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Facts
The appellant, a Trust, applied for registration under Section 12AA of the Income Tax Act. The CIT(E) denied the application after the appellant failed to provide complete information in response to a second notice, citing the hospitalization of the authorized representative's mother.
Held
The Tribunal held that the appellant should be granted an opportunity to substantiate its case, considering the circumstances and the short time given for compliance. The matter was restored to the CIT(E) for a fresh decision.
Key Issues
Whether the denial of registration by the CIT(E) was justified given the appellant's reasons for non-compliance with the second notice, and whether the appellant should be granted an opportunity to present its case.
Sections Cited
12AA, 12A(1)(ac)
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Income Tax Appellate Tribunal, PUNE BENCHES “A”, PUNE
Before: DR.MANISH BORAD & SHRI VINAY BHAMORE
PER DR. MANISH BORAD, ACCOUNTANT MEMBER :
The captioned appeal at the instance of appellant is directed against the order framed by ld. Commissioner of Income Tax (Exemption), Pune dated 02.12.2024 denying grant of registration u/s.12AA of the Income Tax Act, 1961 ( in short ‘the Act’).
Facts in brief are that the appellant is a Trust, filed application on Form No.10AB under clause (iii) of section 12A(1)(ac) of the Act for grant of regular registration on 29.06.2024. In order to verify the genuineness of activities of the appellant, the ld. CIT (Exemption) issued a notice through ITBA portal on 05.08.2024 calling upon the appellant to file certain information/clarification. The appellant filed the requisite details. However, the ld.CIT(E) issued another notice to the appellant on 21.11.2024 pointing out certain discrepancies (para 4 of the impugned order) fixing the date of compliance as 27.11.2024. There was no compliance from the side of appellant to such notice. In the circumstances, the ld.CIT(E) rejected the application filed by the appellant, thereby cancelling the provisional registration granted to it.
Aggrieved appellant is now in appeal before the Tribunal in the present appeal assailing the impugned order denying grant of registration u/s.12AA of the Act.
Ld. Counsel for the appellant submitted that at the relevant point of time, the mother of Authorised Representative was admitted in hospital and therefore, he could not make the required submissions before the ld.CIT(E). Further, the time required for compliance to the second notice issued by ld.CIT(E) is very short and unreasonable. Therefore, the appellant may be granted another opportunity for making its submissions before ld.CIT(A) by remanding the matter.
Ld. Departmental Representative submitted that ample opportunities were granted by the ld. CIT(E) but the appellant did not avail the same, therefore, the order of the ld. CIT(E) be upheld.
We have heard both the sides and perused the record placed before us. We find the appellant in response to the first notice issued by the ld. CIT(E) has filed the requisite details. However, when the ld. CIT(E) issued another notice asking the appellant to clarify regarding certain discrepancies found in the above submissions, the appellant failed to comply to the same. It is the submission of the Ld. Counsel for the appellant that the AR could not make compliance to the second notice owing to hospitalisation of his mother. Therefore, the appellant should be given an opportunity to substantiate its case by filing the requisite details to the satisfaction of Ld. CIT(E). The affidavit given by Mr. Akash Govindprasad Mundada, Chartered Accountant along with medical reports of her mother is placed on record. We further find that the ld.CIT(E) in the second notice dated 21.11.2024 has not given sufficient time to the appellant for making compliance. Considering the totality of the facts of the case, submissions made by the Ld. Counsel for the appellant 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 an opportunity to the appellant to substantiate its case by filing requisite details and decide the issue as per fact and law after giving due opportunity of being heard to the appellant. The appellant is also hereby directed to make its submissions, if any, before 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 appellant are accordingly allowed for statistical purposes.
In the result, the appeal of the appellant is allowed for statistical purposes.
Order pronounced on this 04th day of March, 2025.