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Facts
The appellant, a charitable trust, applied for registration under Section 12A and approval under Section 80G. The CIT(E) issued notices for clarification, but the appellant failed to provide complete details in response to the second notice, leading to rejection. The appellant appealed this rejection.
Held
The Tribunal noted that the appellant had responded to the first notice but failed to comply with the second notice. Considering the facts and the interest of justice, the Tribunal restored the issue to the CIT(E) for a final opportunity to present details and a fresh decision.
Key Issues
Whether the CIT(E) was justified in rejecting the application for registration and approval due to non-compliance with notices, and whether a final opportunity should be granted to the assessee.
Sections Cited
12A, 80G(5), 12A(1)(ac), 12AB, 17A(2)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCHES “B”, PUNE
Before: DR.MANISH BORAD & MS. ASTHA CHANDRA
आदेश / ORDER
PER DR. MANISH BORAD, ACCOUNTANT MEMBER :
The captioned appeals at the instance of appellant are directed against the orders framed by ld. Commissioner of Income Tax (Exemption), Pune both dated 08.10.2024 denying grant of registration u/s.12A and approval u/s.80G(5) of the Income Tax Act, 1961 ( in short ‘the Act’).
ITA No.2550/PUN/2024 :
Tersely, the facts of the case are that the appellant is a Charitable Trust formed with the main object of providing education. It filed application on Form No.10AB under clause (iii) of section 12A(1)(ac) of the Act for grant of regular registration on 21.05.2024. In order to verify the genuineness of activities of the appellant, the ld. CIT (Exemption) issued a notice through ITBA portal on 24.06.2024 calling upon the appellant and 2551/PUN/2024 Y.D. Limaye Educational Trust trust to file certain information/clarification. The appellant filed the requisite details. However, the ld.CIT(E) issued another notice to the appellant on 26.09.2024 pointing out certain discrepancies (para 4 of the impugned order). There was no compliance from the side of appellant to such notice. In the circumstances, the ld.CIT(E) rejected the application filed by the appellant, thereby cancelling the provisional registration granted to it by observing as under :
“6. Since, the appellant has not furnished any explanation to the discrepancies communicated to it, it is presumed that the appellant has nothing to say in the matter.
7. Considering the above facts discussed in the show notice and discrepancies noticed and also that the appellant 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 appellant and compliance of requirements of any other law for the time being in force by the appellant as are material for the purpose of achieving its objects.
8. In view of the above, the application filed by the appellant is hereby rejected and the provisional registration granted on 28/02/2023 under section 12AB read with section 12A(1)(ac) (vi) of the Income Tax Act, 1961 is hereby cancelled.”
Aggrieved appellant is in appeal before the Tribunal in the present appeal assailing the impugned order denying grant of registration u/s.12A of the Act.
Learned Counsel for the appellant at the outset submitted that the appellant had responded to the first notice issued by the CIT(E) by filing the various details. However, the appellant could not file the requisite details in response to second notice wherein the ld.CIT(E) has pointed out certain discrepancies. He submitted that in the interest of justice the appellant should be and 2551/PUN/2024 Y.D. Limaye Educational Trust given an opportunity to substantiate its case by filing the requisite details before the ld.CIT(E).
The ld. DR on the other hand opposed the above submission made by the Ld. Counsel for the appellant and submitted that ample opportunities were granted by the ld. CIT(E) which the appellant failed to avail them, therefore, the order of the ld. CIT(E) be upheld.
We have heard both the sides and perused the record placed before us. We find the appellant in response to the first notice issued by the ld. CIT(E) has filed the requisite details. However, when the ld. CIT(E) issued another notice asking the appellant to clarify regarding certain discrepancies found in the above submissions, the appellant failed to comply to the same. It is the submission of the Ld. Counsel for the appellant that in the interest of justice, the appellant should be given an opportunity to substantiate its case by filing the requisite details to the satisfaction of ld. CIT(E). Considering the totality of the facts of the case, the submissions made by ld. Counsel for the appellant and in the interest of justice, we deem it proper to restore the issue to the file of the ld. CIT(E) with a direction to grant one final opportunity to the appellant to substantiate its case by filing requisite details and decide the issue as per fact and law after giving due opportunity of being heard to the appellant. The appellant is also hereby directed to make its submissions, if any, before the ld. CIT(E) on the appointed date without seeking any adjournment under any pretext, failing which the ld. CIT(E) is at liberty to pass appropriate order as per law. We hold and direct accordingly. The grounds raised by the appellant are accordingly allowed for statistical purposes. and 2551/PUN/2024 Y.D. Limaye Educational Trust :
We have remanded the issue of grant of registration to the file of ld.CIT(E) for denovo adjudication. Therefore, in the interest of justice, it would be appropriate to remit the issue of grant of approval u/s.80G(5) as well to the file of ld.CIT(E), being consequential, for denovo adjudication.
In the result, both the appeals of the appellant are allowed for statistical purposes.
Order pronounced on this 13th day of February, 2025.