M/S.SAPIENT EDUCATION TRUST,MYSORE vs. COMMISSIONER OF INCOME TAX, BANGALORE

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ITA 2232/BANG/2016Status: DisposedITAT Bangalore28 September 2017AY 2016-174 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the issue in the appeal was whether the CIT(Exemptions) was justified in rejecting the application for registration on the ground of non-compliance with the notice. The Tribunal noted that the assessee's Authorized Representative demonstrated that all notices were complied with, though belatedly. Therefore, the Tribunal considered it a fit case to remand the matter back to the file of the CIT(Exemptions) with a direction to consider the application afresh in accordance with law. For the appeal concerning Section 80G approval, the Tribunal, for parity of reasoning, also remitted the issue to the file of the CIT(Exemptions) for fresh consideration in accordance with law. The ratio decidendi is that where compliance with notices is demonstrated, even if belated, and the assessee seeks a fresh consideration, remanding the matter to the lower authority is appropriate for a fresh examination of the application on merits. The operative direction was to remand the matters to the CIT(Exemptions) for fresh consideration.

What were the facts?

The assessee, Sapient Education Trust, filed an appeal against the order of the Commissioner of Income-tax (Exemptions) [CIT(Exemptions)] dated 30/09/2016, rejecting its application for registration under Section 12AA of the Income-tax Act, 1961, for the assessment year 2016-17. The trust, formed for imparting education, had submitted a re-constituted deed. The CIT(Exemptions) rejected the application citing non-furnishing of details as called for. The assessee contended that it had complied with notices, albeit belatedly, and that the CIT(Exemptions)'s finding was contrary to facts. The revenue argued that the assessee failed to comply with the notice by the specified date and that the matter did not require remand. A separate appeal was filed challenging the rejection of approval under Section 80G.

What were the issues?

1. Whether the Commissioner of Income-tax (Exemptions) erred in rejecting the registration under Section 12AA of the Income-tax Act, 1961, on the facts of the case? (Question of fact and law, concerning Section 12AA). 2. Whether the appellant has complied with all the requirements and formalities for getting registration under Section 12A of the Income-tax Act, 1961? (Question of fact and law, concerning Section 12A). 3. Whether the Commissioner of Income-tax (Exemptions) was justified in rejecting the approval under Section 80G of the Income-tax Act, 1961? (Question of fact and law, concerning Section 80G). Assessee's contentions: The assessee argued that it had complied with all the requirements and formalities for registration under Section 12A/12AA, and that the CIT(Exemptions)'s conclusion was erroneous. It also submitted that the re-constituted deed was duly registered. The assessee prayed for the matter to be remitted back to the CIT(Exemptions) for fresh consideration. Revenue's contentions: The revenue contended that the assessee-trust failed to comply with the notice issued by the CIT(Exemptions) before the specified date, and the information was filed after the due date. It argued that this was not a matter requiring remand to the CIT(Exemptions).

Which sections of the Income-tax Act were involved?

Section 12AA,Section 12A,Section 80G

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘Cc’ BENCH, BENGALURU

Before: SHRI VIJAY PAL RAO

For Appellant: Shri H.N.Khincha, CA
For Respondent: Shri R.N.Parbat, CIT(DR)
Hearing: 25/09/2017Pronounced: 28/09/2017

Date of hearing : 25/09/2017 Date of pronouncement : 28/09/2017 O R D E R Per INTURI RAMA RAO, AM :

: This is an appeal filed by the assessee directed against the order passed by the Commissioner of Income- tax(Exemptions)[‘CIT(Exemptions) for short’] u/s 12AA(1)(b)(ii) of the Income-tax Act, 1961 [hereinafter referred to as 'the Act' for short] dated 30/09/2016.

2.

The assessee raised the following grounds of appeal:

3. Briefly facts of the case are that the assessee is a trust duly registered under the provisions of the Trust Act with Sub- Registrar, Mysore. The said trust was formed for the purpose of imparting education. The assessee-trust applied for registration u/s 12AA before the CIT(Exemptions), Bengaluru. During the course of proceedings before the CIT(Exemptions), the assessee- trust filed detailed explanation vide letter dated 12/08/2016 and subsequently copy of the re-constituted deed executed on 28/09/2016 duly registered with the office of the Sub-Registrar on 29/09/2016 were e-mailed to the CIT(Exemptions). However, the CIT(Exemptions) rejected registration u/s 12AA of the Act vide order dated 30/09/2016 on the ground that the assessee had not furnished details as called for. It was submitted that the finding of the CIT(Exemptions) was contrary to facts and therefore, prayed that the matter may be remitted back to & 2233/Bang/2016 Page 3 of 4 the file of the CIT(Exemptions) for fresh consideration in accordance with law. On the other hand, learned Departmental Representative pointed out that the assessee-trust failed to comply with notice issued by the office of the CIT(Exemptions before the specified date and information was filed after the specified date in the notices issued and it is not a matter requiring remand to the file of the CIT(Exemptions).

4. We heard rival submissions and perused the material on record. The only issue in the present appeal is whether the CIT(Exemptions) was justified in rejecting the application for registration on the ground that the assessee had not complied with notice issued. During the course of hearing of the appeal, learned AR of the assessee demonstrated that the assessee had complied with all the notices though belatedly. Therefore, in our considered opinion, it is a fit case to remand the matter to the file of the CIT(Exemptions) with a direction that the application may be considered afresh in accordance with law.

5.

In the result, the appeal filed by the assessee is treated as partly allowed for statistical purposes. : 6. In this appeal, the assessee challenges the rejection of approval u/s 80G of the Act. Since in the assessee’s appeal in against rejection of registration u/s & 2233/Bang/2016 Page 4 of 4 12AA of the Act, the matter was remanded back to the file of the CIT(Exemptions) for parity of same reasoning, we remit this issue also to the file of the CIT(Exemptions) for fresh consideration in accordance with law.

7.

In the result, the appeal is treated as partly allowed for statistical purposes.

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