laid down in clause (i) to (v) of section 80G(5) of the Act and has left no alternative but to reject the application.

8.

In view of the above, the application under sub clause (B) of (iv) of first proviso to sub-section (5) of section 80G of the Income Tax Act, 1961 filed by the assessee is hereby rejected.”

3.

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 as well in law, the CIT (Exemption) erred in assuming jurisdiction under third proviso Clause (b) Sub Clause (B)(II) below Section 80G(5) of the I.T. Act, 1961 to pass the order in Form 10AD (being the Order appealed against) rejecting the application for renewal of the existing approval granted u/s 80G(5) of the Act granted in Form 10AC on 10-03-2022 for and from the Asstt. Year.

2022-23 to 2024-25 purely on mis-conceptual inferences and misreading of the provisions of the law treating the application rejected as non- maintainable and hence, the CIT(E)'s action passing the order in Form 10AD being without jurisdiction, bad in law, perverse, prejudicial, arbitrary, unwarranted of facts and material on records, illegal and invalid, is liable to be quashed or annulled in toto. (2) Your appellant further reserves it's rights to add, alter, amend or modify any of the aforesaid grounds before or at the time of hearing of the appeal.

4.

The Ld. Counsel for the assessee referring to the copy of registration granted u/s 12AB(1)(b) of the Act dated 18.11.2024, copy of which is placed at pages 1 to 4 of the paper book, submitted that the Ld. CIT(E) before considering the application for grant of registration u/s 12AB, rejected the approval u/s 80G. He submitted that since the Ld. CIT(E) has granted permanent registration u/s 12AB(1)(b), therefore, the matter may be restored to the file of the Ld. CIT(E) for deciding the issue afresh.

5.

The Ld. DR has no objection for the same.

6.

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 the assessee did not respond to the notice issued by the Ld. CIT(E) pointing out certain discrepancies in the submissions filed by the assessee for which he rejected the application filed for approval of deduction u/s 80G. It is also an admitted fact that the Ld. CIT(E) has granted permanent registration to the assessee u/s 12AB(1)(b) of the Act which is after rejection of the application for grant of approval u/s 80G. 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. 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 Ld. CIT(E) with a direction to grant one more 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 Ld. CIT(E) on the appointed date without seeking any adjournment under any pretext, failing which the Ld. 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.

7.

In the result, the appeal filed by the assessee is allowed for statistical purposes.

Order pronounced in the open Court on 19th March, 2025.

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