LATE. MAMASAHEB MOHOL VIDYA VIKAS MANDAL,PUNEQ vs. CIT EXEMPTION, PUNE

This appeal filed by the assessee is directed against the order dated 27.03.2024 passed by Ld. CIT, Exemption, Pune rejecting the application for registration u/s 12AB of the IT Act.

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 29.09.2023. 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 29.11.2023 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 06.02.2024. Not being satisfied with the reply of the assessee, Ld. CIT, Exemption, Pune rejected the application for registration by observing as under :- “6. The assessee responded to the said notice on 24/02/2024 and 13/03/2024. The assessee has not furnished any written submission on the issues raised in the show cause notice. It has, instead, referred to the earlier notice dt. 29/11/2023 and has made some compliance in connection with said notice. Vide show cause notice dt. 30/10/2024, the assessee was requested to explain nature and purpose of the loans raised and its utilisation for trust objects along with copy of permission under section 36A of the Maharashtra Public Trust Act, 1950 from the Charity Commissioner. The assessee, however, has not offered any clarification on the issue. It, thus, appears that the assessee has not taken any permission as required u/s 36A of the MPT Act, 1950. Section 36A(3) of the BPT Act, 1950 provides that " no trustee shall borrow moneys (whether by way of mortgage or otherwise) for the purpose of or on behalf of the trust of which he is a trustee, except with the previous sanction of the Charity Commissioner, and subject to such conditions and limitations as may be imposed by him in the interest or protection of the trust." Thus, said provision mandates the trust to obtain previous sanction from Charity Commissioner in respect of any loan. The assessee, however, has failed to comply with the statutory requirement.

Considering the above, 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.

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 rejected the application mainly on the ground of non-furnishing of written submission on the grounds raised in the show cause notice. Ld AR further submitted that Ld. CIT, Exemption, Pune has referred SCN dated 30-10-2024, whereas no such SCN was issued on the above date instead the application itself was rejected on 27-03-2024. It was further submitted before the bench that it is true that certain information remained to be complied with, but no such notice was issued on 30-10-2024 & therefore the order passed by Ld. CIT, Exemption, Pune is bad in law wherein an irrelevant notice has been relied on for rejecting the application for registration. Accordingly, it was prayed before the Bench to set-aside the order passed by Ld. CIT, Exemption, Pune & further requested to remand the matter back to his file to decide the issue afresh after providing one more opportunity to the assessee to submit desired information before Ld. CIT, Exemption, Pune.

Ld. DR appearing from the side of the Revenue relied on the order passed by 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 Ld. CIT, Exemption, Pune has rejected the application for registration on the basis of non- submission of various information by the assessee. We also find that Ld. CIT, Exemption, Pune has wrongly referred SCN dated 30-10-2024 which does not exists, however it appears to be a simple typographical error. It was the contention of Ld. counsel of the assessee that the assessee has complied with the notices as much as possible by him & rest of the information will also be complied if one opportunity is provided to the assessee. Considering the totality of the facts of the case, & in the interest of justice, without going into merits of the case, we deem it appropriate to set-aside the order passed by Ld. CIT, Exemption, Pune & remand the matter back to him with a direction to decide the issue of registration afresh as per fact & law after providing reasonable opportunity of hearing to the assessee. The assessee is also hereby directed to comply with the