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Facts
The assessee, a trust, filed an application for approval under Section 80G. The CIT(Exemption) rejected the application, citing non-compliance and failure to submit required documents. The assessee contended that the trustees, being senior citizens, lacked knowledge of digital communication, leading to delays in responding to email notices.
Held
The Tribunal held that the interest of justice would be served by remanding the matter back to the CIT(E) to consider the application afresh. The assessee was directed to pay a cost of Rs. 5000/- to the Prime Minister Relief Fund.
Key Issues
Whether the rejection of the 80G approval application was justified due to the assessee's alleged non-compliance and delay in submission, considering the trustees' explanation of digital communication difficulties.
Sections Cited
80G, 80G(5)(ii), 80G(5)(iii)
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Income Tax Appellate Tribunal, “D” BENCH, AHMEDABAD
Before: DR.BRR KUMAR & SHRI T.R SENTHIL KUMAR
O R D E R PER: DR. BRR KUMAR, VICE PRESIDENT:
The captioned appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Exemption), Ahmedabad, vide order dated 21.11.2024. 2. The Assessee has taken the following grounds of appeal:-
1.1 The learned CIT(Exemption) erred in law and on facts in rejecting the appellant's application for approval under section 80G of the Income Tax Act, 1961 by order dtd:21.11.2024. Asst.Year –N.A - 2– 1.2 The learned CIT(Exemption) erred in cancelling the approval to the appellant under section 80G without providing sufficient and specific opportunity to the appellant to present its case. Therefore, the appellant shall be granted opportunity to produce additional evidences. 1.3 The learned CIT(Exemption) erred in treating non-response to email notices as non-compliance when: (a) The trustees had already demonstrated their compliance by submitting all required documents with Form 10AB (b) The inability to respond to notices was due to practical difficulties in accessing email, not willful non-compliance. (c) The trust has consistently maintained transparency in its operations. 1.4 The learned CIT (Exemption) erred in rejecting the application solely on the ground of non-submission of a note on activities and other unspecified details, without: (a) Considering the documents already submitted with the Form 10AB application (b) Examining the objects and activities mentioned in the trust deed (c) Verifying the financial statements and other documents on record. The learned CIT(Exemption) failed to appreciate that mere non- submission of additional information within the short time provided does not justify rejection of approval under section 80G. It is therefore prayed that the appellant may please granted registration u/s.80G in the interest of natural justice considering the eccentric facts of the case. Asst.Year –N.A - 3– 3. The assessee is a Trust and filed Form No.10AB on 30.06.2024 for approval of registration u/s.80G(5)(iii) of the Income Tax Act, 1961 Act. In this regard, notices dated 10.09.2024 and 24.10.2024 through email were issued to the assessee-trust requesting to furnish details/documents. In pursuance to the same, the assessee-trust remains un- complied, and the documentary evidences called for were also not submitted. Hence, the Ld.CIT(E) rejected the application for registration u/s.80G(5)(ii) of the Act and also cancelled the provisional registration.
Aggrieved by the order of the Ld. CIT(E), the Assessee filed appeal before the Tribunal.
At the outset, we find that the Ld.CIT(E) has rejected the application filed in Form 10AB for approval u/s.80G(5)(iii) of the Act of the assessee-trust due to non-compliance and failed to submit any substantial document. The Ld.AR submitted that trustees being senior citizen is not having knowledge of digital communication and therefore unable to access and monitor the email account where these notices were sent and consequently considerable delay occurred. Therefore, prayed that given an opportunity, the same would be apprised to the Ld.CIT(E). Ld. CIT(DR) argued that the assessee needs to furnish the proof of filing the submissions before the Ld. CIT(E). Having considered the facts on record, we hold that Asst.Year –N.A - 4– 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 filed by the assessee. However, a cost of Rs.5000/- imposed on the assessee, the amount should be deposited into “Prime Minister Relief Fund” and the receipt shall be submitted before the Ld.CIT(E), who shall take it on record before passing the fresh order. The assessee shall comply with the notices issued by the Ld.CIT(E) without seeking any unnecessary adjournments.
In the result, the appeal of the assessee is allowed for statistical purposes.