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Facts
The assessee's appeals are against orders of the CIT(E) rejecting their applications for registration under Section 12AB of the Income Tax Act, 1961. The assessee claims they were not given sufficient opportunity to present documents, while the revenue argues they were afforded opportunities but failed to comply.
Held
The Tribunal noted that the assessee was given limited opportunities to submit documents and a reply. Despite the CIT(E)'s observation of non-substantial charitable activities, the Tribunal restored the matter to the CIT(E) for fresh adjudication in the interest of natural justice.
Key Issues
Whether the CIT(E) properly afforded opportunities to the assessee before rejecting the application for registration under Section 12AB, and whether the rejection was based on a proper appreciation of facts and documents.
Sections Cited
12AB
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “CUTTACK” BENCH, CUTTACK
Before: SHRI GEORGE MATHAN & SHRI RAJESH KUMAR
Both the captioned appeals by the assessee are against the separate orders of the Ld. Commissioner of Income Tax (Exemption), Hyd [hereinafter referred to as “the Ld. CIT(E)”] dated 10.12.2024 passed vide Form 10AB and 10AD of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) in respect of rejection or cancellation for registration or approval of the Trust for AY 2024-25.
Shri P. K. Mishra, Advocate represented on behalf of the assessee and Shri Sanjay Kumar, CIT, DR appeared on behalf of the revenue.
It was submitted by the Ld. AR that the Ld. CIT(E) has rejected the application of the assessee in Form 10AB for registration u/s. 12AB of the Act without providing sufficient opportunity to the assessee. It was also submitted that the Ld. CIT(E) has also rejected the application for registration of the assessee without appreciating the facts. It was, thus, submitted that the matter may be restored to the file of the Ld. CIT(E) to decide the issue afresh enabling the assessee to file the relevant documents to substantiate its claim before the Ld. CIT(E).
In reply, the Ld. CIT, DR submitted that proper opportunities were allowed and the assessee could not produce the documents as required by the authority below. It was submitted that the order passed by the Ld. CIT(E) deserves to be upheld.
5 We have heard rival submissions. A perusal of the order of the ld. CIT(E) clearly shows that the assessee was provided only two opportunities 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 notice. It was also found that the Ld. CIT(E) on the information and documents available on record has observed in the impugned order that no substantial activities which are charitable in nature are being carried out by the assessee, which is in violation of the provisions of the section 12AB of the Act. In view of the above, the rejected the assessee’s application in Form 10AB for registration. That being so, in the interest of natural justice, the issues in this appeal are restored to the file of Ld. CIT(E) for re-adjudication afresh after granting the assessee adequate opportunity of being heard. The assessee is also directed to produce all the documentary evidence to substantiate its case during the course of re-adjudication proceeding before the Ld. CIT(E) positively.