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Facts
The assessee filed four appeals against orders of the CIT(E) rejecting their applications for registration under Section 12AB and approval under Section 80G of the Income Tax Act, 1961. The CIT(E) had rejected the applications on grounds of incomplete documentation, issues with Rajasthan Public Trust Act registration, and genuineness of activities.
Held
The Tribunal condoned the delay in filing the appeals and restored the matters to the file of the CIT(E). The CIT(E) is directed to decide the applications afresh after the assessee provides the necessary documentation and fulfills the conditions required for registration and approval.
Key Issues
Whether the CIT(E) rightly rejected the application for registration and approval without proper inquiry, and whether the delay in filing appeals can be condoned.
Sections Cited
12AA, 80G, 12A, 12AB, 80G(5)
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Income Tax Appellate Tribunal, JAIPUR BENCHES,”B” JAIPUR
Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA No. 837 & 838/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 23-02-2024 passed under section 12AA 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. 838, 839 & 840/JP/2024 SANKIRTANA MOVEMENT TRUST VS CIT (E), JAIPUR 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 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 80G of I.T. Act, 1961 1. That the order passed by ld. CIT(E), Jaipur by rejecting application u/s 80G(5)(iii) of the Act 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 838, 839 & 840/JP/2024 SANKIRTANA MOVEMENT TRUST VS CIT (E), JAIPUR 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.
3. That the order passed by ld. CIT(E), Jaipur by rejecting provisional approval u/s 80G(5)(iii) of the Act is wrong, unwarranted and bad in law. Kindly direct to register the same.
2.1 At the outset of the hearing, the Bench noticed that there is delay of 38 days in appeals u/s 12A and 39 days delay in appeals u/s 80G of the Act for which the ld.AR of the assessee has filed an application dated 28-01- 2025 for condonation of delay in connection with above mentioned appeals narrating therein as under:- ‘’1. That the assessee trust filed 4 appeals on 010-06- 2024 against the ex-parte order passed by ld. CIT(E), Jaipur on rejection of registration u/s 12A and rejection of approval u/s 80G of the I.T. Act, 1961 with a delay of 39 days. Simultaneously, by the same rejection orders the ld CIT(E), Jaipur cancelled the provisional registration / approval granted by the PCIT/CIT,CPC, hence total 4 appeals were filed, which are as follows:- S.N. Particular Appeal No.
Registration Order u/s 12A registration (i.e. u/s 12A(1)(ac)(iii) 2. Cancellation order of 838, 839 & 840/JP/2024 SANKIRTANA MOVEMENT TRUST VS CIT (E), JAIPUR provisional registration u/s 12A (i.e. u/s 12A(1)(ac)(vi) 3. Rejection order u/s 80G ITA No. 839/JPR/24 approval (i.e. 80G(5)(iii) 4. Cancellation order of ITA No. 840/JPR/24 provisional approval u/s 80G (i.e. 80G(5)(iv) 2. That the delay of 39 days in filing of appeals was due to as there are many recent changes in trust related laws as:- (i) Whether the registration under RPT Act, 1959 is must of not . (ii) Whether, what is the exact legal remedy available to the trust viz. reapply or appeal. (iii) Any many more other issues.
That thereafter after taking proper legal advice that the proper remedy with us is to file appeal before ITAT, we engager a counsel and prepare appeal and filed the same before Hon’ble ITAT, Jaipur Bench on 01-06-2024 (i.e. with a delay of 39 days) 4. Therefore, the delay in filing of appeal was due to confusion of non-clarity about the exact and right legal remedy available to the trust viz. reapply or appeal. Therefore, the same can be treated as sufficient cause for delay in filing of appeal. In view of above submission, you are requested that kindly consider this as reasonable cause to condone the delay and kindly remand back the case to CIT(E), Jaipur, so that proper inquiry can be conducted and substantial justice may be delivered to the appellant.’’ 838, 839 & 840/JP/2024 SANKIRTANA MOVEMENT TRUST VS CIT (E), JAIPUR 2.2 On the other hand, the ld. DR objected to such delay in filing the appeals by the assessee and submitted that the Court may decide it as deemed fit and proper in the case of the assessee. 2.3 After hearing both the parties and perusing the materials available on record, the Bench noted that there is no force in the submissions of the ld. AR of the assessee as to the conodonation of delay in filing the above appeals. Hence, the Bench does not find sufficient cause whereby the assessee was prevented in late filing the appeals. Thus the applications for condonation of delay made by the assessee are dismissed. However, the Bench feels that with a view to providing the substantial justice to the assessee, the appeals are heard on merit. 3.1 Apropos to the ground so raised by the assessee in and 838/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 Rajasthan Public Trust Act, 1959 Genuineness of Activities.
6. 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 838, 839 & 840/JP/2024 SANKIRTANA MOVEMENT TRUST VS CIT (E), JAIPUR 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 lapsed and cancelled.
3.2 Apropos to the ground so raised by the assessee in & 840/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 24-03-2023 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.’’ 838, 839 & 840/JP/2024 SANKIRTANA MOVEMENT TRUST VS CIT (E), 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 Rajasthan Public Trust Act, 1959 Genuineness of Activities.
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 838, 839 & 840/JP/2024 SANKIRTANA MOVEMENT TRUST VS CIT (E), 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 12AA 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 before the ld CIT(E) 3.6 Since we have restored the appeals of the assessee with regard to the registration u/s 12AA 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.
838, 839 & 840/JP/2024 SANKIRTANA MOVEMENT TRUST VS CIT (E), JAIPUR 4.0 In the result, the appeals of the assessee are allowed for statistical purposes. Order pronounced in the open court on 04 /02/2025 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:- 04 /02/2025 *Mishra आदेश की प्रतिलिपिअग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू The Appellant- M/s. Sankirtana Movement Trust, 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.837, 838, 839 & 840/JPR/2024) vkns'kkuqlkj@ By order,
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