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Facts
The assessee's application for registration under Section 12A(1)(ac) was rejected by the CIT(E) for failure to provide satisfactory details and compliance. The CIT(E) had issued a show cause notice due to discrepancies, but the assessee did not respond adequately.
Held
The Tribunal restored the matter to the CIT(E) to grant one final opportunity to the assessee to present its case, allowing the appeal for statistical purposes.
Key Issues
Whether the CIT(E) erred in rejecting the registration application without providing sufficient opportunity, and whether the assessee's non-compliance was intentional.
Sections Cited
12A(1)(ac), 12AA, 12AB
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH, PUNE
Before: SHRI R.K. PANDA & MS. ASTHA CHANDRA
The appeal filed by the assessee is directed against the order dated 14.09.2023 of the Ld. Commissioner of Income Tax (Exemption), Pune [“CIT(E)”] whereby he rejected the application of the assessee filed before him on 31.03.2023 in Form No. 10AB under clause (iii) of section 12A(1)(ac) of the Income Tax Act, 1961 (the “Act”).
The assessee has raised the following grounds of appeal :- “1. The learned CIT (Exemption) Pune erred in law and on facts in not granting registration u/s 12AA of ITA, 1961.
2. The learned CIT (Exemption) Pune erred in law and on facts in not granting sufficient opportunity to the appellant to submit the details/information.
3. The learned CIT (Exemption) Pune ought to have appreciated the facts that the appellant has submitted all the relevant documents/information as sought for from time to time by uploading the same on the portal the documents/information.
4. The appellant craves leave to add, alter, clarify, explain, modify, delete any of the grounds of appeal, and to seek any just and fair relief.”
3. Briefly stated, the facts of the case are that on perusal of the assessee’s application for registration along with annexures thereto, with a view to verify the genuineness of activities of the assessee trust 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, the Ld. CIT(E) issued a notice through ITBA portal on 16.06.2023, which was duly served via e-portal and email, requesting the assessee to upload certain information/clarification by 03.07.2023. In response thereto, the assessee filed the requisite details / information. On verification of the same, the Ld. CIT(E) noticed various discrepancies which were communicated to the assessee vide notice dated 06.09.2023 asking the assessee to show cause as to why the application for regular registration should not be rejected and why the provisional registration granted to the assessee should not be cancelled. The said show cause notice was duly served upon the assessee through e-portal and email and the compliance was sought by 11.09.2023. However, the assessee neither submitted any explanation nor availed the opportunity of hearing granted by the Ld. CIT(E). In the absence of any explanation to the discrepancies communicated to the assessee, the Ld. CIT(E) presumed that the assessee has nothing to say in the matter. In this view of the matter, the Ld. CIT(E) observed that he is unable to draw any satisfactory conclusion about the genuineness of the activities of the assessee trust and the 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. He, therefore, by this impugned order rejected the application for registration filed by the assessee and also cancelled the provisional registration granted on 23.09.2021 u/s 12AB r.w.s. 12A(1)(ac)(vi) of the Act.
Aggrieved, the assessee is in appeal before the Tribunal and all the grounds of appeal relate thereto.
The Ld. AR submitted that non-compliance to the show cause notice issued on 06.09.2023 was not intentional. The assessee had bona-fide reasons for the same. Referring to the Affidavit of the trustee of the assessee trust, placed on pages 128-129 of the Paper Book, the Ld. AR submitted that the assessee received the said notice on 06.09.2023 via email at 7:30 pm, however, the assessee checked the email only on 08.09.2023 which was a Friday. It therefore took 2-3 days extra for the assessee to compile the requisite information/ details. By 14.09.2023 the assessee was ready with its response but the same could not uploaded as the tab for submission was closed and the same day the Ld. CIT(E) passed the impugned order. He therefore submitted that the assessee was not provided with the adequate opportunity of hearing by the Ld. CIT(E). He submitted that the assessee is in a position to substantiate its case by filing all the requite information / details/ clarification/ documents before the Ld. CIT(E) and requested that the matter may be restored to his file for fresh adjudication on merits.
The Ld. DR, on the other hand, supported the order of the Ld. CIT(E) and submitted that the Ld. CIT(E) gave sufficient opportunities of hearing to the assessee vide notice dated 16.06.2023 and 06.09.2023 and therefore the Ld. CIT(E) was completely justified in rejecting the application of the assessee for registration and also cancelling the provisional registration granted earlier.
We have heard the Ld. Representative of the parties and perused the material available on record. We observe that the assessee duly filed/ uploaded the requisite information/ details / documents as required by the Ld. CIT(E) vide his very initial notice dated 16.06.20232. It is only the subsequent notice issued on 06.09.2023 listing out certain discrepancies therein (para 2.2 of the impugned order refers) that could not be complied with for the above reasons stated by the trustee in his affidavit filed before us. Consequently, in the absence of any explanation / clarification offered by the assessee, the Ld. CIT(E) could not draw any satisfactory conclusion about the genuineness of the activities of the assessee trust and proceeded to pass the impugned order rejecting the application for regular registration and also cancelling the provisional registration granted to the assessee on 23.09.2021. Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the matter to the file of the Ld. CIT(E) with a direction to grant one final opportunity to the assessee to substantiate its case before him by filing all the requisite details and decide the issue as per fact and law after giving due opportunity of being heard to the assessee. The assessee is also hereby directed to make its submissions before the Ld. CIT(E) on the appointed date without seeking any adjournment under any pretext, failing which the Ld. CIT(E) shall be 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.
In the result, the appeal of assessee is treated as allowed for statistical purposes.
Order pronounced in the open court on 25th February, 2025.