SHREE RIKHAVDEVJI & KUNTHUNATHJI PRABHU JAIN SWETAMBER MURTIPUJAK PADHI,SABARKANTHA vs. THE CIT(EXEMPTION), AHMEDABAD

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ITA 2132/AHD/2024Status: DisposedITAT Ahmedabad20 March 2025Bench: SHRI SANJAY GARG (Judicial Member), SHRI MAKARAND V. MAHADEOKAR, ACCOUNTANT MEMBER\nआयकर अपील सं/ITA No.2132/Ahd/2024\nनिर्धारण वर्ष / Assessment Year : - NA\nShree Rikhavdevji &\nKunthunathji Prabhu Jain\nSwetamber Murtipujak Padhi\nIlol, A Pilol,\nHimatnagar – 383 001\nSabarkantha (Gujarat)\nस्थायी लेखा सं./PAN: AAJTS 7172 E\nThe CIT (Exemption)\nबनाम /\nv/s.\nAhmedabad – 380 015\n(अपीलार्थी/ Appellant)\n(प्रत्यर्थी / Respondent)\nAssessee by :\nShri Tej Shah, AR\nRevenue by :\nShri A.P. 5 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the rejection of the application and cancellation of provisional registration were primarily based on the non-furnishing of certain documents and details. However, the CIT(E) did not make any finding on the genuineness of the trust's activities based on the documents available. The CIT(E) is expected to examine the objects and activities of the trust rather than solely relying on procedural deficiencies. The Tribunal noted that the CIT(E) did not provide an opportunity to rectify the deficiencies before rejecting the application, which violates the principle of natural justice. Therefore, the Tribunal set aside the impugned order of the CIT(E) and restored the matter to his file for fresh adjudication after affording the assessee due opportunity to present its case and furnish requisite details. The assessee was directed to cooperate in the proceedings. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, Shree Rikhavdevji & Kunthunathji Prabhu Jain Swetamber Murtipujak Padhi, filed an appeal against the order of the Commissioner of Income Tax (Exemption), Ahmedabad (CIT(E)). The CIT(E) rejected the assessee's application for registration under Section 12AB of the Income Tax Act, 1961, and cancelled its previously granted provisional registration. The appeal was filed with a delay of 49 days, which the Tribunal condoned due to bonafide reasons. The assessee had applied for registration in Form 10AB, having previously received provisional registration in Form 10AC for AY 2022-23 to AY 2024-25. The CIT(E) issued notices for details, to which the assessee partially responded. Despite further notices, the assessee did not furnish all required details, leading to the rejection and cancellation by the CIT(E).

What were the issues?

1. Whether the learned CIT(E) erred in law and facts in rejecting the application for registration under Section 10AD of the Act? (Question of law and fact) 2. Whether the learned CIT(E) erred in law and facts in rejecting the provisional registration which was granted earlier? (Question of law and fact) Assessee's Contentions: The assessee's Authorized Representative (AR) requested that the matter be restored to the file of the CIT(E) to provide one more opportunity to present the case. The AR did not explicitly rely on any specific authorities or precedents but sought a procedural remedy. Revenue's Contentions: The Departmental Representative (DR) raised no objection to the assessee's request for restoration.

Which sections of the Income-tax Act were involved?

Section 12AB,Section 12A(1)(ac)(iii),Section 10AD

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD

Before: SHRI SANJAY GARG & SHRI MAKARAND V. MAHADEOKAR

For Appellant: Shri Tej Shah, AR
For Respondent: Shri A.P. Singh, CIT-DR
Hearing: 19/03/2025Pronounced: 20/03/2025

ORDER \nPER MAKARAND V. MAHADEOKAR, AM:\nThis appeal has been filed by the assessee against the order of the\nCommissioner of Income Tax (Exemption), Ahmedabad [hereinafter referred\nto as “CIT(E)"], rejecting the application for registration under Section 12AB\nof the Income Tax Act, 1961 [hereinafter referred to as \"the Act\"], and\ncancelling the provisional registration granted earlier.\n2. The appeal was filed with a delay of 49 days. The assessee has\nsubmitted an application for condonation of delay along with an affidavit\nexplaining the reasons for the delay. It has been stated that the impugned\norder was received via e-mail on 29/08/2024, but due to inadvertence, the\nsame was not noticed immediately as the accountant was not checking the\nemail regularly. The order came to the notice of the assessee only on\n12/11/2024, after which necessary legal advice was obtained, and the appeal\nwas filed on 19/12/2024.\n2.

1.

1. Considering the facts and circumstances of the case, and in view of the\nsettled principles that courts should take a liberal approach in condoning\ndelays in filing appeals, if the delay is not intentional or malafide, we find\nthat the reasons for the delay are bonafide. Accordingly, the delay of 49 days\nin filing the appeal is condoned.\n3. The assessee filed an application in Form 10AB for registration under\nSection 12A(1)(ac)(iii) of the Income Tax Act, 1961. The assessee was earlier\ngranted provisional registration in Form 10AC on 24/09/2021, effective for\n Assessment Year (AY) 2022-23 to AY 2024-25.\n3.

1. The CIT(E) issued notices on 06/05/2024 and 29/06/2024, calling for\ncertain details/documents. The assessee partially responded on 05/07/2024,\nafter which a further notice was issued on 02/08/2024, directing the assessee\nto furnish the remaining details by 08/08/2024. However, no further\nresponse was submitted by the assessee.\n3.

2. Based on the non-compliance with the notices, the CIT(E) proceeded to\nreject the application for registration and also cancelled the earlier\nprovisional registration granted to the assessee.\n3.

3.

Therefore, the assessee filed the present appeal before us raising\nfollowing grounds of appeal:\n1. The Ld. CIT erred in law and in the facts of the case in rejecting the application\nfor registration u/s 10AD of the Act.\n2. The Ld. CIT erred in law and in the facts of the case in rejecting the provisional\nregistration which was granted earlier.\n4. The Authorized Representative (AR) of the assessee narrated the facts\nand circumstances and requested to restore the matter back to the file of\nCIT(E) as one more opportunity to present the case. The Departmental\nRepresentative (DR) raised no objection for the same.\n5. We have considered the submissions of the assessee and the reasons\nrecorded by the CIT(E) in the impugned order. We find that the rejection of\nthe application and cancellation of the provisional registration was primarily\nbased on the non-furnishing of certain documents and details. However,\nthere is no finding by the CIT(E) on the genuineness of the activities of the\ntrust on the basis of documents before him. The CIT(E) is expected to apply\nhis mind to the objects and activities of the trust rather than merely rejecting\nregistration based on procedural deficiencies. In the present case, it appears\nthat the CIT(E) has rejected the application without examining whether the\nactivities of the trust are genuine and in line with its objectives. The CIT(E)\nhas also not provided any opportunity to rectify the deficiencies before\nrejecting the application. The principle of natural justice demands that an\nassessee should be given a fair opportunity to comply with the requirements\nbefore an adverse order is passed.\n5.

1.

Considering these facts, we are of the view that the rejection of the\napplication and cancellation of the provisional registration requires\nreconsideration. Accordingly, we set aside the impugned order of the CIT(E)\nand restore the matter to his file for fresh adjudication after affording due\nopportunity to the assessee. The assessee is directed to co-operate in the\nproceedings and furnish all requisite details as may be required by the CIT(E)\nfor deciding the matter on merits.\n5.

2.

Therefore, the impugned order of CIT(E) is set aside. The matter is\nrestored to the file of CIT(E) for fresh adjudication in accordance with law.\n6. In the result, the appeal of the assessee is allowed for statistical\npurposes.\nOrder pronounced in the Open Court on 20th March, 2025 at Ahmedabad.\nSd/-\n(SANJAY GARG )\nJUDICIAL MEMBER\nSd/-\n( MAKARAND V. MAHADEOKAR )\nACCOUNTANT MEMBER\nअहमदाबाद/Ahmedabad, दिनांक/Dated 20/03/2025\nटी. सी. नायर, व.नि. स. / T.C. NAIR, Sr. PS\nआदेश की प्रतिलिपि अग्रेषित/

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