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Facts
The assessee filed an application for registration under section 12A(1)(ac)(iii) of the Income Tax Act. After issuing notices and finding discrepancies, the CIT, Exemption rejected the application as the assessee did not provide satisfactory explanations.
Held
The Tribunal found that while the assessee had complied with initial notices, a discrepancy arose from a subsequent notice for which only seven days were given. In the interest of justice, the Tribunal set aside the CIT's order and remanded the matter back for fresh consideration.
Key Issues
Whether the CIT, Exemption erred in rejecting the application for registration without providing adequate opportunity to the assessee to explain the discrepancies.
Sections Cited
12AB, 12A(1)(ac)(iii), 12A(1)(ac)(vi), 12AB(1)(b)(i), 17A(2)
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Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE
Before: SHRI MANISH BORAD & SHRI VINAY BHAMORE
ORDER
PER VINAY BHAMORE, JM:
This appeal filed by the assessee is directed against the order dated 16.12.2024 passed by Ld. CIT, Exemption, Pune rejecting the application for registration u/s 12AB of the IT Act.
The appellant has raised the following revised grounds of appeal :- “
1. The ld CIT Exemption erred in law and on facts in rejection of application for Registration u/s 12A(1)(ac)(iii) and cancelling provisional registration granted u/s 12A(1)(ac)(vi) dt 28.03.2023 without considering the facts and circumstances of the case.
2. The appellant prays for opportunity so as to explain its case.
3. The appellant craves leave to add, alter, modify or substitute any ground of appeal at the time of hearing.”
3. Facts of the case, in brief, are that the assessee filed application for registration in Form No.10AB under clause (iii) of section 12A(1)(ac) of the IT Act on 18.06.2024. With a view to verify the genuineness of 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 by Ld. CIT, Exemption, Pune through ITBA portal on 16.07.2024 requesting the assessee to upload certain information/clarification. The desired information was furnished by the assessee. On verification of said information, Ld. CIT, Exemption, Pune found certain discrepancies and issued another notice requesting the assessee to furnish further details/information in this regard on or before 04.12.2024. Since the assessee has not furnished any explanation in response to last notice dated 28.11.2024, Ld. CIT, Exemption, Pune rejected the application for registration by observing as under :- “7. Considering the above facts discussed in the show notice and discrepancies noticed and also that the assessee has not complied with the provisions of section 12AB(1)(b)(i) of the Income Tax Act, 1961 as well as the provisions of Rule 17A(2) of Income Tax Rules, 1962 in spite giving sufficient opportunities, the undersigned is unable to draw any satisfactory conclusion about the genuineness of activities of the assessee and compliance of requirements of any other law for the time being in force by the assessee as are material for the purpose of achieving its objects.
8. In view of the above, the application filed by the assessee is hereby rejected and the provisional registration granted on 28/03/2023 under section 12AB read with section 12A(1)(ac) (vi) of the Income Tax Act, 1961 is hereby cancelled.”
It is the above order against which the assessee is in appeal before this Tribunal.
Ld. AR appearing from the side of the assessee submitted before us that Ld. CIT, Exemption, Pune has not provided proper opportunity to the assessee and, therefore, the impugned order of Ld. CIT, Exemption, Pune is not justified. It was submitted that the last notice was issued on 28.11.2024 asking for various information and other details and the compliance was required to be made on or before 04.12.2024. It was submitted that lots of information was already furnished by the assessee and again various information was required through the above notice dated 28.11.2024 and only seven days were provided to the assessee to furnish the desired information. Accordingly, it was requested before the Bench to set-aside the impugned order passed by Ld. CIT, Exemption, Pune with a direction to provide at least one more opportunity to furnish the requisite documents/information as desired by Ld. CIT, Exemption, Pune.
6. Ld. DR appearing from the side of the Revenue relied on the order of Ld. CIT, Exemption, Pune and requested to confirm the same.
We have heard Ld. Counsels from both the sides and perused the material available on record. We find that admittedly the assessee made compliance to the initial notices issued by the Ld. CIT, Exemption, Pune. It is the sole contention of the assessee that one more opportunity may kindly be provided to furnish reply before Ld. CIT, Exemption, Pune. In this regard, it was also contended before the Bench that somehow the notice was missed & the reply could not be filed by the assessee & in such kind of situation, Ld. CIT, Exemption, Pune ought to have provided at-least one more opportunity to the assessee to substantiate his case. Considering the totality of the facts of the case, & also in the interest of justice and without going into merits of the case, we set-aside the order passed by Ld. CIT, Exemption, Pune and remand the matter back to him with a direction to decide the application for registration afresh as per fact and law after providing reasonable opportunity of hearing to the assessee. The assessee is also hereby directed to comply with the notices issued by Ld. CIT, Exemption, Pune and produce requisite documents/information/ submissions in