Loading judgment…
Facts
The assessee's application for registration under section 12A(1)(ac) was rejected by the CIT(E) due to non-compliance with notices, which the assessee attributed to the negligence of their consultant. The CIT(E) issued multiple notices, but the assessee failed to provide explanations or attend hearings.
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 present their case. The assessee was directed to file submissions without seeking adjournments.
Key Issues
Whether the rejection of registration application by CIT(E) was justified due to the assessee's non-compliance, and whether a final opportunity should be granted based on alleged consultant negligence.
Sections Cited
12A, 12A(1)(ac), 12AB
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “B” BENCH, PUNE
Before: SHRI R.K. PANDA & MS. ASTHA CHANDRA
Assessee by : Shri Dattatray M. Khune Department by : Shri Ajay Kumar Keshari Date of hearing : 18-02-2025 Date of 25-02-2025 Pronouncement : आदेश / ORDER
PER ASTHA CHANDRA, JM :
The appeal filed by the assessee is directed against the order dated 09.10.2024 of the Ld. Commissioner of Income Tax (Exemption), Pune [“CIT(E)”] whereby he rejected the application of the assessee filed before him on 17.04.24 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 :- “Assessee M/S Shri Samarth Shikshan Prasarak Mandal having PAN AAKTS3449K has filed application for revalidation registration in Form 10AB under clause (iii) of section 12. A(1) (ac) of Income Tax Act 1961, application no. CIT Exemption, PUNE/2024-25/12AA/12185 dated on 17.04.2024. Assessee has submitted the application no. CIT Exemption, Pune/2024- 25/12AA/12185 dated 17.04.2024 through Mr. Abhijit Kale a consultant. At the time of the application he had mentioned his personal email id i.e. kaleabhijit393@gmail.com in the income tax portal. Your Honor as per the Income Tax proceeding he should mention the official email id of assessee only.
CIT Exemption, Pune office had issued 3 notices for hearing regarding the registration or approval under section 12A of Income Tax Act 1961, dated on 06.06.2024, 02.08.2024 and 28.09.2024. All the above notices issued by CIT Exemption, Pune to email id kaleabhijit393@gmail.com which was not official 2 email id of the trust, therefor not single notice received to the institution for registration of trust under section 12A to the institution.
Due to his personal issues or unavailability of Mr. Abhijit Kale he had not communicated neither mail of CIT Exemption, Pune nor asked any documents for the proceeding. Due to negligence of Mr. Abhijit Kale a consultant it happens that the institute had not submitted the required documents in due time to CIT Exemption, Pune office.
Your Honor as per the requirement for registration under section 12A of Income Tax Act 1961 the trust have sufficient proof and documents available for eligibility for the registration under Income Tax Act but due to negligence and carelessness of consultant Mr. Abhijit Kale it happens that CIT Exemption Pune rejected our application.
Your Honor considering the actual fact and on the basis of natural justice kindly allow us to represent the case again before the CIT Exemption, Pune and one final opportunity to be given for proceedings.
Considering the actual fact we would like to pray you that 1) Restore our application CIT Exemption, PUNE/2024-25/12AA/12185 for the regular hearing and cancelled the rejection order issued by CIT, Exemption Pune office.
2) Order may issue as you think fit on the natural justice to the institution.”
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 06.06.2024, which was duly served via e-portal and email, requesting the assessee to upload certain information/clarification by 21.06.2024. The assessee failed to respond. Therefore, another notice was issued on 02.08.2024 seeking compliance by 12.08.2024. 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 28.09.2024 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 3 was duly served upon the assessee through e-portal and email and the compliance was sought by 07.10.2024. 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. He, therefore, by this impugned order rejected the application for registration filed by the assessee and also cancelled the provisional registration granted on 30.11.2022 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 all the three notices were issued by the CIT(E) E) on the email id of the consultant of the trust i.e. kaleabhijit393@gmail.com. The consultant did not inform the assessee regarding receipt of any of the notice(s) due to which the assessee trust could not file the requisite details before 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 submitted that the ample opportunities were granted by the Ld. CIT(E). However, the assessee did not avail the same. 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.
4 7. We have heard the Ld. Representative of the parties and perused the material available on record. We observe that in response to the notice issued on 02.08.2024 by the Ld. CIT(E), the assessee filed the requisite details. On verifying the same, the Ld. CIT(E) issued another notice on 28.09.2024 asking the assessee to clarify certain discrepancies listed by the Ld. CIT(E) in para 4 of the impugned order but the assessee failed to file any compliance thereto. Thus, 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. Before us, the Ld. AR has submitted that non-compliance has occurred due to negligence of the consultant of the assessee trust and the assessee has sufficient proof and documents available for establishing its eligibility for the registration. 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 / documents 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.