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Facts
The assessee, a charitable trust, filed applications for re-registration under Section 12A(1)(ac)(iii) and approval under Section 80G(5) of the Income Tax Act. The CIT(Exemption) rejected these applications due to non-compliance with notices seeking supporting documents.
Held
The Tribunal held that the assessee's failure to respond to notices was due to unavoidable circumstances and granted one more opportunity. The impugned orders were set aside, and the matters were restored to the CIT(Exemption) for fresh decisions.
Key Issues
Whether rejection of registration/approval by the CIT(Exemption) for non-compliance with notices, without considering the cause for non-compliance, is justified.
Sections Cited
12A(1)(ac)(iii), 80G(5), 12A, 12AB
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH, AHMEDABAD
Before: SHRI T.R. SENTHIL KUMAR & SHRI MAKARAND V. MAHADEOKAR
"ी टी.आर. से""ल कुमार, "ाियक सद" एवं "ी मकरंद वसंत महादेवकर, लेखा सद" के सम!। ] ] BEFORE SHRI T.R. SENTHIL KUMAR, JUDICIAL MEMBER AND SHRI MAKARAND V. MAHADEOKAR, ACCOUNTANT MEMBER आयकर अपील सं /ITA Nos.2208/Ahd/2024 & 2209/Ahd/2024 िनधा"रण वष" /Assessment Year : -NA- Women Empowerment The CIT (Exemption) बनाम/ Foundation Ahmedabad – 380 015 v/s. 7, Surohi Park-2 Opp. Rushikesh Garden Nava Nikol Khodiyarnagar S.O., Ahmedabad – 382 350 "थायी लेखा सं./PAN: AAATW 4894 N (अपीलाथ$/ Appellant) (%& यथ$/ Respondent) Assessee by : Adjournment Application filed Revenue by : Shri Pushpendra Singh Chaudhary, CIT सुनवाई की तारीख/Date of Hearing : 01/04/2025 घोषणा की तारीख /Date of Pronouncement: 02/04/2025 आदेश/O R D E R PER MAKARAND V. MAHADEOKAR, AM: Both these are two appeals filed by the assessee-trust against the separate orders passed by the Learned Commissioner of Income Tax (Exemption), Ahmedabad: • Order dated 21.11.2024, passed under section 12A(1)(ac)(iii) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) rejecting the application for registration in Form 10AB; and • Order dated 25.11.2024, passed under section 80G(5) of the Act, rejecting the application for approval. & 2209/Ahd/2024 Women Empowerment Foundation vs. The CIT (Exemption)
Since the issues involved are interlinked and arise from a common set of facts, both appeals are disposed of by this common order.
Facts of the case: 3. The assessee is a charitable-trust duly registered under the Bombay Public Trust Act, 1950. It filed applications in Form No. 10AB on 18.06.2024 seeking (i) re-registration under section 12A(1)(ac)(iii) of the Act and (ii) approval under section 80G(5) of the Act.
The Ld. CIT(Exemption), Ahmedabad rejected the application under section 12A of the Act on 21.11.2024 on the ground of non-compliance with notices issued for furnishing supporting documents. Thereafter, the application under section 80G of the Act was also rejected on 25.11.2024 solely on the ground that the assessee was not registered under section 12A of the Act, treating it as a precondition.
Aggrieved by the orders of CIT(Exemption), the assessee is in appeal before us with following grounds of appeal:
1. In law and in the facts and circumstances of the case of appellant, the order passed by the Ld. CIT (Exemption), Ahmedabad rejecting application for registration of the trust u/s 12AB of the Income Tax Act, 1961 is void ab initio being bad in law.
2. In law and on the facts and in the circumstances of the case of appellant, the Ld. CIT (Exemption), Ahmedabad has erred in rejecting application for registration of the trust u/s. 12AB of the Income Tax Act, 1961.
3. The appellant craves leave to add, alter or amend and/or withdraw any ground or grounds of appeal either before or during the course of hearing of the appeal. & 2209/Ahd/2024 Women Empowerment Foundation vs. The CIT (Exemption)
3 1. In law and in the facts and circumstances of the case of the appellant, the order passed by the Ld. CIT (Exemption), Ahmedabad rejecting the application for approval under clause (iii) of the first proviso to sub-section (5) of section 80G of the Income Tax Act, 1961 is void ab initio being bad in law.
2. In law and on the facts and in the circumstances of the case of the appellant, the Ld. CIT (Exemption), Ahmedabad has erred in rejecting the application for approval under clause (iii) of the first proviso to sub-section (5) of section 80G of the Income Tax Act, 1961.
The appellant craves leave to add, alter or amend and/or withdraw any ground or grounds of appeal either before or during the course of hearing of the appeal.
The assessee, by way of statement of facts, submitted that due to unavoidable and exceptional circumstances, including the serious illness and subsequent demise of the father of one of the managing trustees, the assessee was unable to comply with the notices issued in connection with the applications. It was submitted that the non-compliance was neither deliberate nor intentional.
During the course of hearing, the Ld.Departmental Representative fairly submitted that he has no serious objection if the matter is restored to the file of the Ld. CIT(E) for decision afresh after granting reasonable opportunity of being heard to the assessee.
We have heard the rival submissions. In the interest of justice and fair play and having regard to the facts and circumstances of the case, we are of the view that the assessee deserves one more opportunity to present its case before the CIT(Exemption). The failure to respond to notices was explained with reasonable cause, and a fresh decision by the competent authority after affording proper opportunity would meet the ends of justice. & 2209/Ahd/2024 Women Empowerment Foundation vs. The CIT (Exemption)
8.1. Accordingly, the impugned orders passed under section 12A(1)(ac)(iii) and under section 80G(5) of the Act are hereby set aside. The matters are restored to the file of the CIT(Exemption), Ahmedabad, who shall pass fresh orders after affording adequate opportunity of being heard and in accordance with law.
8.2. The assessee is also directed to comply with all notices issued by the CIT(Exemption) and not seek unnecessary adjournments.