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Facts
The assessee trust applied for registration under section 12A(1)(ac)(iii) and approval under section 80G(5) of the IT Act. The CIT rejected the applications, citing non-compliance with notices and lack of sufficient opportunity for the assessee to explain discrepancies.
Held
The Tribunal found that the assessee had made compliance to initial notices but faced issues with subsequent notices. Considering the totality of facts and in the interest of justice, the Tribunal set aside the CIT's order and remanded the matter back for fresh adjudication.
Key Issues
Whether the CIT erred in rejecting the applications for registration and approval without providing adequate opportunity to the assessee to explain discrepancies and comply with notices.
Sections Cited
12A(1)(ac), 80G(5), 12AB(1)(b)(i)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE
Before: SHRI R. K. PANDA & SHRI VINAY BHAMORE
ORDER PER VINAY BHAMORE, JM: Both the above captioned appeals filed by the assessee are directed against the separate orders dated 31.08.2024 passed by Ld. CIT, Exemption, Pune rejecting the application for registration in Form No.10AB under clause (iii) of section 12A(1)(ac) of the IT Act filed on 30.03.2024 and denying the application for approval in Form No.10AB under clause (iii) of first proviso to sub-section (5) of section 80G of the IT Act filed on 31.03.2024.
& 2220/PUN/2024 : 2. The appellant has raised the following 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) 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 is a trust applied for registration in Form 10AB under clause (iii) of section 12A(1)(ac) of the IT Act on 30.03.2024. 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 dated 29.05.2024 was issued through ITBA portal requesting the assessee to upload various information detailed in notice on or before 12.06.2024. The assessee responded to the said notice on 09.07.2024. However, the same was not accessible, another notice was issued on 10.07.2024 requesting the assessee to submit the compliance in PDF format. The compliance to the said notice was due on or before 17.07.2024. The assessee complied to the said notice and furnished desired information as per required in the said notice. On verification of said information, Ld. CIT, & 2220/PUN/2024 Exemption, Pune found certain discrepancies and issued another notice on 16.08.2024 requesting the assessee to furnish further details/information in this regard on or before 23.08.2024. Since the assessee has not complied with the notice dated 16.08.2024, Ld. CIT, Exemption, Pune rejected the application for registration by observing as under :- “6. Since, the assessee has not furnished any explanation to the discrepancies communicated to it, it is presumed that the assessee has nothing to say in the matter.
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.
In view of the above, the application filed by the assessee is hereby rejected and the provisional registration granted on 04/04/2022 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 16.08.2024 asking for various & 2220/PUN/2024 information and other details and the compliance was required to be made on or before 23.08.2024. It was submitted that lots of information was already furnished by the assessee and again various information was required through the above notice dated 16.08.2024 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.
Ld. DR appearing from the side of the assessee 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 trust that one more opportunity may kindly be provided to furnish reply before Ld. CIT, Exemption, Pune. In this regard, it was contended before the Bench that somehow the notice was missed & the reply could not be filed by the assessee trust & in such kind & 2220/PUN/2024 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 support of the application for registration without taking any adjournment under any pretext, otherwise, Ld. CIT, Exemption, Pune shall be at liberty to pass appropriate order as per law. Thus, the grounds of appeal
raised by the assessee are allowed for statistical purposes.
8. In the result, the appeal filed by the assessee in is allowed for statistical purposes. ITA No.2220/PUN/2024 :
9. The instant appeal is against the order passed by Ld. CIT, Exemption, Pune denying grant of approval u/s 80G(5) of the IT Act. Since we have remanded the issue of grant of registration u/s