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Facts
The assessee, Simple Vedas Foundation, appealed against the orders of the CIT(E) rejecting its applications for registration under Section 12AB and exemption under Section 80G. The CIT(E) had requested documentary evidence regarding the application of funds, activities, and donations, but the assessee failed to provide them within the stipulated time.
Held
The Tribunal held that the assessee was not given an effective opportunity with reasonable time to submit the required details. Therefore, the appeals are remitted back to the CIT(E) to consider all the details submitted by the assessee and pass a fresh order.
Key Issues
Whether the assessee was denied an effective opportunity by the CIT(E) to furnish necessary details for the grant of registration under Section 12AB and exemption under Section 80G, and if not, whether the rejection of such applications was justified.
Sections Cited
12AB, 80G, 12A(1)(ac)(iii), 80G(5)(i), 11, 12, 10(23)(aa), 10(23)(c)
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Income Tax Appellate Tribunal, MUMBAI BENCH “G” MUMBAI
Before: SHRI RAHUL CHAUDHARY & SHRI OMKARESHWAR CHIDARA
These appeals by the assessee are directed against two separate orders both dated 01.07.2024 and 26.07.2024 passed by the Ld. Commissioner of Income-tax (Exemptions), Mumbai [in short ‘the Ld. CIT(E)’].
Simple Vedas Foundation 2 Simple Vedas Foundation & 4914/MUM/2024 & 4914/MUM/2024
The Ld. AO has has stated that the assessee filed two assessee filed two appeal and ITA No. 4914/Mum/2024. The grievance No. 4913/Mum/2024 and ITA No. 4914/Mum/2024. The grievance No. 4913/Mum/2024 and ITA No. 4914/Mum/2024. The grievance of the appellant trust is that it was denied the registration sought of the appellant trust is that it was denied the registration sought of the appellant trust is that it was denied the registration sought for u/s 12AB and denied the denied the 80G exemption. deals with rejection of application deals with rejection of application deals with rejection of application filed by the e e appellant appellant appellant for for for 80G 80G 80G exemption exemption exemption and and and ITA ITA ITA No. No. No. 4914/Mum/2024 deals with rejection of registration sought u/s 4914/Mum/2024 deals with rejection of registration sought u/s 4914/Mum/2024 deals with rejection of registration sought u/s 12AB of the Income-tax Act, 1961 (in short ‘the Act’). tax Act, 1961 (in short ‘the Act’). tax Act, 1961 (in short ‘the Act’). the appeal filed the In the appeal ITA No. 4913/Mum/2024, the appeal filed the In the appeal ITA No. 4913/Mum/2024, the appeal filed the following ground:
On the facts and in the circumstances of the case and in law, the On the facts and in the circumstances of the case and in law, the On the facts and in the circumstances of the case and in law, the Ld. CIT(E) erred in rejecting application filed for 80G exemption) Ld. CIT(E) erred in rejecting application filed for 80G exemption) Ld. CIT(E) erred in rejecting application filed for 80G exemption) 5. The Ld. CIT(Exemption) has issued a letter to the appellant The Ld. CIT(Exemption) has issued a letter to the appellant The Ld. CIT(Exemption) has issued a letter to the appellant with regard to proceedings u/s 80G(5)(iii) stating that the with regard to proceedings u/s 80G(5)(iii) stating that the with regard to proceedings u/s 80G(5)(iii) stating that the funds received by your trust cannot received by your trust cannot be applied beyond Indian be applied beyond Indian shores and in view of same why the application in form No. 10AB should not be in view of same why the application in form No. 10AB should not be in view of same why the application in form No. 10AB should not be rejected. The Ld. CIT(Exemption) has also requested the appellant rejected. The Ld. CIT(Exemption) has also requested the appellant rejected. The Ld. CIT(Exemption) has also requested the appellant to filed documentary evidence relating to the acti to filed documentary evidence relating to the acti to filed documentary evidence relating to the activities already carried out and details of expenses incurred thereby. The appellant carried out and details of expenses incurred thereby. The appellant carried out and details of expenses incurred thereby. The appellant trust was also requested to provide the details of donations received trust was also requested to provide the details of donations received trust was also requested to provide the details of donations received from Financial Year (FY) 2022 from Financial Year (FY) 2022-23 and 2023 23 and 2023-24 and with documentary evidences, bank statement documentary evidences, bank statement. The appell appellant trust was requested to file all these details on 24.07.2024 failing which it will requested to file all these details on 24.07.2024 failing which it will requested to file all these details on 24.07.2024 failing which it will
Simple Vedas Foundation 3 Simple Vedas Foundation & 4914/MUM/2024 & 4914/MUM/2024 be deemed that there is no objection for proposed rejection of be deemed that there is no objection for proposed rejection of be deemed that there is no objection for proposed rejection of application u/s 80G.
5.1 Since the required details as mentioned above were not Since the required details as mentioned above were not Since the required details as mentioned above were not submitted before the Ld. CI submitted before the Ld. CIT(Exemption), an order was passed T(Exemption), an order was passed stating as follows:
The appellant has also applied for registration u/s 12AB of the The appellant has also applied for registration u/s 12AB of the The appellant has also applied for registration u/s 12AB of the Act vide Form 10AB u/s 12A(1)(ac)(iii) of the Act and same was Act vide Form 10AB u/s 12A(1)(ac)(iii) of the Act and same was Act vide Form 10AB u/s 12A(1)(ac)(iii) of the Act and same was rejected vide order dated 26.07.2024. The provision of section rejected vide order dated 26.07.2024. The provision of section rejected vide order dated 26.07.2024. The provision of section 80G(5)(i) of the Act stipulates that the provision of this section is of the Act stipulates that the provision of this section is of the Act stipulates that the provision of this section is only available for institution or fund for which section 11 only available for institution or fund for which section 11 only available for institution or fund for which section 11/12 or clause 23(aa) or clause 23(c) of section 10 of the Act applies. The clause 23(aa) or clause 23(c) of section 10 of the Act applies. The clause 23(aa) or clause 23(c) of section 10 of the Act applies. The appellant fails to fulfill any of the above criteria in view o appellant fails to fulfill any of the above criteria in view o appellant fails to fulfill any of the above criteria in view of rejection of its application for registration u/s 12AB of the Act. Thus, its of its application for registration u/s 12AB of the Act. Thus, its of its application for registration u/s 12AB of the Act. Thus, its application for approval u/s 80G of the Act becomes untenable and application for approval u/s 80G of the Act becomes untenable and application for approval u/s 80G of the Act becomes untenable and hence rejected.
Aggrieved by the above order, the appellant trust filed appeal Aggrieved by the above order, the appellant trust filed appeal Aggrieved by the above order, the appellant trust filed appeal with the grounds of appeal m with the grounds of appeal mentioned above. During the appeal entioned above. During the appeal proceedings before ITAT, the Ld. AR of the appellant has stated that proceedings before ITAT, the Ld. AR of the appellant has stated that proceedings before ITAT, the Ld. AR of the appellant has stated that the time given to submit the details was very short and hence could the time given to submit the details was very short and hence could the time given to submit the details was very short and hence could not submit the same. It was also submitted before the ITAT that all not submit the same. It was also submitted before the ITAT that all not submit the same. It was also submitted before the ITAT that all the details would be furnished before the Ld. CIT(Exemption) and be furnished before the Ld. CIT(Exemption) and be furnished before the Ld. CIT(Exemption) and an opportunity may be given. The Ld. Departmental Representative an opportunity may be given. The Ld. Departmental Representative an opportunity may be given. The Ld. Departmental Representative (DR) did not controvert the submission of the appellant. (DR) did not controvert the submission of the appellant. (DR) did not controvert the submission of the appellant.
Simple Vedas Foundation 4 Simple Vedas Foundation & 4914/MUM/2024 & 4914/MUM/2024
After hearing both sides it is decided to give After hearing both sides it is decided to give an an opportunity to the appellant trust to file all the details which were required by the st to file all the details which were required by the st to file all the details which were required by the Ld. CIT(Exemption). The Ld. CIT Ld. CIT(Exemption). The Ld. CIT (Exemptions) is directed to take is directed to take into consideration all the details submitted by the appellant trust into consideration all the details submitted by the appellant trust into consideration all the details submitted by the appellant trust and pass an order afresh. and pass an order afresh. Accordingly, the issue is remitted to the Accordingly, the issue is remitted to the file of Ld. CIT(E).
7.1 The appeal of assessee is allowed for statistical purposes. The appeal of assessee is allowed for statistical purposes. The appeal of assessee is allowed for statistical purposes.
The Ld. CIT(Exemption) rejected the The Ld. CIT(Exemption) rejected the Registration Registration sought by the appellant trust u/s 12AB of the Act appellant trust u/s 12AB of the Act. From the order of the Ld. the order of the Ld. CIT(Exemption) page 4 CIT(Exemption) page 4 para 3 it is observed that certain notices para 3 it is observed that certain notices were issued to the appellant trust reques were issued to the appellant trust requesting them to submit the ting them to submit the details/explanation along with documentary evidences relating to explanation along with documentary evidences relating to explanation along with documentary evidences relating to application of the fund application of the funds outside India as mentioned in the object outside India as mentioned in the object clause of the trust deed st deed. The appellant Trust was requested to file The appellant Trust was requested to file evidence of activities carried out and the details of donations of activities carried out and the details of donations of activities carried out and the details of donations received in financial year 2022 received in financial year 2022-23 and 2023-24 24 with necessary documentary evidences documentary evidences. This notice was issued by the Ld. . This notice was issued by the Ld. CIT(Exemption) vide hi CIT(Exemption) vide his letter 20.07.2024. The appellant trust was s letter 20.07.2024. The appellant trust was requested to file all these information within a week and in requested to file all these information within a week and in requested to file all these information within a week and in response to the same the appellant trust could not submit the response to the same the appellant trust could not submit the response to the same the appellant trust could not submit the relevant information and requested for an adjournment till relevant information and requested for an adjournment till relevant information and requested for an adjournment till 10.08.2024. From para 4 of th 10.08.2024. From para 4 of the above said order of the Ld. e above said order of the Ld.
Simple Vedas Foundation 5 Simple Vedas Foundation & 4914/MUM/2024 & 4914/MUM/2024 CIT(Exemption), it is observed that the statutory limitation to decide it is observed that the statutory limitation to decide it is observed that the statutory limitation to decide on the application is is 31.07.2024. The request of adjournment was 31.07.2024. The request of adjournment was rejected by stating that the rejected by stating that the above details are required to come to a details are required to come to a conclusion about the conclusion about the genuineness of the Trust and and to find out whether all the objects were complied with as per law. In objects were complied with as per law. In objects were complied with as per law. In the absence of necessary compliance by the appellant within the absence of necessary compliance by the appellant within the absence of necessary compliance by the appellant within the stipulated time, the Ld. CIT(Exemption) has stated that he is unable stipulated time, the Ld. CIT(Exemption) has stated that he is unable stipulated time, the Ld. CIT(Exemption) has stated that he is unable to come to the conclusio conclusion about the genuineness of the trust. about the genuineness of the trust. Hence, the application seeking registration u/s 12AB was rejected. Hence, the application seeking registration u/s 12AB was rejected. Hence, the application seeking registration u/s 12AB was rejected.
Aggrieved by the order of the Ld. CIT(Exemption), the appellant Aggrieved by the order of the Ld. CIT(Exemption), the appellant Aggrieved by the order of the Ld. CIT(Exemption), the appellant filed an appeal before the ITAT. Before the ITAT, the Ld. AR of the filed an appeal before the ITAT. Before the ITAT, the Ld. AR of the filed an appeal before the ITAT. Before the ITAT, the Ld. AR of the appellant has stated that the time given to submit all the require tated that the time given to submit all the require tated that the time given to submit all the required details is quite short and the details is quite short and the Trust is genuine in all represents and is genuine in all represents and he is entitled for registration u/s 12AB and 80G of the Act. It was he is entitled for registration u/s 12AB and 80G of the Act. It was he is entitled for registration u/s 12AB and 80G of the Act. It was submitted that during the hearing proceedings before the ITAT, th submitted that during the hearing proceedings before the ITAT, th submitted that during the hearing proceedings before the ITAT, the Ld. AR of the appellant has stated that if an opportunity Ld. AR of the appellant has stated that if an opportunity Ld. AR of the appellant has stated that if an opportunity is given, all the required details would be the required details would be submitted. Hence, it is is requested that an opportunity may be given to file all the required details before an opportunity may be given to file all the required details before an opportunity may be given to file all the required details before the Ld. CIT(Exemption). After hearing the sub the Ld. CIT(Exemption). After hearing the submission of the mission of the appellant Trust and perusing the order of the Ld. CIT(Exemption) it and perusing the order of the Ld. CIT(Exemption) it and perusing the order of the Ld. CIT(Exemption) it is decided that an effective opportunity is decided that an effective opportunity was not was not given to the appellant trust with reasonable time to submit all the required appellant trust with reasonable time to submit all the required appellant trust with reasonable time to submit all the required details. Hence, the Ld. CIT(Exemption) is directed to take all the details. Hence, the Ld. CIT(Exemption) is directed to take all the details. Hence, the Ld. CIT(Exemption) is directed to take all the required details as submitted by the appellant trust and pass a required details as submitted by the appellant trust and pass a required details as submitted by the appellant trust and pass a Simple Vedas Foundation 6 Simple Vedas Foundation & 4914/MUM/2024 & 4914/MUM/2024 fresh order accordingly. fresh order accordingly. Accordingly, the issue is remitted to the file is remitted to the file of Ld. CIT(E).
Both the above appeal Both the above appeals in and 4914/Mum/2024 in and 4914/Mum/2024 are allowed for statistical purposes. are allowed for statistical purposes.
Order pronounced in the open Court on 30 nounced in the open Court on 30/12/2024. /12/2024.