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Facts
The assessee's application for registration under section 12AB of the Income Tax Act, 1961, was rejected by the CIT(E) on the grounds that the assessee had claimed deduction under section 11, making the provisions of section 12A(1)(ac)(vi)(B) inapplicable. The CIT(E) also cited discrepancies and non-compliance with notices.
Held
The Tribunal noted that similar appeals had been allowed previously. Following the same, the Tribunal found the facts and grounds raised by the assessee to be similar and allowed the appeal.
Key Issues
Whether the CIT(E) was justified in rejecting the application for registration under section 12AB solely because the assessee claimed deduction under section 11, rendering certain provisions inapplicable.
Sections Cited
12AB, 12A(1)(ac)(vi)(B), 11
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, NAGPUR BENCH, NAGPUR
Before: SHRI V. DURGA RAO & SHRI K.M. ROY, ACCOUNTANT, MEMBER
Date of Hearing – 23/01/2025 Date of Order – 29/01/2025
O R D E R PER K.M. ROY, A.M.
The captioned appeal by the assessee is emanating from the impugned order dated 13/09/2024, passed by the learned Commissioner of Income Tax (Exemption), Pune, [“learned CIT(E)”].
In its appeal, the assessee has raised following grounds:
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1. On the facts and circumstances of the case the learned Commissioner of Income tax (Exemption) was not justified in rejecting the application in Form 10AB for grant of registration u/s 12AB of the Act without properly appreciating the facts of the case.
2. On the facts and in the circumstances of the case, the order of the ld. CIT (Exemption) rejecting the registration under sec. 12AB of the Income-tax Act, 1961 dated 13.09.2024 is unjustified and against the principles of natural justice as it was passed without giving any cogent reasons and was rejected on technical grounds which is against the sprit of section 12 of the IT Act.
2 Baliraja Bahuuddeshiya Seva Sanstha ITA no.562/Nag./2024
3. On the facts and circumstances of the case the learned Commissioner of Income tax (Exemption) was not justified in rejecting the application in Form 10AB for grant of registration u/s 12AB of the Act by wrongly observing that provisions of sections u/s 12A(1)(ac) (vi) of the Income-tax Act, 1961 was not applicable without giving any reasons and hence order passed by the respondent is bad in law and may kindly be quashed.
4. On the facts and circumstances of the case the learned Commissioner of Income tax (Exemption) was not justified in rejecting the application in Form 10AB for grant of registration u/s 12AB of the Act without appreciating the facts that during the period in which deduction under section 11 was claimed appellant is having valid registration and therefore exemption was claimed which is as per law.
5. The appellant craves for leave to amend, add to or omit any ground up to the time of hearing of the appeal.
The learned Authorised Representative appearing for the assessee invited our attention to Para–4 to 8 of the impugned order of rejection, which are reproduced below:– “4 On verification of the details submitted by the assessee in response to the said notice and the documents submitted along with the application, various discrepancies were noticed. Another notice was then issued to the assessee on 26/08/2024 and the discrepancies were duly communicated to it as reproduced below: "(i) As per financial statements and ITRs furnished by you, it is seen that the trust has claimed deduction u/s 11. Therefore, said provisions of sec. 12A(1)(ac) (vi) (B) of the Act are not applicable to your case. As such, your present application is liable to be rejected. Please clarify with supporting documents."
5. The assessee was requested to show cause as to why the application should not be rejected and why the approval granted under section 12AB of the Income Tax Act, 1961 should not be cancelled. The assessee was also given opportunity of being heard vide the said notice. The assessee was specifically informed that in the event of failure to comply by the due date, the application shall be liable to be rejected and the approval shall also be liable to be cancelled. The compliance to the said notice was due on 02/09/2024. The notice was duly served on the assessee through e-portal and email.
The assessee submitted the documents on 02/09/2024. However, the assessee's contention is not acceptable.
Further, without prejudice to the above and as per financial statements and ITRs furnished by the assessee, it is seen that the trust has claimed deduction u/s 11. Therefore, said provisions of sec.12A(1)(ac)(vi) (B) of the Act are not 3 Baliraja Bahuuddeshiya Seva Sanstha ITA no.562/Nag./2024
applicable in the assessee's case. As such, the undersigned is left with no alternative but to reject the application. 8. In view of the above, the application filed by the assessee under section 12A(1)(ac) (vi)-ITEM(B) of the Income Tax Act, 1961 is hereby rejected.”
We note that we have already allowed similar appeal being Nag./2024. Following the same, since facts are similar and identical, the grounds raised by the assessee are allowed.
In the result, appeal by the assessee is allowed. Order pronounced in the open Court on 29/01/2025