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Facts
The assessee trust applied for registration under Section 12AB of the Income Tax Act, but the CIT(E) rejected the application due to non-compliance and non-furnishing of documentary evidence. The provisional registration granted earlier was also cancelled.
Held
The Tribunal noted the assessee's failure to comply with the CIT(E)'s notices and imposed a cost of Rs. 5,000/-. However, in the interest of justice, the matter was set aside to the CIT(E) to provide another opportunity for the assessee to be heard and make compliance.
Key Issues
Whether the rejection of the application for registration under Section 12AB by the CIT(E) was justified, and if the assessee should be granted another opportunity to comply.
Sections Cited
12AB, 12A(1)(ac)(iii), 12A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH, AHMEDABAD
Before: Ms. SUCHITRA KAMBLE & SHRI NARENDRA PRASAD SINHA
This appeal is filed by the assessee against the order dated 05.04.2024 passed by the Commissioner of Income Tax (Exemption), Ahmedabad, (in short ‘the CIT(E)’) rejecting the application of the assessee for registration of the trust under Section 12AB of the Income Tax Act, 1961 (in short ‘the Act’).
The brief facts of the case are that the assessee had filed an application for registration of the trust u/s.12A(1)(ac)(iii) of the Act on 28.10.2023, which was rejected by the Ld. CIT(E) for the [Gurushri Umedpuri Gundikhad Kadva Patidar Charitable Trust vs. CIT(E) ] - 2 – reason that no compliance was made by the assessee and the documentary evidences as called for by the Ld. CIT(E) were not furnished. The provisional registration granted earlier on 07.04.2022 was also cancelled.
Aggrieved with the order of the Ld. CIT(E), the assessee has filed the present appeal. The following grounds have been taken in this appeal:
“1. On the facts and circumstances of the case and in law, the order passed by the learned CIT(EXEMPTION), Ahmedabad rejecting application for registration of the trust u/s 12AB of the Income Tax Act, 1961 is ab initio void being bad in law.
2. On the facts and circumstances of the case and in law, the learned CIT(EXEMPTION), Ahmedabad has erred in rejecting application for registration of the trust u/s 12AB of the Income Tax Act, 1961.
3. On the facts and circumstances of the case and in law, the learned CIT(EXEMPTION), Ahmedabad has erred in not granting registration u/s 12A of the Act to the Appellant.
4. The appellant craves leave to add, alter, amend and/or withdraw any ground or grounds of appeal either before or during the course of hearing of the appeal.”
Shri Dhrunal Bhatt, Ld. AR appearing for the assessee fairly conceded that no compliance could be made before the Ld. CIT(E) and the details and documentary evidences as called for by him were not furnished. He, therefore, requested that another opportunity may be provided to the assessee to produce the documents as required and for this purpose, he requested that the matter may be set aside to the file of the Ld. CIT(E).
Per contra, Dr. Darsi Suman Ratnam,
the Ld. CIT. DR supported the order of the Ld. CIT(E). He submitted that the [Gurushri Umedpuri Gundikhad Kadva Patidar Charitable Trust vs. CIT(E) ] - 3 – assessee neither furnished any documentary evidence to establish the genuineness of the activities of the trust nor to satisfy the activities were in consonance with the objects of the trust. Therefore, the request for registration was rightly rejected by the Ld. CIT(E).
We have carefully considered the rival submissions. As per the provision of Section 12AB of the Act, the Commissioner had to satisfy himself about the genuineness of the activities of the trust and also to verify that the activities as carried out were in consonance with the objects of the trust. Accordingly, the Ld. CIT(E) had called for the details/documents in this regard vide notice dated 15.12.2023 and 09.03.2024. The assessee neither filed the required details nor any adjournment for sought on any occasion. Under the circumstances, the Ld. CIT(E) had no alternative but to reject the application of the assessee for the registration of the trust. The assessee has not explained the reason for non-compliance before the Ld. CIT(E). Since, the assessee has failed to furnish any explanation for the non- compliance before the Ld. CIT(E), we deem it appropriate to impose a cost of Rs.5,000/- (Rupees Five Thousand only) on the assessee, which should be paid to the Income Tax Department within two weeks of receipt of this order. Further, considering the request of the ld. AR that the assessee is engaged in charitable activities and in the interest of justice, we deem it proper to set aside the matter to the Ld. CIT(E) with a direction to allow another opportunity of being heard to the assessee. The assessee is also directed to make compliance before the Ld. CIT(E) and not to seek adjournment without any pressing reason. In case, the [Gurushri Umedpuri Gundikhad Kadva Patidar Charitable Trust vs. CIT(E) ] - 4 – assessee fails to make compliance, the Ld. CIT(E) will be free to pass the order as he deems fit. The Ld. CIT(E) will proceed in the matter after verifying that the cost as imposed, is paid by the assessee.
In the result, the appeal of the assessee is allowed for statistical purposes.
This Order pronounced on 17/01/2025
1. Sd/- Sd/- (SUCHITRA KAMBLE) (NARENDRA PRASAD SINHA) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad; Dated 17/01/2025 S. K. SINHA True Copy आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. संबं�धत आयकर आयु�त / Concerned CIT 3. 4. आयकर आयु�त(अपील) / The CIT(A)- �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 5. गाड� फाईल / Guard file. 6. आदेशानुसार/ BY ORDER,