CREATIVE FOUNDATION,NANDURBAR vs. COMMISSIONER OF INCOME TAX CIT EXEMPTION, PUNE

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ITA 901/PUN/2024Status: DisposedITAT Pune18 February 2025AY 2022-23Bench: SHRI R. K. PANDA (Vice President), SHRI VINAY BHAMORE (Judicial Member)1 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal noted that the assessee had complied with initial 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.

What were the facts?

The assessee filed an application for registration under section 12AA of the IT Act. The CIT rejected the application citing non-compliance with notices and discrepancies in verifying the genuineness of activities. The assessee argued that the CIT did not provide adequate opportunity and that a short notice period prevented full compliance.

What were the issues?

Whether the CIT properly afforded opportunity to the assessee before rejecting the registration application, and whether the matter should be remanded for fresh consideration.

Which sections of the Income-tax Act were involved?

Section 12AA,Section 12(1)(ac),Section 12AB(1)(b)(i),Section 17A(2),Section 12AB,Section 12A(1)(ac)(vi)

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

For Appellant: Shri Sharad A. Shah
For Respondent: Shri Amol Khairnar
Hearing: 12.02.2025Pronounced: 18.02.2025

Creative Foundation, Vs. CIT, Exemption, Pune. C/o Krishna Hospital, Krushnakunj Colony, Dongargaon Road, Shahada- 424409 PAN : AABTC9231C Appellant Respondent Assessee by Shri Sharad A. Shah : Revenue by : Shri Amol Khairnar Date of hearing : 12.02.2025 Date of pronouncement : 18.02.2025 आदेश / ORDER

PER VINAY BHAMORE, JM:

1.

This appeal filed by the assessee is directed against the order dated 18.03.2024 passed by Ld. CIT, Exemption, Pune rejecting the application for registration u/s 12AA of the IT Act.

2.

Facts of the case, in brief, are that the assessee filed application for registration in Form No.10AB under clause (iii) of section 12(1)(ac) of the IT Act on 05.09.2023. 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 06.11.2023 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 on 08.03.2024 requesting the assessee to furnish further details/information in this regard on or before 15-03-2024. Since the assessee has not complied with the notice dated 08.03.2024, Ld. CIT, Exemption, Pune rejected the application for registration by observing as under :- “3. 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.

4. 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.

5. In view of the above, the application filed by the assessee is hereby rejected and the provisional registration granted on 24/09/2021 under section 12AB read with section 12A(1)(ac)(vi) of the Income Tax Act, 1961 is hereby cancelled.”

3. It is the above order against which the assessee is in appeal before this Tribunal.

4.

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 08.03.2024 asking for various information and other details and the compliance was required to be made on or before 15.03.2024. It was submitted that lots of information was already furnished by the assessee and again various information was required through the above notice dated 08.03.2024 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.

5.

Ld. DR appearing from the side of the assessee relied on the order of Ld. CIT, Exemption, Pune and requested to confirm the same.

6. 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 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,

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