INDIAN REDCROSS SOCIETY ANAND DISTRICT BRANCH,ANAND vs. THE CIT (EXEMPTION), AHMEDABAD

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ITA 1909/AHD/2024Status: DisposedITAT Ahmedabad12 February 2025Bench: MS. SUCHITRA KAMBLE, JUDICIAL MEMBER\nAND\nSHRI MAKARAND V. MAHADEOKAR, ACCOUNTANT MEMBER\nआयकर अपील सं/ITA No.1909/Ahd/2024\nनिर्धारण वर्ष / Assessment Year : -\nIndian Redcross Society-\nAnand District Branch\nSardar Bhavan\nSardar Gunj Road\nOpp. Anand Municipality\nAnand-388 001 (Gujarat)\nबनाम /\nv/s.\nThe CIT(Exemption)\nVejalpur\nAhmedabad\nस्थायी लेखा सं./PAN: AAAT 19551 L\nअपीलार्थी/ (Appellant)\nप्रत्यर्थी / (Respondent)\nAssessee by :\nShri B.T. Thakkar, AR\nRevenue by :\nShri V.5 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(E) erred in rejecting the assessee's application for renewal of approval under Section 80G(5)(iii) of the Act. The Tribunal found that the assessee had indeed filed its response and submitted the required documents on 21.08.2024, which was within the due date of 22.08.2024 specified by the CIT(E). The Tribunal observed that the CIT(E) had ignored this submission and erroneously rejected the application on grounds of non-compliance. This approach was considered a violation of natural justice, as the assessee's submissions should have been considered before passing an adverse order. The CIT(E) had not properly examined the submitted documents, leading to a rejection on incorrect factual grounds. Consequently, the Tribunal set aside the order of the CIT(E) and restored the matter to the CIT(E)'s file for fresh adjudication, with a direction to duly consider the assessee's submission filed on 21.08.2024 and decide the matter afresh after granting an opportunity of hearing. The ratio of this decision is that an application cannot be rejected for non-compliance if the assessee has demonstrably submitted the required information within the stipulated time, and such submissions must be duly considered.

What were the facts?

The assessee, Indian Redcross Society-Anand District Branch, applied for renewal of approval under Section 80G(5)(iii) of the Income Tax Act, 1961. The assessee had previously been granted provisional approval valid up to AY 2024-25. The Commissioner of Income Tax (Exemption) [CIT(E)], Ahmedabad, issued a questionnaire and a final notice for compliance. The assessee submitted the required information and documents on 21.08.2024, demonstrating the genuineness of its activities and fulfillment of Section 80G conditions. Despite this timely submission, the CIT(E) rejected the application on 03.09.2024, citing non-compliance and failure to satisfy the conditions under Section 80G(5)(i) to (v). The assessee appealed this rejection, arguing that the CIT(E) ignored its submissions.

What were the issues?

1. Whether the CIT(E) erred in law and on facts in rejecting the renewal application for approval under Section 80G(5)(iii) of the Income Tax Act, 1961, on the ground of non-compliance. The assessee contended that it had submitted all required information on 21.08.2024 in response to the notices issued by the CIT(E), and that the CIT(E) erroneously rejected the application without considering these submissions. The assessee relied on the fact that its submission was duly acknowledged. The revenue did not object to restoring the matter for fresh adjudication. The Tribunal was to decide if the rejection was justified given the assessee's timely submission of documents.

Which sections of the Income-tax Act were involved?

Section 80G(5)(iii),Section 80G(5)(i),Section 80G(5)(ii),Section 80G(5)(iv),Section 80G(5)(v)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, AHMEDABAD

Before: MS. SUCHITRA KAMBLE & SHRI MAKARAND V. MAHADEOKAR

For Appellant: Shri B.T. Thakkar, AR
For Respondent: Shri V. Nandakumar, CIT-DR
Hearing: 10/02/2025Pronounced: 12/02/2025

ORDER \nPER MAKARAND V. MAHADEOKAR, AM:\nThis appeal by the assessee is directed against the order dated\n03/09/2024 of the Commissioner of Income Tax (Exemption), Ahmedabad\n[hereinafter referred to as “CIT(E)"], rejecting the approval under Section\n80G(5)(iii) of the Income Tax Act, 1961 [hereinafter referred to as “the Act”].\nFacts of the Case:\n2. The assessee, Indian Redcross Society Anand District Branch, applied\nfor renewal of approval under Section 80G(5)(iii) of the Act by filing Form\n10AB.\nThe assessee was granted provisional approval under the said section\non 05/04/2022 which was valid up to A.Y. 2024-25.\n2.

1. In response to the renewal application the CIT(E) issued a\nquestionnaire on 06.07.2024, followed by a final notice on 10.08.2024,\nrequiring compliance by 22.08.2024.\n3. The assessee, in compliance with the notice issued, submitted the\nrequired information and documents on 21.08.2024. The submissions\nincluded a detailed note on the activities of the institute, a copy of the Rule,\nself-certified copies of financial statements for Financial Years (FYs) 2021-22,\n2022-23 and 2023-24, details of donations received, bank statements, and\nproof of identity of trustees. These documents were filed to demonstrate the\ngenuineness of activities and the fulfilment of conditions under Section 80G\nof the Act.\n3.

1. However, despite timely compliance, the CIT(E) rejected both\napplications on grounds of non-compliance. The order dated 03/09/2024\nrejected the application under Section 80G(5)(iii) of the Act on the grounds of\nnon-compliance, stating that the assessee had failed to satisfy the genuineness\nof activities, and the conditions prescribed under Section 80G(5)(i) to (v) of\nthe Act.\n4. Aggrieved by the rejection, the assessee has filed the present appeal\nbefore us, contending that CIT(E) has completely ignored the submissions\nfiled on 21.08.2024, leading to an erroneous rejection order. The assessee has\nraised the following grounds in the appeal:\n

1. CIT(Exemption) Ahmedabad erred in law and on facts in renewal application for\napproval under section 80G(5)(iii) of The Income Tax Act, 1961 on ground of non-\ncompliance.\n2. The appellant says and submit that provisional approval U/s 80G(5) of the Act was\ngranted to the trust from 05.04.2022 to A.Y. 2024-25. In response to filed renewal\napplication in Form 10AB Online, a questionnaire dated 06.07.2024 was issued by\nthe office of CIT (Exemption). The appellant sought adjournment. Again Notice\ndated 10.08.2024 was issued fixing date 22.08.2024 requiring certain information.\nThe appellant submitted all the required information vide letter dated 21.08.2024.\nThe learned CIT(Exemption) has without considering submission filed the on\n21.08.2024, rejected the application for renewal of Exemption U/s 80G(5)(iii) of the\nIT Act on ground of non-compliance vide order dt. 03.09.2024\"\n5. During the course of hearing before us, the Authorized Representative\n(AR) submitted that in reply to a notice relating to renewal under Section\n80G(5)(iii) of the Act, the assessee had complied with the notice dated\n10.08.2024 by submitting required documents on 21.08.2024.\n5.

1. The AR further stated that the CIT(E) ignored this submission and\npassed orders citing non-compliance, despite the fact that the submission was\nduly acknowledged by the department. The AR requested to restore the\nmatter back to the file of CIT(E). The Departmental Representative (DR) did\nnot object to restoring both matters for fresh adjudication.\n6. It is evident from the record that the assessee filed its response on\n21.08.2024, within the due date mentioned in the CIT(E)'s notice i.e.\n22/08/2024. The CIT(E) ignored this submission and erroneously rejected the\napplication citing non-compliance. Such an approach violates natural justice,\nas the assessee's submission should have been duly considered before\npassing an adverse order. The CIT(E) did not examine the documents\nsubmitted and rejected the application on incorrect factual grounds. Given\nthat the documents were submitted, the rejection was without proper\nverification.\n6.

1.

Considering the facts, we set aside the order of the CIT(E) and restore\nthe matter back to his file with the direction that the CIT(E) shall duly\nconsider the assessee's submission filed on 21.08.2024 and decide the matter\nafresh after granting an opportunity of hearing to the assessee.\n7. The order under appeal is set aside and the issues are restored to\nCIT(E) for fresh adjudication.\n8. In the result, the appeal of the assessee is allowed for statistical\npurposes.\nOrder pronounced in the Open Court on 12th February,2025 at Ahmedabad.\nSd/-\nSd/-\n(SUCHITRA KAMBLE)\nJUDICIAL MEMBER\n(MAKARAND V.MAHADEOKAR)\nACCOUNTANT MEMBER\nAhmedabad, Dated\n12/02/2025\nटी.सी. नायर, व.नि. स. / T.C. NAIR, Sr. PS\nआदेश की प्रतिलिपि अग्रेषित/

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