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Facts
The assessee, a charitable trust, filed an application for registration under Section 12A(1)(ac)(iii) of the Income Tax Act. The CIT(E) denied registration citing non-satisfaction about the genuineness of the trust's activities and non-compliance with hearing notices. The assessee's appeal was delayed by 10 days.
Held
The Tribunal condoned the delay in filing the appeal. While acknowledging the assessee's non-compliance, the Tribunal directed the CIT(E) to grant one more opportunity for hearing, subject to the assessee paying a cost of Rs. 5,000/-. The assessee was also directed to appear without seeking unnecessary adjournments.
Key Issues
Whether the CIT(E) erred in denying registration without proper inquiry and opportunity, and if the delay in filing the appeal should be condoned.
Sections Cited
12A(1)(ac)(iii), 11AA, 12A
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Income Tax Appellate Tribunal, AHMEDABAD “C” BENCH
Before: Ms. Suchitra Kamble & Shri Narendra Prasad Sinha
आदेश/ORDER Per: Narendra Prasad Sinha, Accountant Member: -
This appeal is filed by the Assessee against the order dated 21.11.2024 passed by the Commissioner of Income Tax (Exemption), (in short ‘the CIT(E)’) Ahmedabad denying registration under section 12A(1)(ac)(iii) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).
Page No 2 Wonderful Education & Charitable Trust vs. CIT(E)
There was a delay of 10 days in filing of this appeal. The assessee has filed an affidavit explaining the reason for delay. It is submitted that the delay was due to late communication from the CA who was handling the matter before the CIT(E). It was submitted by the Ld. AR that due to non-compliance by the CA the application was also rejected by the Ld. CIT(E). Further that the trustees were not conversant with the Income Tax proceedings and had never faced any such litigation in past. Considering the explanation of the assessee, the delay in filing the appeal is condoned.
The assessee has taken the following grounds in this appeal:
“1. The order passed u/s. 11AA r.w.r 2C by LD. CIT(E), Ahmedabad cancelling the approval u/s. 12A is wholly illegal, unlawful and against the principles of the natural justice.
2. The Ld. CIT(E), has grievously erred in law or facts in not considering the documents filed by the Appellant along with the application in FORM 10AB.
3. The Ld. CIT(E) has grievously erred in law and on facts in not carrying out any inquiry with regard to the applicability of the provisions of Income tax Act and thereby violated the principles of natural justice. Therefore, the appellant shall be granted opportunity to produce additional evidences.
4. The Ld. CIT(E) has grievously erred in law and or on facts in not granting proper and reasonable opportunity of being heard.
It is therefore prayed that the order of cancellation of approval granted u/s. 12A of the Act be quashed in the interest of the natural justice.”
Page No 3 Wonderful Education & Charitable Trust vs. CIT(E)
Brief facts of the case is that the assessee is a charitable Trust and had filed registration application u/s 12A(1)(ac)(iii) of the Act in Form 10AB along with supporting documents on 21.03.2022. The Ld. CIT(E) had issued hearing notice on 07/09/2024 and on 25/10/2024 via email to furnish certain details/documents for granting registration. The assessee neither filed any submissions nor sought for any adjournment. Therefore, Ld. CIT(E) denied registration u/s. 12A of the Act, as he was not satisfied about genuineness of the activities of the trust and that the activities of the trust were in consonance with the objects of the trust. Further, the provisional registration granted earlier was also cancelled.
Sh. Mehul K Patel, the Ld. AR of the assessee submitted that the assessee trust was registered on 19/02/2009 and was engaged in the work of education and charitable activities for the benefit of all the people without any discrimination as to caste, creed etc. He further submitted that some of the details were already filed with the application for registration and that the Ld. CIT(E) was not correct in rejecting the application without considering the materials already available on record. The Ld. AR further submitted that the assessee was in the process of gathering the other details but the application was rejected before those details could be collected and produced before the Ld. CIT(E). He, therefore, requested to set aside the matter back to the file of Ld. CIT(E) for allowing another opportunity to the assessee to produce the documents as required.
Page No 4 Wonderful Education & Charitable Trust vs. CIT(E)
Per contra, the Ld. CIT-DR supported the order of the Ld. CIT(E). He, however, had no objection if the matter was set aside to 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 the non- compliance before the Ld. CIT(E). No cogent explanation has been given for non-compliance before the Ld. CIT(E). The assessee had neither complied to the requirements of the Ld. CIT(E) nor sought any adjournment. Therefore, we deem it proper to impost a cost of Rs. 5,000/- on the assessee, payable to the Prime Minister National Relief Fund within two weeks from the date of receipt of copy of this order. On production of receipt for payment of the cost, the Ld. CIT(E) is directed to give one more opportunity of hearing to the assessee for registration u/s 12A(1)(ac)(iii) of the Act in accordance with the provisions of law. The assessee is also directed to comply before the Ld. CIT(E) in the course of set aside proceeding and not to seek adjournment without any pressing reason.