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Facts
The assessee filed appeals against orders of the CIT(E) cancelling their registration under Section 12AB and 80G. The assessee claimed non-receipt of notices due to email system issues, leading to non-submission of required information.
Held
The Tribunal restored the matter to the CIT(E) for fresh adjudication. The CIT(E) was directed to provide the assessee with a sufficient opportunity to produce documents and information related to the pending applications.
Key Issues
Whether the cancellation of registration under Section 12AB and 80G was justified due to the assessee's failure to respond to notices, and if such observations were curable in nature.
Sections Cited
12AB, 80G, 12A, 10(23C)
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Income Tax Appellate Tribunal, JAIPUR BENCHES,”B” JAIPUR
ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM Both these appeals have been filed by the assessee against two different orders of the ld.CIT (Exemption), Jaipur dated 13-12- 2024 passed under section 12AB and 80G of the Income Tax Act, 1961 [ for short Act ]respectively. The grounds of appeal raised by the assessee in the above-mentioned appeals are as under:-
KOTA VIPASSANA TRUST VS CIT (EXEMPTION), JAIPUR U/S 12AB of I.T. Act, 1961 ‘’1. Grounds of Appeal in the Matter of Cancellation of Trust Registration under Section 12A/AB Non-Submission of Reply Due to Non-Receipt of Notices. The appellant submits that the notices dated 06-9-2024, 25-10- 2024, and 09/11/2004, requesting information about the Trust, were not duly responded to within the prescribed time due to the non-receipt of the said notices The appellant claims that the notices were not seen in thefirst instance due to issue with the email system. Additionally, the appellant asserts that no manual notices were issued by the department, which could have served as an alternativecommunication method to ensure that the Trust received the required notices. The absence of manual notices further contributed in the non-submission of the requested information within the given time frame. However, the appellant is fully committed to providing the required information and is prepared to comply with all regulatory requirement.
2. The appellant respectfully requests that the department consider the circumstances of the non-receipt of notices and allow a reasonable time for the submission of the required information. The appellant further mentions that the provisional registration for Section 12A was on 23-03- 2004. Subsequently, the appellant submitted Form 10AB on 29/05/2024, as required to ensure compliance with the regulatory requirements for maintaining registration under Section 12A/12AB. Prayer: The appellant respectfully prays for the cancellation order to be set aside and that the Trust’s registration u/s 12A/12AB be continued in the interest of justice. Jain Citizen Foundation Trust at present is providing Education Help, Ration Help and Medical Help to needy persons. U/S 80g of I.T. Act, 1961 ‘’1. Grounds of Appeal in the Matter of Cancellation of Trust Registration under Section 80G Non-Submission of Reply Due to Non- Receipt of Notices. The appellant submits that the notices dated 06-9- 2024, 25-10-2024, and 09/11/2004, requesting information about the Trust, were not duly responded to within the prescribed time due to the non-receipt of the said notices The appellant claims that the notices were not seen in the first instance due to issue with the email system. Additionally, the appellant asserts that no manual notices were issued by the department, which could have served as an alternative communication method to ensure that the Trust received the required notices. The absence of manual notices further contributed in the non- submission of the requested information within the given time frame. However, the appellant is fully committed to providing the required information and is prepared to comply with all regulatory requirement.
KOTA VIPASSANA TRUST VS CIT (EXEMPTION), JAIPUR 2. The appellant respectfully requests that the department consider the circumstances of the non-receipt of notices and allow a reasonable time for the submission of the required information. The appellant further mentions that the provisional registration for both Section 12A and Section 80G was issued onon 23-03-2004. Subsequently, the appellant submitted Form 10AB on 29/05/2024, as required to ensure compliance with the regulatory requirements for maintaining registration under Section 80G and 12A/12AB. Prayer: The appellant respectfully prays for the cancellation order to be set aside and that the Trust’s registration u/s 80G be continued in the interest of justice. Jain Citizen Foundation Trust at present is providing Education Help, Ration Help and Medical Help to needy persons.’’ 2.1 Apropos to the grounds so raised by the assessee in the ld. CIT(E) rejected the assesses claim of registration u/s 12AB of the Act by observing as under:- ‘’04. In view of above discussion assessee’s claim of registration section 12AB is liable to be rejected and thus being rejected on following grounds:-
Incomplete Form 10AB Registration under Rajasthan Public Trust Act,, 1959. Non Genuineness of activities and non-compliance 05. Further 12AB (1)(b)(ii) (B) of the Income Tax Act, 1961 also state that if CIT is not satisfied has to pass order rejecting such application and also cancelling its earlier registration. Thus, it is clarified that applicant's provisional registration under clause (vi) of clause (ac) of sub-section (1) of section 12A of the Income Tax Act, 1961 dated 24.03.2023 is also being cancelled. Further assessee has failed to give proper justification for regularization of provisional registration, thus with this order provisional registration is also cancelled.’’ KOTA VIPASSANA TRUST VS CIT (EXEMPTION), JAIPUR 2.2 Apropos to the grounds so raised by the assessee in the ld. CIT(E) rejected the assessee’s claim of exemption u/s 80G of the Act by observing as under:- ‘’02. Approval u/s 80G cannot be granted without registration u/s 12AB 2.1. As per rule 11AA of the Income Tax Rule, 1962, the registration u/s 12A/12AB or notification u/s 10(23C) is a precondition for granting approval u/s 80G of the IT Act, 1961. Vide this office order No. ITBA/EXM/F/EXM43/2024- 25/1071202042(1) dated 13.12.2024, In view of above discussion, the application in form No. 10AB seeking exemption u/s 80G is liable to be rejected
Further 2nd proviso to 80G(5) also state that if CIT is not satisfied has to pass order rejecting such application and also cancelling its earlier approval. Thus, it is clarified that applicant provisional approval under clause (iv) of first proviso to sub-section (5) of section 80G of the Income Tax Act, 1961 dated 24.03.2024 is also being cancelled. Further assessee has failed to give proper justification for regularization of provisional approval, thus with this order provisional approval is also lapsed and cancelled.’’ 2.3 During the course of hearing, the ld. AR of the assessee in the above appeals mainly submitted that the assessee has received the registration under the provision of RPT Act and the other observations of the ld. CIT(E) are curable in nature and thereby the assessee be given chance to adduce the required documents/ information before the ld. CIT(E). The ld. AR of the assessee further submitted that he may be provided one more chance to KOTA VIPASSANA TRUST VS CIT (EXEMPTION), JAIPUR adduce the information/documents as to the case of Section 12AB and 80G of the Act so that the issue in both the appeals could be decided on merit. Thus the ld. AR of the assessee prayed to restore both the appeals to the ld CIT(E) for afresh adjudication by providing one more opportunity of being heard to the assessee. 2.4. Per contra, the ld. DR relied on the orders of the ld. CIT(E). 2.5 After hearing both parties and perusing the materials available on record, we noticed that the ld. CIT(E) has rejected the assessee’s application for registration u/s 12AB and 80G of the Act on the ground that the assessee had not supplied the details/ information in relation to Section 12AB and 80G of the Act. It is also noticed that the ld.CIT(E) has cancelled the provisional registration of the assessee for the reason that the assessee trust had failed to give proper justification for regularization of provisional registration. The prayer of the ld.AR of the assessee was that the assessee did not receive any communication from the Department but he may be provided one more chance to adduce the documents before the ld. CIT(E) to resolve the issue in question as the observation in the impugned orders are curable in nature. The Bench noted that the assessee had not received the notices issued by the Department KOTA VIPASSANA TRUST VS CIT (EXEMPTION), JAIPUR and thus the assessee could not comply with the directions as mentioned by the Department. Hence, in this situation the Bench feels to restore the matter back to the file of the ld. CIT(E) with the direction to decide the issue afresh notices in set aside proceeding after providing sufficient opportunity to the assessee trust and the application of the assessee trust for registration u/s 12AB and 80G of the Act be decided in accordance with law. The assessee trust is also directed to produce the documents relating to Incomplete Form 10AB, Registration under RPT Act and genuineness of the activities trust before the ld CIT(E). 2.6 Since we have restored the appeal of the assessee with regard to the registration u/s 12AB of the Act to the file of the ld. CIT(E) for afresh adjudication, therefore, the outcome of appeal of the assessee u/s 80G of the Act is consequential in nature. 2.7 Before parting, we may make it clear that our decision to restore the matter back (supra) to the file of the ld. CIT(E) shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by the ld. CIT(E) independently in accordance with law.