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Facts
The appellant, Momin Samaj Federation, a charitable trust, applied for registration under Section 12A of the Income Tax Act, 1961. The CIT(E) rejected the application for failure to provide documentary evidence and also cancelled the provisional registration. The appeal was filed belatedly due to the trust not monitoring its email.
Held
The Tribunal noted that the appellant failed to respond to the show cause notice without a genuine reason. The appeal was partly allowed for statistical purposes, with a direction for the appellant to pay costs and for the matter to be remanded to the CIT(E) for fresh adjudication after giving the appellant an opportunity of hearing.
Key Issues
Whether the CIT(E) erred in rejecting the application for registration under Section 12A without adequate opportunity or proper verification, and whether the delay in filing the appeal is condonable.
Sections Cited
12A, 12A(1)(ac)(iii), 17A(2)
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Income Tax Appellate Tribunal, AHMEDABAD “C” BENCH
Before: Ms. Suchitra Kamble & Shri Makarand V. Mahadeokar
आदेश/ORDER Per Suchitra Kamble, Judicial Member:
This is an appeal filed against the order dated 13-11- 2024 passed by CIT(Exemption), Ahmedabad.
The grounds of appeal are as under:- “Based on the facts and circumstances of the case, the grounds of appeal of the appellant are as follows:
1. 1. Learned CIT(Exemption) has erred in rejecting the application made under section 12A(1)(ac)(iii) of the Income Tax Act, 1961 in an arbitrary manner.
2. The Learned CIT(Exemption) erred in rejecting the application filed in Form 10AB without recording any finding on the genuineness of the appellant's activities Momin Samaj Federation or considering the documents already submitted with the application.
Learned CIT(Exemption) has erred in not providing sufficient opportunity for the appellant to explain and submit the documentary evidence.
The appellant craves leave to add, alter, vary, omit, amend, or delete the above grounds of appeal at any time before, or at the time of, hearing of the appeal, so as to enable the Hon'ble Income-tax Appellate Tribunal (Appeals) to decide this appeal according to law.”
3. The applicant/appellant Momin Samaj Federation, is a charitable trust engaged in activities for the welfare of the public. The trust applied for registration under Section 12A of the Income Tax Act, 1961 by filing Form 10AB under sub-clause (iii) of clause (ac) of sub-Section (1) of Section 12A. The application was considered by the CIT(E), Ahmedabad and notices were issued on 27.08.2024 and 16.10.2024, seeking documentary evidence to substantiate the genuineness of activities. Due to certain in advertent circumstances, the applicant/appellant could not furnish the required documents within the stipulated time, nor was an adjournment sought. The applicant/appellant filed an application in Form 10AB along with all requisite documents in support of its claim. No separate reply was filed in response to the Show Cause Notice, as all relevant documents had already been submitted at the time of application. The CIT(E) rejected the application without examining the material on record and has not recorded any finding on the genuineness of the activities. The CIT(E) in the absence of the required documents, rejected the application for registration under Section 12A and also cancelled the provisional registration granted earlier.
Momin Samaj Federation 4. Being aggrieved by the rejection order dated 13.11.2024 passed by the CIT(E), the present appeal filed by the applicant/appellant belatedly for 150 days. But the reason given in the affidavit is that the trust did not regularly monitor the email ID, which led to an oversight of the communication received from the department. Thus, the delay on this reason is condoned.
The Ld. AR submitted that the failure to file documents was neither willful no intentional but occurred due to unavoidable circumstances. The Ld. AR further submitted that the rejection order dated 13.11.2024 primarily states that the applicant/appellant failed to comply with Rule 17A(2) of the Income Tax Rules, 1962 and did not furnish documentary evidence to establish: * The genuineness of activities of the trust * Whether the activities were in consonance with the objects of the trust * Compliance with other laws relevant for achieving the objectives of the trust. Thus, the Ld. AR submitted that the matter may be remanded back to the file of the CIT(E) for allowing the applicant/appellant to place on records the relevant the details and the CIT(E) should hear the applicant/appellant on merit as well as adjudicate the application as per law.
The Ld. DR vehemently oppose the ld. AR and relied upon the order of the CIT(E) stating that the applicant/appellant was given ample opportunity.
Momin Samaj Federation 7. We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the applicant/appellant despite knowing about the show cause notice issued by the CIT(E), has not responded the same without any genuine reason. Therefore, it will be appropriate to direct the applicant/appellant to pay cost of Rs.5000/- to Prime Minister’s Welfare Fund within two weeks from the receipt of this order. The matter is remanded back to the file of the CIT(E) for proper verification of the details filed by the applicant / appellant and adjudicate the same as per Income Tax Act. Needless to say, the applicant/appellant be given opportunity of hearing by following principles of natural justice. The appeal of the applicant/appellant is partly allowed for statistical purpose.
In result, appeal of the applicant/appellant is partly allowed for statistical purpose.
Order pronounced in the open court on 16-10-2025 Sd/- Sd/- (Makarand V. Mahadeokar) (Suchitra Kamble) Accountant Member Judicial Member Ahmedabad : Dated 16/10/2025 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से,
उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद