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Facts
The assessee, a charitable trust, applied for registration under sections 80G and 12AB of the Income Tax Act. The CIT(Exemption) rejected the applications for want of prosecution after the assessee failed to provide necessary documents and explanations despite several opportunities.
Held
The Tribunal noted that the orders passed by the CIT(Exemption) were ex-parte and that the assessee had not fully complied with the notices. However, in the interest of justice, the Tribunal decided to set aside the impugned orders.
Key Issues
Whether the CIT(Exemption) was justified in rejecting the applications for registration due to non-prosecution without affording adequate opportunity.
Sections Cited
80G, 12AB
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Income Tax Appellate Tribunal, KOLKATA-CUTTACK ‘e-COURT’, KOLKATA
Before: Shri Duvvuru RL Reddy, Vice-(KZ) & Shri Rakesh Mishra
Per Duvvuru RL Reddy, Vice-President (KZ):- Both the appeals bearing 169/CTK/2025 are directed at the instance of assessee against the orders of ld. Commissioner of Income Tax (Exemption), Hyderabad both dated 7th December, 2024 passed for the assessment year & 169/CTK/2025 (A.Y. 2025-2026) Pallishree 2025-26 on the application of the assessee filed in Form No. 10AB for registration under clause (iii) of second proviso to sub-section (5) of section 80G and 12AB of the Income Tax Act. In other words, the ld. CIT(Exemption) has rejected the applications of the assessee for grant of registration under section 12AB on account of non-prosecution of the applications.
Brief facts of the case are that the assessee is a Charitable Trust and engaged in various charitable activities, like relief of the Poor Education, Medical Relief, Preservation of Environment (including watersheds, forests and wildlife). Notices were issued in respect of proceedings under section 80G(5)(iii) of the Act to the address of the assessee mentioned in the Form No. 10AB to produce the copy of Memorandum of Association/Trust Deed for verification and to furnish a detailed reply on the specific information called for in the said notices. In response to the notices, the assessee-Trust submitted partial information only. Thereafter notice dated 26.11.2024 was issued to the assessee as a final opportunity to submit the cash flow statement, copy of latest three months GST returns, list of donors in respect to 80G claim and the expenditure incurred for the objectives as per Trust Deed/MOA., but there was no compliance to the notice.
The ld. CIT(Exemption) has given several opportunities to the assessee to substantiate its claim, but the appellant neither filed the written submission nor represented the case before the ld. CIT(Exemption). The ld. CIT(Exemption) passed the ex-parte orders both dated 07.12.2024 dismissing the appeals of the assessee.
& 169/CTK/2025 (A.Y. 2025-2026) Pallishree
Dissatisfied with the decision of the ld. CIT(Exemption), the assessee preferred appeals before the Tribunal.
At the time of hearing, ld. Counsel for the assessee prayed before the Bench that the impugned orders be set aside and remitted back to the file of ld. CIT(Exemption) for deciding it afresh.
The ld. D.R., on the other hand, submitted that the assessee should be more vigilant about its obligation towards prosecuting income tax proceedings. He argued to uphold the orders passed by the ld. CIT(Exemption).
We have duly considered the rival contentions and gone through the record carefully. The impugned orders are ex-parte orders wherein applications of the assessee for grant of registration under section 12AB have been rejected for want of prosecution. In the interest of justice, we deem it appropriate to set aside the orders and remit the issue to the ld. CIT(Exemption) for fresh adjudication.
In the result, both the appeals of the assessee are allowed for statistical purposes. Order pronounced in the open Court on 26/05/2025.