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Facts
The assessee, Siyaram Foundation, filed applications for registration under Section 12A(1)(ac)(iii) and approval under Section 80G(5) of the Income Tax Act, 1961. The CIT(E) rejected both applications due to the assessee's non-compliance with notices seeking details and documents, despite the assessee claiming unawareness of email communications and engagement in a major charitable event.
Held
The tribunal, while not fully accepting the assessee's non-compliance explanation, found that the CIT(E) rejected the applications without granting a fair opportunity. Therefore, the tribunal imposed a cost of Rs. 5,000 on the assessee, payable to the Prime Minister's National Relief Fund. Upon proof of payment, the CIT(E) is directed to provide another opportunity to the assessee to submit required documents and reconsider both applications, with the assessee directed not to seek further adjournments.
Key Issues
Whether the CIT(E) erred in rejecting the applications for registration under Section 12A and approval under Section 80G(5) without affording a fair and reasonable opportunity to the assessee.
Sections Cited
12A, 12A(1)(ac)(iii), 80G(5), 80G(5)(iii)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AHMEDABAD “C” BENCH, AHMEDABAD
Before: MS. SUCHITRA KAMBLE & SHRI NARENDRA PRASAD SINHA
O R D E R PER SHRI NARENDRA PRASAD SINHA, AM: These two appeals are filed by the assessee against the orders of Commissioner of Income Tax (Exemption), Ahmedabad, (in short ‘the CIT(E)’), both dated 28.02.2025, in respect of rejection of registration under Section 12A and rejection of approval under Section 80G(5) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) respectively. As the facts of the two appeals are identical, both the matters were heard together and are being disposed of vide this common order.
The brief facts of the case are that the assessee had filed an application in Form No.10AB for registration of the trust under Section 12A(1)(ac)(iii) of the Act. In response thereto, the Ld. CIT(E) had called & 880/Ahd/2025 Siyaram Foundation vs. CIT(E) Page 2 of 6 for certain details/documents vide notices dated 17.01.2025 and 04.02.2025, which were not complied by the assessee. The assessee neither filed any submission nor sought any adjournment. Therefore, the Ld. CIT(E) rejected the application for registration under Section 12A(1)(ac) of the Act for the reason that he was not satisfied about the genuineness of the activities of the trust and also about whether the activities of the trust were in consonance with the objects of the trust. Accordingly, the Ld. CIT(E) had rejected the application and also cancelled the provisional registration granted earlier.
2.1 The assessee had also filed a separate application for approval of the trust under Section 80G(5)(iii) of the Act. The Ld. CIT(E) had called for certain details/documents vide notices dated 22.01.2025 and 10.02.2025, which were not complied by the assessee. Therefore, the application filed by the assessee for approval under Section 80G(5) of the Act was also rejected.
Aggrieved with the orders of the Ld. CIT(E), the assessee is in appeal before us. The following grounds have been taken by the assessee in the two appeals: -
1. Violation of Principles of Natural Justice 1.1 The CIT (Exemptions) erred in rejecting the application for registration under Section 12A without granting a fair and reasonable opportunity to the appellant to present its case.
1.2 The appellant did not respond to the notices issued via email as it was unaware of them. Due to technical reasons or oversight, the trustees did not notice the email communications. 1.3 The appellant was engaged in a major charitable event (Samuh Lagan) during the relevant period and for preparation of same trustees were engaged 45 days before date of events and after & 880/Ahd/2025 Siyaram Foundation vs. CIT(E) Page 3 of 6 10 days of events for wrap up of such events and was therefore unable to check and respond to the notices in a timely manner.
2. Erroneous Conclusion on Genuineness of Activities 2.1 The CIT (Exemptions) has wrongly held that the appellant has not established the genuineness of its activities. 2.2. The appellant is engaged in bona fide charitable activities and has substantial evidence to prove its work, which was not considered due to the premature rejection of the application.
3. Request for One More Opportunity to Submit Documents 3.1 The appellant prays that, considering the genuine reasons for non-compliance, the Hon'ble ITAT may remand the matter back to the CIT (Exemptions) with directions to grant a fresh opportunity to submit the required documents. 3.2 The appellant is fully prepared to submit all necessary documents to demonstrate compliance with Section 12A and prove the genuineness of its activities. Prayer In light of the above grounds, the appellant prays that: The order of the CIT (Exemptions), Ahmedabad dated 28/02/2025 be set aside. The appellant's application for registration under Section 12A be restored and reconsidered after affording an opportunity to submit the necessary documents. Any other relief that the Hon'ble ITAT may deem fit in the interest of justice. The appellant craves leave to amend, alter, or add further grounds of appeal, if required, at the time of hearing.”
“1. Violation of Principles of Natural Justice 1.1 The CIT (Exemptions) erred in rejecting the application for registration under Section 80G(5) without granting a fair and reasonable opportunity to the appellant to present its case. 1.2 The appellant did not respond to the notices issued via email as it was unaware of them. Due to technical reasons or oversight, the trustees did not notice the email communications.
& 880/Ahd/2025 Siyaram Foundation vs. CIT(E) Page 4 of 6 1.3 The appellant was engaged in a major charitable event (Samuh Lagan) during the relevant period and for preparation of same trustees were engaged 45 days before date of events and after 10 days of events for wrap up of such events and was therefore unable to check and respond to the notices in a timely manner.
2. Erroneous Conclusion on Genuineness of Activities 2.1 The CIT (Exemptions) has wrongly held that the appellant has not established the genuineness of its activities. 2.2 The appellant is engaged in bona fide charitable activities and has substantial evidence to prove its work, which was not considered due to the premature rejection of the application.
3. Request for One More Opportunity to Submit Documents 3.1 The appellant prays that, considering the genuine reasons for non-compliance, the Hon'ble ITAT may remand the matter back to the CIT (Exemptions) with directions to grant a fresh opportunity to submit the required documents. 3.2 The appellant is fully prepared to submit all necessary documents to demonstrate compliance with Section 80G(5) and prove the genuineness of its activities. Prayer In light of the above grounds, the appellant prays that: The order of the CIT (Exemptions), Ahmedabad dated 28/02/2025 be set aside. The appellant's application for registration under Section 80G(5) be restored and reconsidered after affording an opportunity to submit the necessary documents. Any other relief that the Hon'ble ITAT may deem fit in the interest of justice. The appellant craves leave to amend, alter, or add further grounds of appeal, if required, at the time of hearing.”
4. Shri Girish Gore, Ld. AR of the assessee submitted that the Ld. CIT(E) had issued notices via e-mail seeking additional documents for verification. However, the assessee was unaware of the email communications and no compliance could be made for this reason. He further submitted that the trustees were engaged in major charitable event & 880/Ahd/2025 Siyaram Foundation vs. CIT(E) Page 5 of 6 during the period when notices were sent by the Ld. CIT(E), which also contributed to the non-compliance. The Ld. AR further submitted that the applications were rejected by the Ld. CIT(E) without allowing sufficient opportunity of being heard. He explained that the objective as well as the activities carried out by the assessee trust were for the benefit of general public and charitable in nature and, therefore, he requested that another opportunity may be allowed to the assessee to furnish the required documents, by setting aside the matter to the file of the Ld. CIT(E). The assessee also filed a paper-book containing details of the documents as required by the Ld. CIT(E) in the course of the proceedings.
Per contra, the Ld. Sr. DR supported the orders of the Ld. CIT(E). However, he had no objection if the matters were set aside to the file of the Ld. CIT(E) for allowing another opportunity to the assessee.
We have considered the submissions of the assessee. We are not convinced with the explanation of the assessee for non-compliance before the Ld. CIT(E). When the assessee had e-filed the applications, it cannot take a plea that it was unaware of the notices received through e-mails. Even if the assessee was busy in the charitable events, nothing prevented it to seek adjournment for compliance to the requirements of Ld. CIT(E). We, therefore, deem it proper to impose a cost of Rs.5,000/- (Rupees Five Thousand only) on the assessee which should be paid to the Prime Minister’s National Relief Fund within a period of 15 days from the date of receipt of this order. On production of receipt of the remittance of the above cost, the Ld. CIT(E) is directed to provide one more opportunity to the assessee to submit the required documents and details and, thereafter, re-consider the application of the assessee for registration under Section 12A(1)(ac)(iii) of the Act. The matter & 880/Ahd/2025 Siyaram Foundation vs. CIT(E) Page 6 of 6 regarding approval under Section 80G(5) of the Act is also set aside which should be adjudicated by the Ld. CIT(E) after deciding the matter of registration under Section 12A of the Act. At the same time, the assessee is also directed to make compliance before the Ld. CIT(E) in the course of set aside proceedings and not to seek adjournment without any pressing reason.
In the result, both the appeals filed by the assessee are allowed for statistical purpose.
Order pronounced in the open Court on this 19th June, 2025.