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Facts
The assessee, Samvedna Charitable Foundation, applied for registration under Section 12A(1)(ac)(iii) of the Income Tax Act, 1961, but the CIT(E) rejected the application ex-parte on 23.01.2023 after issuing questionnaires that remained uncomplied with. The assessee appealed to the ITAT, and a 217-day delay in filing the appeal was condoned.
Held
The Tribunal held that it would be judicially expedient to restore the matter back to the file of the CIT(E) for a fresh decision on merits. This is to be done after allowing the assessee a reasonable opportunity of hearing, with the expectation that the assessee will cooperate in the proceedings.
Key Issues
Whether the CIT(E) was justified in rejecting the application for registration under Section 12A(1)(ac)(iii) ex-parte without providing adequate opportunity of being heard, violating principles of natural justice.
Sections Cited
Section 12A(1)(ac)(iii) of the Income Tax Act, 1961
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “G”: NEW DELHI
Before: DR. BRR KUMAR & MS. ASTHA CHANDRA
The appeal filed by the assessee is directed against the order dated 23.01.2023 of the Ld. Commissioner of Income Tax (Exemptions), Chandigarh [“CIT(E)”] whereby the Ld. CIT(E) rejected the assessee’s application for registration under section 12A(1)(ac)(iii) of the Income Tax Act, 1961 (the “Act”) filed on 30.09.2022 in prescribed Form No. 10AB.
Samvedna Charitable Foundation vs. CIT The assessee has raised the following grounds: 2.
“1. On the facts and circumstances of the case, the order passed by Learned Commissioner of Income Tax (Exemptions), Chandigarh rejecting the application of the assessee for approval under section 12A(1)(ac) (iii) of the Income Tax Act is bad both in the eye of law and on facts.
On the facts and circumstances of the case, the Ld. CIT(E) has erred both on facts and in law in passing the order exparte despite the fact that non- compliance of the notices was on account of the reasons beyond the control of the assessee.
3. On the facts and circumstances of the case, the Ld. CIT(E) has erred both on facts and in law in passing the order rejecting the application for approval under section 12A(1)(ac)(iii) of the Act. without providing the assessee an opportunity of being heard in violation of principle of natural justice.
4. On the facts and circumstances of the case, the order passed by Id. CIT(E) are in violation of the statutory conditions of the Act and the procedure prescribed under the law and as such the same is bad in the eye of law and liable to be quashed.
5. On the facts and circumstances of the case, Ld. CIT(E) has been erred both on facts and in law in rejecting the application of the assessee for approval u/s 12A(1)(ac) (iii) of the act, despite the assessee has filed the application within the prescribed time limit and fulfilled all the conditions as provided under the Income Tax Act and thus, eligible for registration.
On the facts and in the circumstances of the case, Ld CIT(E) erred in rejecting the application for registration u/s 12A(1)(ac) (iii) of the Act, 1961 despite the fact that there is no adverse finding regarding the aims, objects and genuineness of activities of the trust and hence application for registration cannot be rejected.”
The appeal of the assessee is late by 217 days. The assessee filed application seeking condonation of delay. The application is supported by an affidavit sworn by the Trustee on 25.10.2023. After considering the submission of the Ld. Representative of the parties, we hereby condone the delay. Samvedna Charitable Foundation vs. CIT
Briefly stated, on receipt of application for registration, the Ld. CIT(E) issued a questionnaire electronically on 10.11.2022 to furnish documents /details online through e-proceedings on e-filing portal by 25.11.2022. This was not responded to. The Ld. CIT(E) gave two more opportunities for compliance which also remained uncomplied with. The Ld. CIT(E) therefore rejected the impugned application for registration. This has brought the assessee before the Tribunal and all the grounds relate thereto.
We have heard the Ld. Representative of the parties, considered their arguments, and perused the record. We are of the view that it would be judicially expedient if the matter is restored back to the file of the Ld. CIT(E) for decision afresh on merits in accordance with law after allowing reasonable opportunity of hearing to the assessee who shall co-operate in proceedings before the Ld. CIT(E). We order accordingly.