SEVA SAMARPAN CHARITABLE TRUST KHAMBHAT,ANAND vs. THE CIT(EXEMPTION), AHMEDABAD

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ITA 1989/AHD/2024Status: DisposedITAT Ahmedabad24 January 20253 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that in the interest of justice, the matter should be restored to the file of the CIT(E) for de-novo consideration. The reasoning was based on the assessee's submission that they were not afforded a reasonable opportunity of being heard due to short notice periods and inability to access the e-portal. The Tribunal acknowledged that the assessee had furnished substantial details in their application. The CIT(E) was directed to grant a due opportunity of hearing to the assessee. The appeal was allowed for statistical purposes. No issue was expressly left undecided.

What were the facts?

The assessee, Seva Samarpan Charitable Trust, filed an appeal against the order dated 02.09.2024 passed by the Commissioner of Income Tax (Exemptions) (CIT(E)), Ahmedabad. The assessee had applied for registration under Section 12A of the Income Tax Act, 1961, in Form 10AB. The CIT(E) issued notices on 04.07.2024 and 07.08.2024 seeking details. The CIT(E) observed that the assessee neither filed submissions nor sought adjournment, leading to the rejection of the application for registration under Section 12A and cancellation of its provisional registration. The CIT(E) noted the failure to provide documentary evidence regarding the genuineness of activities, compliance with objects, and adherence to other material laws.

What were the issues?

1. Whether the learned Commissioner of Income Tax (Exemption) erred in rejecting the application for registration under Section 12A of the Act, considering the facts and circumstances and the law. The assessee contended that the CIT(E) failed to verify the genuineness of activities based on substantial details furnished in Form 10AB, such as the Registration Certificate, Trust Deed, and Audit Reports for the last three years. The assessee argued that the CIT(E) ignored these details. 2. Whether the learned Commissioner of Income Tax (Exemption) failed to provide a reasonable opportunity of being heard as provided under Section 12AB(1)(b)(ii)(B) of the Act. The assessee argued that only two notices were issued on short intervals, and they could not access the e-portal to be aware of the notices, thus lacking a proper opportunity. The revenue did not object to the matter being restored for de-novo consideration.

Which sections of the Income-tax Act were involved?

Section 12A,Section 12AB,Section 115TD,Section 253

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, A BENCH, AHMEDABAD

Before: SHRI SIDDHARTHA NAUTIYAL & SHRI MAKARAND V. MAHADEOKAR

For Appellant: Shri Mehal Doshi, A.R
For Respondent: Dr. Darsi Suman Ratnam, CIT DR
Hearing: 23.01.2025Pronounced: 24.01.2025

O R D E R

PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER:

1.

This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Exemptions), (in short “Ld. CIT(E)”), Ahmedabad vide order dated 02.09.2024.

2. The Assessee has taken the following grounds of appeal:-

“1. On the facts and in circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Exemption) has erred in rejecting application for registration u/s 12A of the Act.

2.

On the facts and in circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Exemption) has not provided reasonable opportunity of being heard as provided under Section 12AB(1)(b)(ii)(B) of the Act.

3. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal.”

3.

The brief facts of the case are that the assessee / applicant trust filed application for grant of registration under Section 12A of the Act in Form 10AB. Ld. CIT(E) issued notices to the assessee dated 04.07.2024 and Seva Samarpan Charitable Trust Khambhat vs. CIT(E) Asst.Year –N.A. - 2– 07.08.2024 asking for certain details / information. The CIT(E) noted that the applicant trust has neither filed any submission nor sought any adjournment in this case. Accordingly, the Ld. CIT(E) rejected the application for grant of registration under Section 12A of the Act and also directed cancellation of provisional registration earlier granted to the applicant trust. While passing the order, Ld. CIT(E) made the following observations:

“7. As discussed above, the applicant/assessee has failed to file documentary evidences to enable me to satisfy about: i. Genuineness of the activities of the trust or institution. ii. That the activities of trust or institution are in consonance with the objects of the trust or institution. iii. That other laws material for the purpose of achieving objects are complied with.

8. In view of the above, the present application filed in Form No.10AB sub-clause (iii) of clause (ac) of sub-section (1) of section 12A of the Income Tax Act,1961 is rejected and also your provisional registration stands cancelled.

9.

Further, the applicant should compute its tax liability under section 115TD of Income Tax Act, 1961 read with Rule 17CB of IT Rules and report the same in return of Income. It should also pay the tax so computed within timeline provided under section 115TD(5) of Income Tax Act,1961. In case applicant is filing appeal against this order u/s. 253 of IT Act 1961, proof of filing of appeal should be provided to AO to get benefit of extended time limit provided u/s. 115TD(5) of IT Act 1961."”

4.

The assessee / applicant is in appeal before us against the aforesaid order passed by Ld. CIT(E). Before us, the Counsel for the assessee submitted that there was lack of opportunity granted to the assessee / applicant trust since only two notices of hearing were issued on very short intervals. The assessee for that period could not access the e-portal and accordingly, the assessee / applicant trust was not aware about the issuance of notices by Ld. CIT(E). However, the Counsel for the assessee submitted that the applicant trust has been operating since December, 2020 and in the Form 10AB filed by the assessee, substantial details were furnished like Registration Certificate, Trust Deed, Audit Report for the last three years. Accordingly, it was submitted that on the basis of these Seva Samarpan Charitable Trust Khambhat vs. CIT(E) Asst.Year –N.A. - 3– details, Ld. CIT(E) could have verified the genuineness of the activities of the trust, but Ld. CIT(E) chose completely to ignore the above details / information. Accordingly, the Counsel for the assessee submitted that the matter may be restored to the file of Ld. CIT(E) to decide the case of the assessee on merits, after giving due opportunity of hearing to the assessee.

5.

In response, the D.R. also did not object to the matter being restored to the file of Ld. CIT(E) for de-novo consideration.

6.

We have heard the rival contentions and perused the material on record.

7.

Accordingly, looking into the above facts placed on record, in the interest of justice, the matter is restored to the file of Ld. CIT(E) for de- novo consideration, after giving due opportunity of hearing to the assessee.

8.

In the result, the appeal of the assessee is allowed for statistical purposes. This Order pronounced in Open Court on 24/01/2025

Sd/- Sd/- (MAKARAND V. MAHADEOKAR) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 24/01/2025 TANMAY, Sr. PS TRUE COPY आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��थ� / The Respondent. 3. संबंिधत आयकर आयु� / Concerned CIT 4. आयकर आयु�(अपील) / The CIT(A)- 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER,

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