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Facts
The assessee filed appeals against two orders of the CIT(E) rejecting their applications for registration under Section 12AB and exemption under Section 80G of the Income Tax Act, 1961. The CIT(E) cited grounds such as incomplete Form 10AB, issues with the Rajasthan Public Trust Act, and lack of genuineness of activities.
Held
The Tribunal noted a significant delay in filing the appeals, which was condoned after the assessee provided an affidavit explaining the confusion regarding the correct legal remedy. The Tribunal found that the assessee was not adequately heard by the CIT(E) and therefore restored the matter back to the file of the CIT(E) for fresh adjudication.
Key Issues
Whether the CIT(E) properly afforded an opportunity of hearing to the assessee and if the delay in filing appeals can be condoned.
Sections Cited
12AB, 80G, 12A
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Income Tax Appellate Tribunal, JAIPUR BENCHES,”B” JAIPUR
Before: DR. S. SEETHALAKSHMI, JM & SHRI GAGAN GOYAL, AM vk;dj vihy la-@ITA No. 856 & 857/JP/2025
ORDER PER: DR. S. SEETHALAKSHMI, J.M. Both these appeals have been filed by the assessee against two different orders of the Ld.CIT (Exemption), Jaipur dated 29-02-2024 passed under section 12AB and 80G of the Income Tax Act, 1961 respectively. The grounds of appeal raised by the assessee in the above mentioned appeals are as under:-
& 857/JP/2025 YOGVANSHAN SEVA SANSTHAN VS CIT (EXEMPTION), JAIPUR U/S 12AB of I.T. Act, 1961 ‘’That the order passed by ld. CIT(E), Jaipur by rejecting application u/s 12AB(1)(b) of the Act, 1961 is wrong, unwarranted and bad in law. Kindly direct to register the same.
U/S 80G of I.T. Act, 1961 ‘’That the order passed by ld. CIT(E),Jaipur by rejecting application u/s 80G(5)(iii) of the I.T. Act, is wrong, unwarranted and bad in law. Kindly direct to register the appellant.
2.1 During the course of hearing, the bench noted that there is delay of 392 days in each appeals for which the assessee of the trust submitted that the delay in filing the appeals were due to confusion of non-clarity about the exact and right legal remedy available to the trust viz. re-apply or appeal and the time was consumed in taking correct and final advice from the counsel to file the appeal before the ITAT and further the assessee submitted that this may be treated as sufficient cause for delay in filing the appeals. To this effect, the assessee has filed affidavit deposing the above facts in the case.
2.2 On the other hand, the ld. DR objected such inordinate delay in filing the appeals by the assessee but submitted that the Court may decide the issue as deemed fit and proper in the case.
& 857/JP/2025 YOGVANSHAN SEVA SANSTHAN VS CIT (EXEMPTION), JAIPUR 2.3 After hearing both the parties and perusing the materials available on record, the Bench noted that there is sufficient cause in late filing the appeals by the assessee. Hence, the delay made by the assessee is condoned and thus the appeals are heard on merit. 3.1 Apropos to the grounds so raised by the assessee in the ld. CIT(E) rejected the assessee’s claim of registration u/s 12AB of the Act by observing as under:- 4.1……. However, the applicant has failed to comply with the letters, despite being given three opportunities details of which given in para- 1. All the above details were sought in order to determine the actual working of the institution. The appellant did not furnish the sought details. The appellant has not furnished the details alngwith bill/ vouchers of expenses debited in income and expenditure account for F.Y. 2022-23. Further, the assessee was also not submitting the details of bank account and financial statement of last three financial years and details of note on activities carried out by the institution/ trust. The above details were sought from the applicant to determine the actual purpose/nature of expenditures made and to determine whether the impugned charitable activity had actually been done by the trust or not. Such type of verification is necessary to keep a check and balance on the actual working of the trust. Since, the applicant didn't furnish sought details, in the absence of such documents/ details, the justification of impugned activity could not be derived and it is not known whether the applicant is genuinely carrying out charitable activity as per its objects. Hence, the applicant has failed to justify the
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 Rajasthan Public Trust Act, 1959. Genuineness of Activities
06. 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 10.03.2022 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.’’ 3.2 Apropos to the ground 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:- ‘’3.6 In view of the above, the present application filed in FormNo.10AB under clause (iii) of first proviso to sub-section (5) of Section 80G of the Act is liable to be rejected as non- maintainable.
& 857/JP/2025 YOGVANSHAN SEVA SANSTHAN VS CIT (EXEMPTION), JAIPUR ‘’04. In view of above discussion assessee’s claim of approval u/s 80G is liable to be rejected and thus being rejected on following grounds:-
Approval u/s 80G cannot be granted without registration u/s 12AB. Commencement of activities
05. Further 2nd proviso to 80G(5) also state that if CIT is not 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 10.03.2022 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. ‘’ 3.3 During the course of hearing, the ld. AR of the assessee in the above appeals mainly submitted that the assessee was not provided adequate opportunity of being heard by the ld. CIT(E) and thus the asssessee should be provided one more opportunity to contest the case before the ld. CIT(E) and to adduce the documents/ details as desired by him (supra). Conclusively, the ld AR of the assessee prayed that the assessee trust may be provided one more opportunity to the contest the case before the ld CIT(E) and restore the appeals to the file of ld CIT(E) for afresh adjudication.
& 857/JP/2025 YOGVANSHAN SEVA SANSTHAN VS CIT (EXEMPTION), JAIPUR 3.4. Per contra, the ld. DR relied on the orders of the ld. CIT(E). 3.5 After hearing both parties and perusing the materials available on record, we noticed that the ld. CIT(E) has rejected the assessee’s claim of registration u/s 12AB 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 is that the assessee may be provided one more chance to adduce the desired documents before the ld. CIT(E) to resolve the issue in question. Therefore, in these circumstances, we restore the matter back to the file of the ld. CIT(E) with the direction that as and when the assessee trust produces the copy of the Registration under RPT Act, 1959 and other documents required by him then the application of the assessee trust for registration u/s 12AB of the Act be decided afresh in accordance with law. The assessee trust is also directed to produce the complete Form 10AB and produce the documents relating to the genuineness of the activities etc. before the ld CIT(E) 3.6 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 & 857/JP/2025 YOGVANSHAN SEVA SANSTHAN VS CIT (EXEMPTION), JAIPUR adjudication, therefore, the outcome of appeal of the assessee u/s 80G of the Act is consequential in nature. 3.7 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.