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Facts
Global Care Foundation filed two appeals against orders from the CIT(E) rejecting its applications for registration under Section 12AB(1)(b)(ii)(B) and approval under Section 80G(5)(ii)(b)(B) of the Income-tax Act, 1961. The assessee argued that the applications were rejected based on incorrect facts and without adequate opportunity of being heard, citing changes in Trust management and Auditor as reasons for not furnishing details requested by the CIT(E).
Held
The Tribunal observed that the CIT(E)'s orders were ex-parte and held that the assessee was not afforded a reasonable and adequate opportunity of being heard. Consequently, both appeals were restored to the file of the CIT(E) for reconsideration, with directions to provide the assessee a proper opportunity and for the assessee to furnish the requested documents.
Key Issues
Whether the rejection of applications for registration u/s 12AB and approval u/s 80G was valid when the assessee was not given adequate opportunity of being heard.
Sections Cited
Section 12AB(1)(b)(ii)(B) of the Income-tax Act, 1961, Section 80G(5)(ii)(b)(B) of the Income-tax Act, 1961
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI ‘B’ BENCH,
Before: SHRI CHALLA NAGENDRA PRASAD, & SHRI NAVEEN CHANDRA
PER NAVEEN CHANDRA, ACCOUNTANT MEMBER:-
The above captioned two separate appeals by the assessee are preferred against 2 separate orders of the CIT(E), Delhi dated 20.03.2024.
The common grievance in both the appeals is the rejection of application for registration u/s 12AB(1)(b)(ii)(B) of the Income-tax Act, 1961 [the Act, for short] by cancelling the provisional registration and approval u/s 80G(5)(ii)(b)(B) of the Act respectively.
Since common grievance is involved in the captioned appeals, they were heard together and are disposed of by this common order for the sake of convenience and brevity.
During the course of proceedings, the ld. CIT(E) had issued questionnaire vide notices dated 15.01.2024 and 13.02.2024 seeking various details which were not furnished before him. The ld. counsel for the assessee relied by stating that there was change in the management of the Trust and change in Auditor during the F.Y.
Before us, the ld. counsel for the assessee vehemently stated that both the applications have been rejected by the ld. CIT(E) by recording incorrect facts and finding and as the order has been passed without granting adequate opportunity of being heard, the assessee ought to have been granted the benefit of approval under the said section.
5. Accordingly, the ld. counsel for the assessee prayed for setting aside the appeals to the file of the CIT(E) for reconsideration.
The ld. DR fairly conceded that the orders of the ld. CIT(E) are ex- parte.
We have carefully perused the orders of the CIT(E). We find that the ld. CIT(E) has sent a detailed questionnaire to the Assessing Officer but since the assessee for the reason that there was change in the management of the Trust and change in Auditor during the F.Y could not attend the proceedings and the applications were rejected. We are of the considered view that the CIT(E) ought to have given a reasonable and adequate opportunity of being heard to the assessee.
Therefore, in the interest of justice and fair play, we deem it fit to restore both the appeals to the file of the CIT(E).
The assessee is directed to furnish the requisite documents as sought by the ld. CIT(E). The CIT(E) is directed to rehear the applications after affording a reasonable and adequate opportunity of being heard to the assessee.
In the result, the appeals of the assessee in & 2099/DEL/2024 are allowed for statistical purposes
The order is pronounced in the open court on 11.09.2024.