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Facts
The assessee, Shri Mahavir Jain Mandir, filed an application for registration under Section 12AB of the Income Tax Act, 1961. The Commissioner of Income Tax (Exemption) rejected the application citing non-submission of details and genuineness issues. The assessee appealed against this order.
Held
The Tribunal found that the assessee was not provided with sufficient opportunity to present its case. The Tribunal held that justice would be served by remanding the matter back to the CIT(E) for fresh consideration.
Key Issues
Whether the CIT(E) erred in rejecting the application for registration without providing adequate opportunity and whether the grounds for rejection were legally sustainable.
Sections Cited
12AB, 12A(1)(ac)(iii), 115TD
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Income Tax Appellate Tribunal, “B” BENCH, AHMEDABAD
Before: DR. B.R.R. KUMAR, VICE-Ms. SUCHITRA KAMBLE
IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER (Assessment Year: N.A) Shri Mahavir Jain Mandir, The Commissioner of Vs. D-112, First Floor, Income Tax(Exemption), Balaji Chambers, Ahmedabad. Himatnagar Highway, Idar, Sabarkatha-383430. [PAN :ABBTS7462 E] (Appellant) .. (Respondent) Appellant by : Shri Vivek Chavda, AR Respondent by: Shri RP Rastogi, CIT. DR Date of Hearing 08.07.2025 Date of Pronouncement 15.07.2025 O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:-
Delay Condoned This appeal has been filed by the assessee against the order passed by the Ld. Commissioner of Income Tax (Exemption), Ahmedabad, vide order dated 24.12.2024. 2. The assessee has raised the following grounds of appeals:
1.1 The learned CIT(Exemption) erred in law and on facts in rejecting the appellant's application for registration under section 12AB of the Income Tax Act, 1961 by order dtd:24.12.2024. Mahavir Jain Mandir Vs. CIT Asst. Year : N.A - 2– 1.2 The learned CIT (Exemption) erred in cancelling the provisional registration granted to the appellant under section 12AB(1) (c) without providing sufficient and reasonable opportunity to the appellant to present its case and submit additional documents. 1.3 The learned CIT (Exemption) erred in concluding that the appellant's activities are non-genuine merely because the expenses were not specifically categorized as charitable expenses in the financial statements, when: a. The trust has been actively engaged in charitable and religious activities as detailed in the activity note b. The administrative expenses incurred by the trust including salary, rent, stationery, and travel expenses were directly connected with the execution of its charitable objectives c. The trust maintains proper records of its activities which could have been verified if adequate time was provided 2.1 The learned CIT(Exemption) erred in mechanically rejecting the application without: a. Considering the overall activities and operation of the trust b. Conducting any field inquiry to verify the actual activities being carried out by the trust C Appreciating the fact that small trusts often have limited resources for maintaining sophisticated accounting systems 2.2 The learned CIT (Exemption) failed to appreciate that non- submission of additional information within the extremely short time provided (merely 4 days from 02.12.2024 to 06.12.2024) does not justify rejection of registration under section 12AB, especially when provisional registration was already granted earlier. 3.1 The learned CIT (Exemption) erred in directing computation of tax liability under section 115TD without appreciating that the activities of the trust are genuine and there was no intention of the trust to misrepresent any facts before the authorities. 3.2 Without prejudice to the above, the learned CIT (Exemption) erred in directing computation of tax liability under section 115TD without Mahavir Jain Mandir Vs. CIT Asst. Year : N.A - 3– appreciating that said provision is not applicable in case of rejection of application for registration. It is therefore prayed that the appellant may please be granted registration u/s 12AB in the interest of natural justice considering the exceptional facts of the case.
The facts of the case are that the assessee is a Trust and had applied for registration under Form No.10AB of the Act. The Ld. CIT(E) rejected the application for registration u/s.12A(1)(ac)(iii) of the I.T Act, 1961, since the assessee-trust failed to submit any details/explanation and genuineness of the activities of the Trust.
Aggrieved by the order of the Ld. CIT(E), the Assessee filed appeal before the Tribunal.
At the outset, we find that notices were issued from time to time to furnish details/documents as called for. The Ld.CIT(E) rejected the application of the assessee on the ground that that the assessee-trust has neither filed any submission nor sought any adjournment. Therefore, the Ld. Counsel prayed that given an opportunity, the same would be apprised to the Ld.CIT(E). Ld. CIT(DR) argued that the assessee-trust needs to furnish requisite details/explanations and submissions before the Ld. CIT(E). Having considered the facts on record, we hold that interests of justice would be well served by remanding the matter to the Ld.CIT(E) for consideration of the application afresh and to pass an order by taking into consideration the submissions /explanations submitted by the assessee. Mahavir Jain Mandir Vs. CIT Asst. Year : N.A - 4– 6. In the result, the appeal of the assessee is allowed for statistical purposes.