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Facts
The assessee, Waltair Christian Assembly Trust, applied for registration under Section 12AB of the Income Tax Act, 1961. The Commissioner of Income Tax (Exemptions) rejected the application on the grounds that the assessee failed to furnish complete information and documentary evidence required to verify the genuineness of its activities and expenditures.
Held
The Income Tax Appellate Tribunal noted that the rejection was primarily due to non-submission of necessary information, not a conclusive finding on merits. Considering the assessee's readiness to provide the details, the Tribunal remanded the case back to the Ld.CIT(E) for fresh adjudication, granting the assessee another opportunity to furnish the required information and evidence.
Key Issues
Rejection of the application for registration under Section 12AB due to alleged non-furnishing of complete information and evidence required to verify the genuineness of the trust's activities and expenditure.
Sections Cited
12AB
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Visakhapatnam Bench, Visakhapatnam
Before: Shri Vijay Pal Rao & Shri Balakrishnan S.
(Appellant) (Respondent) निर्धाररती द्वधरध/Assessee by: Shri GVN Hari, AR रधजस् व द्वधरध/Revenue by: Dr.Satyasai Rath,CIT(DR) सुिवधई की तधरीख/Date of Hearing: 23/04/2025 घोर्णध की तधरीख/Date of 28/04/2025 Pronouncement: आदेश / ORDER PER. VIJAY PAL RAO, VICE PRESIDENT : This appeal filed by the assessee is directed against the order dated 10.12.2024 of Commissioner of Income Tax (Exemptions) [“Ld.CIT(E)”] passed u/s 12AB of the Income Tax Act, 1961 (“the Act”), whereby, the application of the assessee seeking registration u/s 12AB was rejected.
The assessee has raised the following grounds of appeal : i) The learned Commissioner of Income Tax (Exemption) has erred in rejecting the application made by the Assessee Trust in Form 10AB seeking registration 12AB of the Income Tax Act, 1961; 2) The Learned Commissioner of Income Tax (Exemption) should have allowed sufficient opportunity to the assessee to file the information required; 3) The Learned Commissioner of Income Tax (Exemption) should not have rejected the application made by the assessee in Form 10AB u/s 12AB of the Income Tax Act, 1961 in a very routine and casual manner without considering the merits; 4) The Learned Commissioner of Income Tax (Exemption) should have understood that the assessee is prevented by sufficient and reasonable cause in not able to comply with the letter issued; and 5) Any other matter that may be urged at the time of hearing of the appeal.
3. Learned AR of the assessee has submitted that the assessee has duly responded to the notices issued by the Ld.CIT(E) and furnished the requisite details, however, the last notice dated 11.11.2024 issued for furnishing certain other details and documentary evidences on or before 18.11.2024 could not be complied with by the assessee, as the assessee sought further time for furnishing requisite details and evidence. Learned AR has referred to the request of the assessee placed at page No.38 of the paper book that vide reply dated 05.12.2024, the assessee sought time upto 19.12.2024 for filing the requisite details and evidence, however, the Ld.CIT(E) passed impugned order dated 10.12.2024, without allowing further time to the assessee. He has referred to para 3 of the impugned order and submitted that the application of the assessee was rejected only on the ground that the assessee has not furnished the information to verify the genuineness of the activity and expenditure of the Trust towards its objectives. He has referred to the documents already furnished before the Ld.CIT(E), as placed in the paper book and submitted that the assessee submitted the financial statements, income and expenditure as well as the details of the charitable activities carried out by the assessee along with auditor’s report, however, the application of the assessee was rejected only due to the reason that the last notice issued by the Ld.CIT(E) was not complied with within the stipulated time period. Thus, he has pleaded that the matter may be remanded to the record of the Ld.CIT(E) for fresh consideration and adjudication after giving one more opportunity to the assessee to furnish requisite details.
On the other hand, the Ld.DR has relied upon the impugned order of the Ld.CIT(E) and submitted that the assessee was asked to furnish the details and evidence on or before 18.11.2024, but there was no response on behalf of the assessee. The request for seeking more time was also made on 05.12.2024, after the date of said compliance. Therefore, in the absence of the requisite details and evidence, it was not possible for the Ld.CIT(E) to verify the genuineness of the activity and the expenditure incurred towards the objectives of the assessee Trust.
We have considered the rival submissions as well as the material on record. The Ld.CIT(E) has mentioned in para 2 that notices were issued to the assessee to produce copies of Memorandum of Association/Trust deed for verification and to furnish a detailed reply on the specific information called for in the said notice. It is further noted by the Ld.CIT(E) that in response to the same, the assessee has submitted partial information only and therefore, another notice dated 11.11.2024 was issued to the assessee seeking other information as under : • The cash flow statement / financial statement indicated in the objectives of clause • Copy of latest 3 months GST returns • List of donors in respect to 80G claim • Furnish the documentary evidences with regard to expenditure incurred for the objectives as per trust deed/MOA.
In response to the said notice, the assessee did not make compliance and made a request on 05.12.2024 for granting more time upto 19.12.2024. However, the Ld.CIT(E) passed the impugned order on 10.12.2024. The Ld.CIT(E) has given the reasons for rejection of the application in para 3 as under :
“3. The assessee has not submitted any information so far, in reply to the above notice. In view of the above, as the application in form 10AB is to be decided in time bound manner and non submission of mandatory information to verify the genuineness of activities and expenditure of the trust towards its objective, the present application in form 10AB for registration u/s 12AB is herewith rejected.”
Thus, it is clear that no concluding finding is given by the Ld.CIT(E), but the application was rejected for want of necessary information and evidence to verify the genuineness of the activity and the expenditure incurred towards achieving its objectives. Hence, in the facts and circumstances of the case, when the assessee is ready to produce all the requisite details , the matter is remanded to the record of the Ld.CIT(E) for fresh adjudication, after giving one more opportunity to the assessee to produce the necessary information and the evidences for verification and examination.
In the result, appeal of the assessee is allowed for statistical purpose.
Order pronounced in the Open Court on conclusion of hearing on 28th April, 2025.