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Facts
The assessee, Sant Shri Aasaramji Aashram Trust, challenged the CIT(E)'s rejection of its application for provisional registration under Section 12AB of the Income Tax Act. The rejection was based on the trust's religious objectives not qualifying as charitable, and alleged non-compliance with laws, without providing sufficient opportunity of hearing.
Held
The Tribunal observed that the assessee was not given a fair opportunity to present its case or make necessary submissions. Therefore, in the interest of justice, the matter was remitted back to the file of the CIT(E) for fresh adjudication after granting the assessee a fair hearing.
Key Issues
Whether the CIT(E) validly rejected the application for provisional registration under Section 12AB without providing adequate opportunity of hearing, and whether the trust's activities qualify as charitable as per the Act.
Sections Cited
12AB, 12A(1)(ac)(iii)
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Income Tax Appellate Tribunal, A BENCH, PUNE
Before: Dr. MANISH BORAD & SHRI VINAY BHAMORE
ORDER PER Dr. Manish Borad, AM :- This appeal at the instance of the assessee is directed against the order of the Ld. CIT(E) u/s 12 AB(1)(b)(ii) of the Act dated 20/09/2023. 2. Assessee has raised following Grounds of the Appeal :-
1. The learned Commissioner of Income Tax (Exemption) erred in issuing an order under section 12A(1)(ac)(iii) rejecting the application filed in Form 10AB, contending that the trust's objectives are of a religious nature and do not qualify as charitable and activities and non-compliance with applicable laws for the time being in force, which is legally untenable.
2. The appellant respectfully prays for the following relief: i) The order of the learned Commissioner of Income Tax (Exemption) be annulled, and the matter be remitted to the Income Tax Appellate Tribunal (ITAT) to afford the appellant an opportunity for a fresh hearing on the objectives of the trust, aiming to ascertain the charitable nature of its activities and compliance of laws for the time being in force and subsequently, grant regular registration under section 12AB of the Income Tax Act. ii) Any other remedy that this esteemed tribunal deems appropriate.
3. The appellant requests permission to supplement, modify, amend, or withdraw any of the grounds of appeal before the commencement of the hearing.”
3. At the outset Ld. counsel of the assessee referring to Para 7 of the impugned order submitted that Ld. CIT(E) has rejected the provisional registration granted to assessee u/s 12AB of the Act dated 27/05/2021 solely on the ground that the assessee trust has failed to prove the charitable nature and genuineness of the activities and compliance requirements of any other law for time being in force by the trust/institution as are material for the purpose of achieving its objectives. He further submits that proper opportunity of hearing was not granted and just after giving two opportunities when assessee made submission seeking more time to file the details the same was not granted and application was rejected. He just prayed for grant of one more opportunity for hearing before Ld. CIT(E).
4. Ld. DR on the other hand supported the order of Ld. CIT(E).
We have heard rival contentions and perused the records placed before us. We notice that assessee’s application on Form 10AB dated 30/03/2023 has been rejected solely on the ground of assessee having failed to prove the correctness and genuineness of charitable activities carried on by it. We notice that fair opportunity has not been granted to the assessee to make necessary submissions in support of its application dated 30/03/2023. We therefore in the interest of justice and being fair to both the parties remit the issue on merit raised in the instant appeal to the file of Ld.CIT(E) for afresh adjudication to be carried out after giving fair opportunity of hearing to the assessee and decide in accordance with law. Assessee is also directed to make necessary compliance at the earliest.
In the result appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 29.01.2025 Sd/- Sd/- (VINAY BHAMORE) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER 2 Pune, Dated 29th January, 2025. Copy to :-