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Facts
The Reddys Cultural Association applied for registration under Section 12AB of the Income Tax Act, 1961, which was rejected by the Commissioner of Income Tax (Exemptions) due to alleged non-compliance and failure to furnish necessary information and evidence. The assessee contended that all required information was already filed and sought more time to respond to the last notice.
Held
The Tribunal observed that the CIT(E)'s rejection was based on a lack of information rather than a conclusive finding on the merits of the application. Consequently, the Tribunal remanded the case back to the CIT(E) to provide the assessee with another opportunity to produce the necessary information and evidences for proper verification and adjudication.
Key Issues
Whether the Commissioner of Income Tax (Exemptions) was justified in rejecting the assessee's application for registration under Section 12AB of the Income Tax Act, 1961, for alleged non-compliance without providing adequate opportunity to furnish required information or considering documents already filed.
Sections Cited
12AB, 80G
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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) is not correct in rejecting the application made by the Assessee Society in Form 10AB u/s 12AB of the Income Tax Act, 1961; 2) The Learned Commissioner of Income Tax (Exemption) should appreciated the fact that the assessee had filed all information that has been required; 3) The Learned Commissioner of Income Tax (Exemption) should have appreciated that the assessee was seeking time on record for the last notice that was served calling for additional information; 4) The Learned Commissioner of Income Tax (Exemption) should not have rejected the application made by the Assessee Society in Form 10AB u/s 12AB of the Income Tax Act, 1961 in just a routine and casual manner without considering the merits; 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 though the assessee could not respond to the notice dated 12.11.2024, however, all the relevant and requisite information and evidences were already filed before the Ld.CIT(E). He has pointed out that due to change of the incumbent, the details and evidences already filed by the assessee could not be considered at the time of passing the impugned order. He has submitted that, once the assessee has produced all the details including financial statements, income and expenditure account, then the requisite details and evidences asked vide notice dated 12.11.2024 were already available before the Ld.CIT(E). Since there was no transaction attracting GST, therefore, the assessee has not filed any GST return. The Ld.AR has referred to para 3 of the impugned order and submitted that the application of the assessee was rejected for want of necessary information and evidence to verify the genuineness of the activity and expenditure of the assessee qua its objective. 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 of hearing to the assessee.
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. 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 12.11.2024 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, but all the relevant and requisite information and evidences were filed before the Ld.CIT(E). 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. There is no compliance from the assessee so far 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, 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.