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Facts
The assessee, Shri Datta Maharaj Temple, filed an application for registration under section 12A(1)(ac)(iii) of the Income Tax Act. The Commissioner of Income Tax (Exemption) rejected the application after the assessee failed to provide explanations for discrepancies noticed in response to two notices, and also noted a prior rejection and cancellation of provisional registration.
Held
The Tribunal restored the matter to the file of the CIT(E) with a direction to grant one final opportunity to the assessee to substantiate its case. The assessee was directed to submit details and clarifications without seeking any adjournment.
Key Issues
Whether the CIT(E) was justified in rejecting the registration application without granting adequate opportunity to the assessee to explain the discrepancies, and whether a final opportunity should be granted.
Sections Cited
12A(1)(ac)(iii), 12AB
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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 06.09.2024 of the Ld. Commissioner of Income Tax (Exemption), Pune [“CIT(E)”] whereby he rejected the application of the assessee filed before him on 25.03.2024 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. On the facts and circumstances of the case and in law the Ld. CIT erred in not granting registration u/s 12AC on paltry grounds in spite of the fact that: a. The appellant trust is exclusively engaged in religious activities and b. The appellant having submitted most of the documents as called for by the Ld. CIT in this respect. The appellant craves leave to add to, amend, alter, delete or modify all or any of the above ground of appeal or raise a new ground of appeal before or at the time of hearing.”
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 18.05.2024, which was duly served via e-portal and email, requesting the assessee to upload certain information/clarification by 03.06.2024. 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 20.08.2024 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 27.08.2024. 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. Without prejudice to the above, the Ld. CIT(E) further observed that record reveals that the assessee’s previous application under section 12A(1)(ac)(iii) of the Act has been rejection and its provisional registration dated 05.04.2023 has already been cancelled vide his office order 12.10.2023. Therefore, the assessee does not have a valid copy of order of provisional approval u/s 12AB of the Act. He, thus, rejected the application for registration filed by the assessee.
Aggrieved, the assessee is in appeal before the Tribunal and all the grounds of appeal relate thereto.
The Ld. AR submitted that the initial notice issued by the Ld. CIT(E) was compiled by the assessee by filing most of the documents as called for by the Ld. CIT(E). It is only the subsequent notice listing out the discrepancies could that remained un-complied with by the assessee. The Ld. AR submitted that assessee has a strong case on merits of registration and given an opportunity the assessee’s case can be explained to the satisfaction of the Ld. CIT(E) by filing the required details / documents and clarifying the discrepancies noticed by him. The Ld. AR therefore prayed that the matter be set aside to Ld. CIT(E) for fresh consideration of assessee’s application for regular registration and restoring the provisional registration granted earlier.
The Ld. DR had no objection to the above request of the Ld. AR.
We have heard the Ld. Representatives of the parties and perused the material available on record. We observe that the Ld. CIT(E) has rejected the application of the assessee for want of any explanation offered by the assessee to the discrepancies noticed by him. Only two notices were issued by the Ld. CIT(E) out of which one remained un-complied by the assessee. Before us, the Ld. AR has pleaded for one more opportunity to explain its case before the Ld. CIT(A). 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 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.
Sd/- Sd/- (R.K. Panda) (Astha Chandra) VICE PRESIDENT JUDICIAL MEMBER पुणे / Pune; िदनांक / Dated : 25th February, 2025. आदेश की �ितिलिप अ�ेिषत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��थ� / The Respondent. 2. 3. The Pr. CIT concerned. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, “ए” ब�च, 4. पुणे / DR, ITAT, “A” Bench, Pune. गाड� फ़ाइल / Guard File. 5. आदेशानुसार / BY ORDER, //स�ािपत �ित// True Copy//
व�र� िनजी सिचव / Sr. Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune