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Facts
The assessee, a charitable trust, applied for re-registration under Section 12A of the Income Tax Act. The CIT(E) rejected the application and cancelled the provisional registration due to the assessee not responding to notices seeking verification of the trust's activities.
Held
The Tribunal held that the failure to respond to notices appeared to be a procedural lapse due to the trustees not being well-versed with online procedures and the accountant's age. An opportunity should be granted to the assessee to submit the necessary documents.
Key Issues
Whether the rejection of registration application for non-compliance with notices was justified, or if an opportunity should be granted to rectify the procedural lapse.
Sections Cited
12A, 80G, 12A(1)(ac), Rule 17A
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Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD
Before: SHRI SANJAY GARG & SHRI MAKARAND V. MAHADEOKAR
"ी संजय गग", "ाियक सद" एवं "ी मकरंद वसंत महादेवकर, लेखा सद" के सम!। ] ] BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI MAKARAND V. MAHADEOKAR, ACCOUNTANT MEMBER आयकर अपील सं /ITA No.2141/Ahd/2024 िनधा"रण वष" /Assessment Year : NA Gramya Vikas Pratishthan The CIT (Exemption) बनाम/ Koba Ahmedabad – 380 015 v/s. At & Post : Koba Navakoba, Gandhinagar – 382 009 (Gujarat) "थायी लेखा सं./PAN: AAATG 1641 D (अपीलाथ$/ Appellant) (%& यथ$/ Respondent) Assessee by : Shri Alpesh Shah, AR Revenue by : Shri A.P. Singh, CIT-DR सुनवाई की तारीख/Date of Hearing : 19 /03/2025 घोषणा की तारीख /Date of Pronouncement: 20 /03/2025 आदेश/O R D E R PER MAKARAND V. MAHADEOKAR, AM:
This appeal has been filed by the assessee against the order of the Commissioner of Income Tax (Exemptions), Ahmedabad [hereinafter referred to as “CIT(E)”] dated 22/10/2024, rejecting the application for registration under Section 12A of the Income Tax Act, 1961 [hereinafter referred to as “the Act”] and also cancelling the provisional registration granted earlier. Gramya Vikas Pratishthan Koba vs. CIT(E)
The assessee is a Charitable Trust registered under the Bombay Public Trust Act, 1950, having Registration No. F/214/Gandhinagar, incorporated on 21/07/1972. The trust was granted registration under Sections 12A and 80G of the Act and has been regularly filing its returns of income. Pursuant to the amendments in Section 12A(1)(ac) of the Act, the assessee filed an application in Form 10A on 16/02/2023 for re-registration. The CIT(E) issued notices on 25/07/2024 and 13/09/2024, calling for certain details/documents for verification of the genuineness of the trust’s activities. The assessee did not respond to the notices within the stipulated time. Consequently, the CIT(E), vide order dated 22/10/2024, rejected the application and also cancelled the provisional registration granted earlier.
Aggrieved by the order of the CIT(E), the assessee is in appeal before us with following grounds of appeal:
1. The learned Commissioner of Income Tax erred in law and on facts in rejecting the application for the registration of trust u/s 12A of the Act. 2. The learned Commissioner of Income Tax ought to have granted the registration u/s 12A of the Act since the necessary details and information were filed in due course. Assessee craves leave to add, amend, alter, edit, delete, modify or change all or any of the ground or grounds of appeal at the time of or before the hearing of the appeal.
The learned Authorized Representative (AR) submitted that the non- compliance with notices was inadvertent, as the trustees were not well-versed with online filing and communication via electronic means. The AR also submitted that the Accountant of the Trust is very old (74 years) and he is also not conversant with the procedure. It was further submitted that the trust Gramya Vikas Pratishthan Koba vs. CIT(E) has been in existence for several decades and has been regularly complying with tax laws. The AR requested that an opportunity be granted to submit the necessary details before the CIT(E), as the trust is willing to comply with all the legal requirements.
The learned Departmental Representative (DR) did not raise any objections to the request for restoring the matter back to the file of the CIT(E) for fresh adjudication.
We have heard both parties and perused the material available on record. It is evident that the rejection of the assessee’s application was primarily due to non-furnishing of requisite details in response to the notices dated 25/07/2024 and 13/09/2024. 6.1. Considering the facts and principles of natural justice, we are of the view that the assessee should be given an opportunity to comply with the requirements and submit the necessary documents before the CIT(E). The failure to respond to notices, as explained by the assessee, appears to be a procedural lapse rather than an intentional default.
6.2. In view of the above, we set aside the order of the CIT(E) and restore the matter to his file for fresh adjudication. The CIT(E) is directed to reconsider the application after granting a reasonable opportunity to the assessee to submit the requisite details/documents. Gramya Vikas Pratishthan Koba vs. CIT(E)
6.3. The assessee is also directed to co-operate with the proceedings and ensure full compliance with the requirements under Rule 17A of the Income Tax Rules, 1962, and other relevant provisions of the Act.