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Facts
The assessee filed appeals against two orders of the Ld. CIT (Exemption) rejecting their applications for registration under Section 12AB and approval under Section 80G of the Income Tax Act, 1961. The grounds for rejection included incomplete Form 10AB, non-registration under the Rajasthan Public Trust Act, and non-genuineness of activities.
Held
The Tribunal condoned the delay in filing the appeals. The appeals were restored to the file of the Ld. CIT(E) for fresh adjudication, with a direction to consider the certificate under the Rajasthan Public Trust Act and other documents to resolve the issues.
Key Issues
Whether the Ld. CIT(E) erred in rejecting the applications for registration and approval on grounds that were disputed by the assessee, and whether the assessee was denied a proper opportunity of being heard.
Sections Cited
12AB, 80G, 12A
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Income Tax Appellate Tribunal, JAIPUR BENCHES,”A” JAIPUR
Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA No. 485 & 486/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 29-11-2024 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:-
SHRI RADHARANI JAN KALYAN SEWA SANSTHAN VS CIT (E), JAIPUR U/S 12AB of I.T. Act, 1961 1. On the facts and circumstances of the case and in law, ld CIT(Exemption) has grossly erred in rejecting the final registration application filed u/s 12AB of the Income Tax Act, 1961 Such denial of registration is invalid in law and facts hence deserves to be quashed 2. On the facts and circumstances of the case and in law, the ld CIT(Exemption) has erred in rejecting the final registration due Incomplete Form 10AB whereas the particulars of Form 10AB were complete filled Therefore, passing such order rejecting the final registration application on this basis is completely absurd, unlawful and against the principal of natural justice and therefore deserves to be set aside 3. On the facts and circumstances of the case and in law, the ld CIT(Exemption) has erred in rejecting the final registration due to Non-Registration under Rajasthan Public Trust Act, 1959 however, the trust is duly registered under the Rajasthan Public Trust Act, 1959. Therefore, order denying the final registration on this ground deserves to be rolled back 4. On the facts and circumstances of the case and in law, the ld. CIT(Exemption) has further erred in rejecting the registration application on the ground of Non-Gemuneness of Activities. However, the activities of the trust are completely genuine and explainable. Therefore, the denial of registration on this basis is completely irrational, illogical and against the principle of natural justice, hence deserves to be quashed 5. On the facts and circumstances of the case and in law, the ld CTT (Exemption) has further erred in cancelling the provisional registration earlier granted under section 12A of the Income Tax Act, 1961. Such cancellation being arbitrary in nature as well as unlawful hence deserves to be deleted.’’ ITA NO. 486/JP/2025 U/S 80G of I.T. Act, 1961
On the facts and circumstances of the case and in law, ld. CIT(Exemption) has grossly erred in rejecting the approval u/s 80G of the Income Tax Act, 1961. Such denial of approval is invalid in law and facts hence deserves to be quashed.
SHRI RADHARANI JAN KALYAN SEWA SANSTHAN VS CIT (E), JAIPUR 2. On the facts and circumstances of the case and in law, the ld CIT(Exemption) has erred in rejecting the approval due to Non- Registration under Rajasthan Public Trust Act, 1959 however, the trust is duly registered under the Rajasthan Public Trust Act, 1959. Therefore, order denying the approval u/s 80G on this ground deserves to be set aside.
On the facts and circumstances of the case and in law, the ld. CIT(Exemption) has further erred in rejecting the approval application on the ground of Non-Genuineness of Activities. However, the activities of the trust are completely genuine and explainable. Thus, the denial of approval on this basis is completely irrational, illogical and against the principle of natural justice, hence deserves to be rolled back.
On the facts and circumstances of the case and in law, the ld. CIT (Exemption) has further erred in cancelling the provisional approval granted earlier under clause (iv) of first proviso to sub- section (5) of section 80G of the Income Tax Act, 1961 Such cancellation of approval being arbitrary in nature as well as unlawful hence deserves to be deleted.
2.1 During the course of hearing, the Bench noticed that there is delay of 55 days in filing the above mentioned appeals for which the Secretary of the Sansthan has filed an application dated 26-03-2025 for condonation of delay giving therein following reasoning. ‘’In this regard, I would like to submit that the delay was purely unintentional and occurred due to a communication gap with our former tax consultant. Due to this, we were under the impression that the necessary compliance had been duly completed. However, upon the change in the consultant, when then new consultant reviewed the trust’s compliance status, it was discovered that the required filing against the aforementioned had not been undertaken. Once the discrepancy came to our attention, we immediately took corrective steps and have now completed the filing process. We assure you that there was no willful negligence or intention to evade any compliance objection.
SHRI RADHARANI JAN KALYAN SEWA SANSTHAN VS CIT (E), JAIPUR In the light of above circumstances, we earnestly request you kind consideration to condone the delay in filing the appeals and accept our submission. We remain committed to ensuring timely compliance in future.’’ To support the submission as to condonation of delay for both the appeals, the Secretary of the Sansthan has filed an affidavit deposing therein above facts and circumstances of the case.
2.2 On the other hand, the ld.DR did not controvert the facts stated in the application for condonation of delay. 2.3 We have heard both the parties and perused the materials available on record including the affidavit of Secretary of the Sansthan. In this case, the Bench in nutshell noted that there is sufficient cause in not timely filing the appeals of the assessee and there is merit in the application of the assessee. Thus the delay is condoned. 2.1 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:- ‘’05. 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.
SHRI RADHARANI JAN KALYAN SEWA SANSTHAN VS CIT (E), JAIPUR Non Genuineness of activities & non compliance 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 25.05.2022 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.’’ 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/EXM45/2024-25/1070772828(1) dated 29.11.2024 Also, during the present proceedings, the applicant has also failed to furnish any replies, thus, genuineness of activities and all the above issues remains same. Thus, genuineness of activities and all the issues remain same. Thus, the claim of the applicant u/s 80G is liable to rejected on this issue on following grounds Incomplete Form 10AB. Registration under Rajasthan Public Trust Act, 1959. Non Genuineness of Activities & non compliance. In view of above discussion, the application in form No. 10AB seeking exemption u/s 80G is liable to be rejected
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 2.3 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). The ld.AR of the assessee submitted that the appeals may be set aside to the file of the ld. CIT(E) to pass order after providing sufficient opportunity of being heard and to consider the certificate under RPT Act, 1959 as the assessee trust has been granted certificate under Rajasthan Public Trust Act, 1959 on 6-02-2025 by Office of Asstt. Commissioner , Devsthan Vibhag, Bharatpur Khand, Bharatpur. 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 as the assessee was ex-parte before the ld. CIT(E). 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 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 was that SHRI RADHARANI JAN KALYAN SEWA SANSTHAN VS CIT (E), JAIPUR the assessee may be provided one more chance to adduce the documents before the ld. CIT(E) to resolve the issue in question and the assessee trust has obtained Registration under Rajasthan Public Trust, 1959 on 06-02-2025 from the office of the Assistant Commissioner, Devsthan Vibhag, Bharatpur. As regards the other queries like Incomplete Form 10AB and genuineness of activities and non-compliance, the assessee trust is directed to submit all the desired documents before the ld. CIT(A) with a view to resolving the issue. 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 documents relating to Incomplete Form 10B and the genuineness of the activities etc. 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.
SHRI RADHARANI JAN KALYAN SEWA SANSTHAN VS CIT (E), JAIPUR 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.