AMRUTLAL V. PAREKH TRUST,RAJKOT vs. THE CIT (EXEMPTION), AHMEDABAD, RAJKOT
Facts
The assessee, Amrutlal V. Parekh Trust, applied for registration under section 12A(1)(ac)(iii) of the Income-tax Act, 1961, but the CIT(E) rejected the application. The rejection was based on the assessee's alleged failure to prove the genuineness of its activities and their consonance with the trust's objects, leading to an ex-parte order despite the assessee submitting various documents and replies to notices.
Held
The Tribunal noted that the CIT(E) did not properly examine the documents submitted by the assessee and failed to furnish the Inspector's report, thereby violating the principles of natural justice. Consequently, the matter was remitted back to the CIT(E) for fresh adjudication, with directions to examine all submitted documents and evidences to grant registration in accordance with law.
Key Issues
Whether the CIT(E)'s rejection of the assessee's registration application under section 12A(1)(ac)(iii) was justified, given the alleged failure to examine submitted documents and violation of natural justice.
Sections Cited
12A(1)(ac)(iii)
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Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT
Before: DR. ARJUN LAL SAINI & SHRI DINESH MOHAN SINHA
आयकर अपील�य अ�धकरण, राजकोट �यायपीठ, राजकोट। IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT BEFORE DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER AND SHRI DINESH MOHAN SINHA, JUDICIAL MEMBER आयकर अपील सं/.ITA No.828/RJT/2024 �नधा�रणवष�/ Assessment Year: -N.A. Amrutlal V. Parekh Trust The CIT (Exemption) बनाम C/o. Jain Balashram Ahmedabad. 8-Rajputpara Vs. Rajkot. PAN : AAATA 2806 L (अपीलाथ�/Appellant) : (��यथ�/Respondent) �नधा�रती क� ओर से/Assessee by : Shri D.M. Rindani, ld.AR राज�व क� ओर से/Revenue by : Shri Sanjay Punglia, ld.CIT(DR)
सुनवाई क� तार�ख /Date of Hearing : 22/01/2025 घोषणा क� तार�ख /Date of Pronouncement : 28/02/2025 ORDER PER DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER;
Captioned appeal filed by the assessee, is directed against the order passed by the Learned Commissioner of Income Tax (Exemption), Ahmedabad [in short ‘Ld.CIT(E)], vide his order dated 30.8.2024, wherein the ld.CIT(E) rejected the assessee’s application in Form No.10AB under section 12A(1)(ac)(iii) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) stating that the assessee has failed to prove genuineness of the activities, and also failed to prove whether the activities of the trust are in consonance with the objects of the Trust.
Shri Amrutlal V. Parekh Trust Vs. The CIT(E) ITA No.828/RJT/2024 2 2. At the outset, the ld.Counsel for the assessee begins by pointing out that during the proceedings before the ld.CIT(E) required details and documents were submitted, before him. However, the ld.CIT(E) has denied the registration merely on the fact that the assessee failed to submit the required details and documents before him, and passed the ex-parte order. The ld.Counsel stated that during the proceeding before the ld.CIT(E), the ld.CIT(E) issued notice to the assessee, which is placed at paper book Page no.114. In response to the notice, the assessee submitted its reply along with documents and evidences, which is placed at paper book Page No.120. The ld.CIT(E) also issued final show cause notice which is placed at paper book Page No.136 and in response to the final show -cause notice, the assessee submitted its reply along with documents and evidences, which is placed at paper book Page No.138. Therefore, whatever documents were required by the ld.CIT(E) were produced before him. However, it may be possible that these documents have not been accessed by the ld.CIT(E) or the ld.CIT(E) might have not seen the reply of the assessee. Therefore, the ld.Counsel contended that the matter may be remitted back to the file of the ld.CIT(E) with the direction to examine the required docuemnts and evidences, which have already been filed before him, and grant the registration in accordance with law.
On the other hand, the ld.DR for the Revenue did not raise any objection if the matter is remitted back to the file of the ld.CIT(E) for fresh adjudication.
We have heard both the parties and perused the material available on record. We note that during the proceedings before the ld.CIT(E) inquiry was conducted in the premises of the assessee-trust, and the Inspector was appointed. However, the report of the Inspector was never furnished to the assessee, and the ld.CIT(E) never asked the assessee to submit any rejoinder in respect of the report of the Inspector. Therefore, it is against the principle of
Shri Amrutlal V. Parekh Trust Vs. The CIT(E) ITA No.828/RJT/2024 3 natural justice, and hence it is not tenable in the eyes of the law. Therefore, we are of the view that until and unless, an opportunity of cross examination is granted, such adverse material “Inspector of report” can not be used against the assessee. We also find that the assessee has submitted the required evidences and documents before the ld.CIT(E). However, the ld.CIT(E) did not examine these documents/ evidences which were submitted by the assessee. Therefore, in the interest of justice, we remit this issue back to the file of the ld.CIT(E) with the direction to ld.CIT(E) to examine the documents and evidences filed by the assessee, and grant the registration in accordance with law. The assessee is also directed to submit the required documents/evidences physically before the ld.CIT(E) as and when called for. Therefore, for the statistical purpose, the appeal of the assessee is treated to be allowed. 5. In the result, the appeal of the assessee, is allowed for statistical purpose. Order is pronounced in the open court on 28/02/2025 Sd/- Sd/- (DINESH MOHAN SINHA) (DR.ARJUNLAL SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER राजकोट /Rajkot िदनांक/ Date: 28/02/2025 *vk आदेश क� �ितिलिप अ�ेिषत/ Copy of the order forwarded to : अपीलाथ�/ The Appellant ��यथ�/ The Respondent आयकर आयु�/ CIT आयकर आयु�(अपील)/ The CIT(A) िवभागीय �ितिनिध, आयकर अपीलीय आिधकरण, राजकोट/ DR, ITAT, RAJKOT गाड�फाईल/ Guard File By order/आदेशसे , Assistant Registrar/Sr. PS/PS ITAT, Rajkot
