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Facts
The assessee filed an application for grant of registration under Section 80G of the Income Tax Act. The CIT(E) rejected the application for non-compliance despite multiple opportunities being given.
Held
The Tribunal held that the assessee was prevented by sufficient cause from prosecuting the appeal effectively and deserved another opportunity. The impugned order was set aside and the matter was remitted back to the CIT(E).
Key Issues
Whether the CIT(E) was justified in rejecting the application for 80G registration without providing adequate opportunity to the assessee and whether the assessee had sufficient cause for non-compliance.
Sections Cited
80G, 80G(5), 80G(5)(vi), 80G(5)(iv)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCHES “B” :: PUNE
Before: DR.MANISH BORAD & MS.ASTHA CHANDRA
ORDER
PER DR. MANISH BORAD, AM:
This appeal filed by the assessee is directed against the order of ld.Commissioner of Income Tax(Exemption), Pune rejecting the application for grant of registration u/s.80G of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). “1. On the facts and in the circumstances of the case and in law Ld.CIT Exemption has erred in not granting registration u/s 80G(5)(vi) without appreciating the facts of the case. Your appellant prays for grant of such registration u/s s 80G(5)(iv) of IT Act.
ITA No.2584/PUN/2024 [A] Your appellant prays for deletion of entire addition. 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.”
2. Brief facts of the case are that the assessee filed an application in Form No.10AB under clause (iii) of first proviso to sub-section(5) section 80G of the Income Tax Act, 1961 dated 29.06.2024. In order to verify the genuineness of the activities of the assessee and in 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 dated 08.08.2024 was issued through ITBA Portal requesting the assessee to upload certain information / clarification. But, the assessee did not furnish compliance to the said. However, another opportunity accorded by ld.CIT(E) to assessee vide notice dated 25.09.2024 requesting to show cause as to why the application should not be rejected and why the approval granted under section 80G(5) of the Act should not be cancelled. However, the assessee neither furnished compliance to the show cause notice nor availed the opportunity of being heard. Since the assessee did not furnish any explanation to the discrepancies communicated, the ld.CIT(E) held that the assessee has failed to comply despite giving sufficient opportunities including an opportunity of being heard. He, therefore, rejected the application [A] filed by the assessee for grant of registration under section 80G(5) of the Act and also the provisional approval dated 30.05.2022 u/s.80G(5)(vi) read with clause (iv) of first proviso to section 80G(5) was cancelled.
Aggrieved with such order of ld.CIT(Exemption), the assessee is in appeal before the Tribunal.
The ld.Counsel for the assessee at the outset submitted that necessary compliance could not be made before the ld.CIT(E) due to certain unavoidable circumstances, assessee could not furnish any reply to the discrepancies communicated to it. The ld.Counsel for the assessee submitted that in the interest of justice, the assessee should be given an opportunity to go before the ld.CIT(E) and also to submit necessary details including credible evidence to prove the genuineness of charitable activity carried out by the assessee. He, accordingly, submitted that the matter may be restored to the file of ld.CIT(E).
On the other hand, ld.Departmental Representative(ld.DR) for the Revenue supported the order of ld.CIT(E).
ITA No.2584/PUN/2024 [A]
We have heard rival contentions and perused the record placed before us. We observe that after the assessee filed certain details in response to the notice issued by ld.CIT(E). Certain discrepancies were noticed by him for which he issued another notice asking the assessee to make its submission clarifying the discrepancies a notice issued on ITBA Portal. Various opportunities of being heard to assessee were given by ld.CIT(E).
However, upon the explanation to the discrepancies communicated by assessee, the ld.CIT(E) not satisfied about the charitable nature and the genuineness of activities of the assessee and rejected the application for grant of registration under section 80G of the Act.
We have given our thoughtful consideration to the facts and circumstances of the case, lack of proper and fair opportunity having been granted to appellant trust and the principles of natural justice being fair to both the parties and considering the same, we are of the view that the appellant was for sufficient cause prevented from prosecuting the appeal effectively, therefore deserves to be given one more opportunity to prove its case on merits. In view thereof, without dwelling into merits of the issue, we set-aside the impugned [A] order under challenge and remit back to the file of Ld. CIT(E) to the stage of its institution with a direction to adjudicate the subject matter denovo in accordance with law after providing three effective opportunities and pass a speaking order. The Assessee is directed to provide correct Email-Id to the Department for getting notices through ITBA portal. Assessee is also directed to remain vigilant and not to seek adjournment unless otherwise required. Accordingly, grounds of appeals raised by the assessee are allowed for statistical purpose.