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Facts
The assessee, Setu Sansthan, filed four appeals against orders from the CIT(E) rejecting provisional registration under Section 12AB and provisional approval under Section 80G of the Income Tax Act, 1961. The CIT(E) rejected these applications citing reasons such as incomplete Form 10AB, lack of registration under the Rajasthan Public Trust Act, 1959, and non-genuineness of activities, along with the absence of a separate DIN for the rejection order as per CBDT circulars. The assessee contended that they were not provided adequate opportunity of being heard and that they are in the process of obtaining registration under the Rajasthan Public Trust Act, 1959.
Held
The tribunal, noting the lack of adequate opportunity of hearing and the assessee's ongoing efforts to obtain registration under the Rajasthan Public Trust Act, 1959, restored all appeals to the file of the CIT(E) for fresh adjudication. The CIT(E) was directed to decide the applications afresh after the assessee produces the required registration and other documents, ensuring a proper opportunity of being heard. The outcome of the appeals for Section 80G was deemed consequential to the Section 12AB registration.
Key Issues
Whether the CIT(E) erred in rejecting provisional registration under Section 12AB and provisional approval under Section 80G without providing adequate opportunity of hearing or following proper procedure, including the issuance of a DIN.
Sections Cited
12AB, 80G, 12A, 80G(5)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, JAIPUR BENCHES,”A” JAIPUR
Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA No. 1567 & 1568/JP/2024
ORDER PER: DR. S. SEETHALAKSHMI, J.M. These are four appeals filed by the assessee against two different orders of the Ld.CIT (Exemption), Jaipur dated 09-12-2024 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:-
1. U/S 12AB of I.T. Act, 1961 1. That the ld. CIT(E), Jaipur has erred in law and in facts of the case by neither recording the independent satisfaction for rejection of provisional registration and nor issued show cause notice for rejection of provisional registration u/s 12A of the Act which is wrong, unwarranted and bad in law. Kindly restore the same.
2. That the ld. CIT(E), Jaipur has erred in law and in facts of the case in rejecting the provisional registration u/s 12A without issuing separate DIN of the rejection order, which is against the circular and notification issued by the CBDT. So, the same is wrong, unwarranted and bad in law. Kindly restore the same.
3. That the order passed by ld CIT(E), Jaipur by rejecting provisional registration u/s 12A of the Act is wrong, unwarranted and bad in law. Kindly restore the same.
U/S 12AB of I.T. Act, 1961 ‘’ That the order passed by the ld. CIT(E),Jaipur by rejecting application u/s 12AB(1)(b) of the I.T. Act, 1961 is wrong, unwarranted and bad in law. Kindly direct to register the same.
U/S 80G of I.T. Act, 1961 1. That under the facts and in the circumstances of the case, 1568, 1565, 1566/JP/2024 SETU SANSTHAN VS CIT (EXEMPTION), JAIPUR the ld. CIT(E), Jaipur rejected the application u/s 80G(5)(iii) of the Act which is wrong, unwarranted ad bad in law. Kindly direct to register the appellant U/S 80G of I.T. Act, 1961 1. That the ld. CIT(E), Jaipur has erred in law and in facts of the case by neither recording the independent satisfaction for rejection of provisional approval and nor issued show cause notice for rejection of provisional approval u/s 80G of the Act which is wrong unwarranted and bad in law. Kindly restore the same.
That the ld. CIT(E), Jaipur has erred in law and in facts of the case by rejecting the provisional approval u/s 80G without issuing separate DIN of the rejection order which is against the circular and notification issued by the CBDT. So, the same is wrong, unwarranted and bad in law. Kindly restore the same.
That the order passed by ld. CIT(E), Jaipur by rejecting provisional approval u/s 80G of the I.T. Act, 1961 is wrong, unwarranted and bad in law. Kindly direct to register the same.
3.1 Apropos to the ground so raised by the assessee in and 1568/JP/2024, 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 the above discussion assessee’s claim of registration u/s 12AB is liable to be rejected and thus being rejected on following grounds:- Incomplete Form 10AB Registration under Rajasthan Public Trust Act, 1959
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 27-09-2023 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 lapsed and cancelled.’’ 3.2 Apropos to the ground so raised by the assessee in & 1566/JP/2024, the ld. CIT(E) rejected the assessee’s claim of exemption u/s 80G of the Act by observing as under:- ‘’03. 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
Further 2nd proviso to Section 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’s provisional approval under clause (iv) of first proviso to sub-section (5) of Section 80G of the Income Tax Act, 1961 dated 28-09-2023 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.’’ 1568, 1565, 1566/JP/2024 SETU SANSTHAN VS CIT (EXEMPTION), JAIPUR 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 orders should be quashed being ex- parte orders and against the principles of natural justice. Further, the ld. AR of the assessee stated at Bar that the assessee trust is in the process of applying the registration under RPT Act before the competent authority and it is likely to get the same. 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). 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 on following grounds:-
Incomplete Form 10AB Registration under Rajasthan Public Trust Act, 1959 Non Genuineness of Activities and non compliance.
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 1568, 1565, 1566/JP/2024 SETU SANSTHAN VS CIT (EXEMPTION), JAIPUR to give proper justification for regularization of provisional registration. It may be noted that the ld.AR of the assessee submitted that the assessee trust has applied for registration under RPT Act, 1959 before the competent authority and the assessee trust is likely to get the same. . 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 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 appeals 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 appeals of the assessee u/s 80G of the Act are 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.
4.0 In the result, the appeals of the assessee are allowed for statistical purposes. Order pronounced in the open court on 24 /04/2025 Sd/- Sd/- ¼jkBksM deys'kt;UrHkkbZ ½ ¼MkWa-,l-lhrky{eh½ (RATHOD KAMLESH JAYANTBHAI) (Dr. S. Seethalakshmi) ys[kk lnL; @Accountant Member U;kf;dlnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 24 /04/2025 *Mishra आदेश की प्रतिलिपिअग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू The Appellant- M/s. Setu Sansthan, Jaipur 1. 2. izR;FkhZ@ The Respondent- The CIT(E), Jaipur 3. vk;djvk;qDr@ The ld CIT 4. विभागीय प्रतिनिधि] आयकरअपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. xkMZQkbZy@ Guard File (ITA No.1567, 1568, 1566 & 1567/JPR/2024) vkns'kkuqlkj@ By order,
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