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Facts
The assessee filed applications for registration under Section 12AB and approval under Section 80G. The CIT (E) rejected the provisional registration and the application for approval, citing various grounds including an incomplete form and non-registration under a state act.
Held
The Tribunal held that the CIT erred in rejecting the applications. The cancellation of provisional registration was found to be premature and without proper grounds. The Tribunal restored the matters to the CIT for fresh adjudication.
Key Issues
Whether the CIT was justified in rejecting the assessee's applications for registration under Section 12AB and approval under Section 80G based on the cancellation of provisional registration.
Sections Cited
12AB, 12A, 80G, 12AB(1)(b)(ii)(B), 12A(1)(ac)(iii), 80G(5)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, JAIPUR BENCH “A”, JAIPUR
Before: SHRI GAGAN GOYAL & SHRI NARINDER KUMAR
These two appeals by assessee are directed against the order of CIT (E), Jaipur dated 18.12.2024 passed u/s. 12AB(1)(b)(ii)(B)and 80G (5)of the Income Tax Act, 1961 (in short ‘the Act’). the assessee has raised the following grounds of appeal: -
The Ld. CIT (E) has erred on facts and in law in refusing to grant registration u/s. 12AB of the Act to the assessee solely on the ground that once provisional registration was cancelled vide order dt. 05.03.2024, the application filed u/s. 12A (1) (ac)(iii) dt. 30.06.2024 is infructuous as non-maintainable.
2. The appellant craves to alter, amend and modify any ground of appeal.
3. Necessary cost be awarded to the assessee.
The assessee filed an application in Form No. 10AB seeking registration u/s. 12AB of the Act vide dated: 30.06.2024. During the proceedings, it was observed by the Ld. CIT (E), Jaipur that the registration of the assessee as provisional registration u/s. 12A (1) (ac) (iii) of the Act was also rejected vide order dated: 05.03.2024 on the following grounds: -
A). Incomplete Form 10AB; B). Non-Registration under the Rajasthan Public Trust Act, 1959 and C). Genuineness of Activities. It is observed that there is no substantive requirement in law to have provisional registration and then only final registration can be granted. The provision of issuing provisional registration first and then regularizing the same with final registration is only a procedural requirement and can’t override the substantive procedure of law. No doubt, the Ld. CIT (E), Jaipur failed to understand the nuances of the law in this respect. Secondly, a strange hurry in this matter was shown by the Ld. CIT(E), Jaipur in cancelling the provisional registration on 05.03.2024, as the same was valid till 31.03.2024 and the assessee was entitled to file an application for regularization of the same on or before 31.03.2024.
It is further observed that the provision of law w.r.t. registration u/s. 12AB of the Act nowhere stops the Ld. CIT (E), Jaipur to issue provisional registration again u/s. 12A (1) (ac)(iii) of the Act (if his version is assumed correct) and then proceed to verify the claim of the assessee w.r.t. final permanent registration u/s. 12AB(1)(b)(ii)(B) of the Act. It is astonishing that the Ld. CIT (E), Jaipur himself withdraws the provisional registration of the assessee suo-moto before 31.03.2024 (provisional registration would have been infructuous automatically after 31.03.2024) without assigning any reason and show cause and then uses the same for denying the registration on the application filed by the assessee u/s. 12A (1) (ac)(iii)/ 12AB(1)(b)(ii)(B) of the Act.
In view of the above, the matter is restored back to the file of the Ld. CIT (E), Jaipur for fresh adjudication keeping in view the provisions of law and law pronounced by this bench after giving the assessee a fresh opportunity of being heard and the assessee is directed to be vigilant and cooperative enough in concluding the hearings before the Ld. CIT (E), Jaipur.
In the result, the appeal of the assessee is allowed for statistical purposes. the assessee has raised the following grounds of appeal:
1. The Ld. CIT(E) has erred on facts and in law in rejecting the application filed by the assessee in Form No. 10AB seeking approval under clause (iii) of first proviso to section 80G (5) of IT Act, 1961 on the ground that approval u/s. 80G cannot be granted without registration u/s. 12AB.
2. The appellant craves to alter, amend and modify any ground of appeal.
3. Necessary cost be awarded to the assessee.
The outcome of this appeal fully dependent on the outcome of the appeal adjudicated (supra). The Ld. CIT (E), Jaipur is directed once the registration to the assessee is granted u/s. 12AB, there is no further requirement in the law and simultaneous registration for the purposes of section 80G (5) of the Act is to be granted. Matter is restored back to the file of the Ld. CIT(E), Jaipur for fresh adjudication keeping in view the provisions of law and law pronounced by this bench after giving the assessee a fresh opportunity of being heard and the assessee is directed to be vigilant and cooperative enough in concluding the hearings before the Ld. CIT(E), Jaipur.
In the result, the appeal of the assessee is allowed for statistical purposes.
In the result, both the appeals of the assessee are allowed for statistical purposes.
The Order is pronounced in the open court on the 24th day of April 2025.