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Facts
The assessee, Ujwal Prabodhini Sanstha, appealed against orders rejecting its applications for registration under sections 12AB and 80G. The rejection was primarily due to non-compliance with notices issued by the Ld. CIT(E). The assessee's counsel explained that the non-compliance was due to the authorized person being engaged in extensive field work for the trust's projects in remote areas with poor connectivity.
Held
The Tribunal found that the reason for non-compliance, while not ideal, was sufficiently explained by the assessee's engagement in its charitable activities. Therefore, the Tribunal decided to set aside the orders of the Ld. CIT(E) and restore the matters back for fresh consideration, allowing the assessee an opportunity to present its submissions.
Key Issues
Whether the rejection of registration under sections 12AB and 80G was justified due to the assessee's non-compliance with notices, or if the reasons for non-compliance warrant a fresh consideration.
Sections Cited
12AB, 80G, 12A, 12A(1)(ac)(vi)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “F”, MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI SANDEEP SINGH KARHAIL
Per : OM PRAKASH KANT, Accountant Member:
These appeals by the assessee are directed against two separate orders, both dated 17/08/2024, passed by the Ld. Commissioner of Income Tax (Exemption), Pune, (in short ‘the Ld. CIT(E)’) in relation to registration u/sec. 12AB and section
The Ld. Counsel for the assessee submitted that due to non compliance of the notice issue by the Ld. CIT(E) dated 31/07/2024, both the registration u/sec. 12AB and 80G have been rejected by the Ld. CIT(A). The Ld. Counsel explained the reasons for the non compliance and requested that if matter is restored back the assessee is willing to comply all the queries of ld CIT(E).
We have heard rival submissions of the parties and perused the relevant material on record.
As far as rejection of registration u/sec. 12AB is concerned the Ld. CIT(A) vide his impugned order dated 17/08/2024, has rejected registration u/s 12AB of the Act, observing as under:
“5. The assessee was requested to show cause as to why the application should not be rejected and why the registration granted under section 12AB of the Income Tax Act, 1961 should not be cancelled. The assessee was also given opportunity of being heard vide the said notice. The assessee was specifically informed that in the event of failure to comply by the due date, the application shall be liable to be rejected and the registration shall also be liable to be cancelled. The compliance to the said notice was due on 07/08/2024. The notice was duly served on the assessee through e- portal and email. However, the assessee neither submitted explanation to the show cause notice till date nor availed the opportunity of being heard.
Ujwal Prabodhini Sanstha 6. Since, the assessee has not furnished any explanation to the discrepancies communicated to it, it is presumed that the assessee has nothing to say in the matter.
Considering the above facts discussed in the show notice and discrepancies noticed and also that the assessee has not complied with the provisions of section. 12AB(1)(b)(i) of the Income Tax Act, 1961 as well as the provisions of Rule 17A(2) of Income Tax Rules, 1962 in spite giving sufficient opportunities, the undersigned is unable to draw any satisfactory conclusion about the genuineness of activities of the assessee and compliance of requirements of any other law for the time being in force by the assessee as are material for the purpose of achieving its objects.
8. In view of the above, the application filed by the assessee is hereby rejected and the provisional registration granted on 23/08/2023 under section 12AB read with section 12A(1)(ac) (vi) of the Income Tax Act, 1961 is hereby cancelled.”
Before us the Ld. Counsel for the assessee in his prayer on behalf of the trust has submitted as under:
“1) The trust was having regular 12A & 80G Registration Certificate prior to year 2020. Under new law, it erroneously applied for provisional Registration which was granted to it.
2) Thereafter, the Trust has filed Application for converting those provisional Registration into final 12A & 80G Registration on 25.02.2024 by filing form 10AB.
3) Thereafter, hearing notice was received by trust & initial detailed compliance was done on (13.05.2024) for 12A Notice & (21.06.2024) for 80G by the trust.
Ujwal Prabodhini Sanstha 4) Thereafter, another show cause notice was sent on "wagerarmesh@gmail.com". This mail id belong to Mr. Ramesh Wage who was secretory for 31.07.2024 on email the year 2014-15 to 2024. When notice dt.31.07.2024 was sent to Mr. Ramesh Wage he was trailing to remote location areas (from June 2024 to August 2024) across Maharashtra for Trust's work relating project of women empowerment in various small villages. In those villages the connectivity to mobile was very less & also he was very busy as the women empowerment project was very big & thus the notice received was unintentionally missed from his side.
5) Thus, due to Non-Compliance to these notices our applications were rejected by the CIT- E, vide its order dated. 17/08/2024”
We find that due to the reason that person of trust, who was authorised to attend matter of correspondence with the Income Tax Department, was busy in executing works furthering the objects of the trust, therefore, he could not attend the notices issued by the ld CIT(E). In our opinion this is one of the sufficient cause for non compliance and therefore, to provide one more opportunity to the assessee, we feel it appropriate to set aside the order of the Ld. CIT(E) and restore the matter back to him for deciding afresh, after taking into consideration submission of the assessee.
7. The grounds raised in appeal no. 5413/Mum/2024 are accordingly, allowed for statistical purposes.
The assessee in the appeal no. 5412/Mum/2024 is aggrieved with the rejection of the registration u/sec. 80G. Since Ujwal Prabodhini Sanstha facts and circumstances in the appeal are similar to facts and circumstances in therefore following our finding above, the impugned order is set-aside and matter of registration u/s 80G of the Act is restored back for deciding afresh. The grounds raised in are also allowed for statistical purposes.
In the result, both the appeals are allowed for statistical purposes.
Order pronounced in the open court on 28.11.2024.