SIDHI WELFARE SOCIETY,PATNA vs. CIT EXEMPTION, PATNA

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ITA 341/PAT/2023Status: DisposedITAT Patna03 April 2025AY 2023-245 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal considered the submissions and, in the interest of justice and fair play, found that the rejection of the application was made on account of non-compliance. The Tribunal decided to provide another opportunity to the assessee. Consequently, the order of the Ld. CIT (Exemption) cancelling the provisional registration and denying the final registration was set aside. The matter was remanded back to the Ld. CIT (Exemption) for deciding the application afresh after granting an opportunity of being heard. The Tribunal directed that the assessee shall not seek unnecessary adjournments and shall file the required details, which shall be considered while deciding the application. The ratio of this decision is that where an application for registration is rejected due to non-compliance, and the assessee provides a reasonable explanation for the non-compliance and requests an opportunity to be heard, the matter should be remanded back to provide such an opportunity in the interest of justice.

What were the facts?

The assessee, Sidhi Welfare Society, filed an appeal before the Income Tax Appellate Tribunal (ITAT), Patna Bench at Kolkata, challenging an order passed by the Commissioner of Income Tax (Exemption), Patna. The assessment year in question is 2023-24. The order under challenge pertains to the rejection of the assessee's application for registration under Section 12A(1)(ac)(iii) of the Income Tax Act, 1961, and the cancellation of its provisional registration granted under Section 12A(1)(ac)(vi). The Ld. CIT (Exemption) rejected the application and cancelled the provisional registration due to the assessee's alleged non-compliance with notices and failure to furnish required documents, leading to an inference that the assessee had not maintained books of account and failed to prove the genuineness of its activities. The assessee contended that the order was passed ex parte and that subsequent notices could not be complied with due to the office bearers being on vacation and busy with school matters.

What were the issues?

1. Whether the order passed by the Commissioner of Income Tax (Exemption), Patna, rejecting the application for registration under Section 12A(1)(ac)(iii) and cancelling the provisional registration under Section 12A(1)(ac)(vi) of the Income Tax Act, 1961, is bad in law and on facts, considering the opportunity provided to the assessee. Assessee's contentions: The assessee argued that the order was passed ex parte and that sufficient opportunity to present its contentions was not provided. It was submitted that while earlier notices were complied with, subsequent notices could not be complied with due to the office bearers being on vacation during Durga Puja and being busy with school matters. The assessee requested that the matter be remanded back to grant an opportunity to file the required details. Revenue's contentions: The judgment does not record specific contentions from the revenue.

Which sections of the Income-tax Act were involved?

Section 12A(1)(ac)(iii),Section 12A(1)(ac)(vi),Section 12AB

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PATNA BENCH AT KOLKATA

Before: SHRI SONJOY SARMA

PER RAKESH MISHRA, ACCOUNTANT MEMBER:

This appeal filed by the assessee is against the order of the Ld. Commissioner of Income Tax (Exemptions)-Patna [hereinafter referred to as the “Ld. CIT (Exemption)”] passed in respect of registration u/s 12A(1)(ac)(iii) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for AY 2023-24 dated 02.08.2023. I.T.A. No.: 341/PAT/2023 Assessment Year: 2023-24 Sidhi Welfare Society.

2.

The assessee is in appeal before the Tribunal raising the following

grounds of appeal:

“1. For that the grounds of appeal hereto are without prejudice to each other.

2.

For that the order dated 09.11.2023 bearing DIN & Order No: ITBA/ EXM/F/ EXM45/2023-24/ 1057837096(1) in Form 10AD passed under Section 12AB of the Income Tax Act, 1961 (hereinafter called the Act) by the Commissioner of Income Tax, Exemption, Patna (hereinafter called the Adjudicating Authority), is bad both in law and on facts.

3.

For that the appellant was not given sufficient opportunity to put forth his contentions.

4.

For that the order of the Id. Adjudicating Authority is based on presumption, surmises and conjectures.

5.

For that the order of the Id. Adjudicating Authority is wholly perverse in as much as the same are contrary to and at variance with the materials available on record.

6.

For that the Id Adjudicating Authority has erred in not serving the notice of hearing to the appellant.

7.

For that the Id. Adjudicating Authority has erred in rejecting the application filed for grant of registration under sub clause (iii) of clause (ac) of sub-section (1) of section 12A of the Act.

8.

For that the Id. Adjudicating Authority has erred in cancelling the provisional registration granted u/s 12A(1)(ac) (vi) in Form 10AC dated 28.03.2022 with Unique Registration Number-AAAT17863FE20212 for AY 2023-24 to AY 2025-2026. 9. For that the appellant shall place any other point/points at the time of hearing of the appeal.”

3.

Brief facts of the case are that the assessee had been issued Form No.10AC vide which provisional registration was granted on 28.02.2023 which was valid from AY 2023-24 to AY 2025-26. The assessee applied for registration u/s 12A(1)(ac)(iii) of the Act. The Ld. CIT (Exemption) enquired the assessee to furnish some documents vide notice issued on 02.08.2023. As per the order of the Ld. CIT (Exemption), no compliance

was made by the assessee. Therefore, he inferred that the assessee has I.T.A. No.: 341/PAT/2023 Assessment Year: 2023-24 Sidhi Welfare Society.

not been maintaining books of account and had failed to prove the genuineness of the activities as claimed to have been carried out in accordance with the objects of the Trust and since the activities were found to be not genuine, the application filed in Form No. 10AB for grant of regular registration under subclause (iii) of clause (ac) of sub-section (1) of section 12AC of the Act was rejected and the provisional registration granted u/s 12A(1)(ac)(vi) of the Act in Form No.10AC on 28.02.2023 for AY 2023-24 to AY 2025-26 was also cancelled. Aggrieved with the cancellation order for provisional approval and rejection of the grant of approval for registration, the assessee is in appeal before the Tribunal.

4.

Rival contentions were heard and the submissions made have been examined. It was submitted by the Ld. AR that the order of the Ld. CIT(Exemption) was ex parte and though earlier notice was complied with however, subsequent notices could not be complied with and the application was rejected. It was requested that the matter may be remanded back and an opportunity may be given to the assessee to file the details. Our attention was also drawn to page 3 para 3 of the order of the Ld. CIT (Exemption) in support of the claim that the letter was issued on 26.10.2023 for compliance by 06.11.2023 but without granting sufficient opportunity and without the assessee being able to submit the reply on account of the office bearers being on vacation of Durga Puja and also busy with school matter due to which the required details could not be filed, the application was rejected vide order dated 09.11.2023. It was submitted that if an opportunity is given, the required details available with the assessee will be filed and the matter

was requested to be remanded back to the Ld. CIT(Exemption).

I.T.A. No.: 341/PAT/2023 Assessment Year: 2023-24 Sidhi Welfare Society.

5S. We have considered the submission and find that in the interest of justice and fair play and considering the facts and circumstances of the case that the rejection of application was made on account of non- compliance made by the city, another opportunity may be provided to the assessee. Hence, the order of the Ld. CIT (Exemption) cancelling the provisional registration and denying the final registration is hereby set aside and the matter is remanded back to him for deciding the application afresh after granting another opportunity of being heard.

The assessee shall not seek unnecessary adjournments and shall file the required details, which shall be considered while deciding the application.

6.

In the result, the appeal filed by the assessee is allowed for statistical purposes.

Order pronounced in the open Court on 34 April, 2025. [Sonjoy Sarma] [Rakesh Mishra] Judicial Member Accountant Member

Dated: 03.04.2025

Bidhan (P.S.)

Page |

I.T.A. No.: 341/PAT/2023 Assessment Year: 2023-24 Sidhi Welfare Society.

Copy of the order forwarded to:

1.

AnNAWN

Sidhi Welfare Society, Rajendra Public School, Sidheshwar House, Mahatma Gandhi Nagar, Kankarbagh, Patna, Bihar, 800026. CIT, Exemption, Patna.

CIT(A)-

CIT-

CIT(DR), Patna Bench, Patna.

Guard File.

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By order

Assistant Registrar ITAT, Kolkata Benches Kolkata

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