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Facts
The assessee, a charitable company, obtained provisional registration under Section 12AB of the Income Tax Act, 1961. It subsequently applied for permanent registration in Form 10AB, but the Commissioner of Income Tax (Exemptions) rejected the application, citing non-compliance with notices issued for clarifications and additional information.
Held
The Tribunal, while acknowledging the CIT(E)'s rejection due to lack of response, emphasized the principles of natural justice. It set aside the impugned order and directed the CIT(E) to reconsider the application de novo, providing the assessee one more opportunity to present its case with evidence.
Key Issues
Whether the rejection of an application for permanent registration under Section 12AB/12A of the Income Tax Act, 1961, without providing sufficient opportunity to the assessee, violates principles of natural justice.
Sections Cited
Section 12AB, Section 12A, Section 8 of the Companies Act, 2013
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “F” BENCH
Before: SHRI PAVAN KUMAR GADALE & SHRI AMARJIT SINGH
IN THE INCOME TAX APPELLATE TRIBUNAL, “F” BENCH MUMBAI BEFORE SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER & SHRI AMARJIT SINGH, ACCOUNTANT MEMBER
ITA No. 2828/MUM/2024 (A.Y.2024-25)
Vs. CIT (Exemptions), Giveback Education Room no.601, 6th Floor, and Healthcare Cumballa Hill,MTNL TE Foundation, Building, PedderRoad, A-1301, Lake Castle, DrGopalraoDeshmukhMarg, Hiranandani Garden, Mumbai–400026. Powai, Mumbai-400076. PAN/GIR No. AAJCG3741J (अपीलाथ�/Appellant) (��यथ�/Respondent) Appellant by Shri Ashutosh.AR Respondent by Shri Ankush Kapoor.CIT DR सुनवाई क� तार�ख/Date of Hearing 16.07.2024 घोषणा क� तार�ख/Date of Pronouncement 22.07.2024 ORDER PER PAVAN KUMAR GADALE, JM: “The assessee has filed the appeal against the order of the Commissioner of Income Tax (Exemptions)(CIT(E)), Mumbai passed u/sec12AB(I)(b)(ii) of the Act. The assessee has raised the following grounds of appeal:
1.1. The assessee, a Company (Foundation) was incorporated for carrying out charitable activities, and registered under section 8 of the Companies Act, 2013. The certificate of incorporation was issued on 23-01-2022 by the Registrar of
2 ITA No. 2828/MUM/2024 (A.Y.2024-25) Givebak Education and Healthcare Foundation, Mumbai
Companies, Ministry of Corporate Affairs and the licence under section 8(1) was issued on 23-01-2022 by the Registrar of Companies. 1.2. It was granted provisional approval u/s 12AB of Income Tax act, 1961 by the Commissioner of Income Tax (Exemption) vide order dated 23-01-2022. 1.3. The assessee filed an application in Form 10AB 2-Sub clause (iii) of clause (ac) of sub-section (1) of section 12A of the Income Tax Act, 1961 on 22nd September 2023. 1.4. The assessee was requested vide the notice dated 06th March 2024 to show cause as to why the application should not be rejected and as to why the approval should not be cancelled. 1.5. The learned Commissioner of Income Tax (Exemption) erred in law and on facts in passing an order without elaborating on the assessee' s submission dated 17-01-2024, which is against the principles of natural justice. 2. The appellant prays that the order passed by the learned Commissioner of Income Tax (Exemption) be set aside. 3. The appellant craves leave to add, amend, alter, vary and/or withdraw any or all of the above grounds of appeal 2. The brief facts of the case are that the assessee is incorporated to conduct the charitable activates. The assesse was granted provisional registration under section 12AB of the Act in Form.no.10AC on 23-01-2022. Subsequently, as per the amended, provisions of section 12AB of the Act, The assessee for the purpose of permanent registration has uploaded e-application in Form. No.10AB on 22-09-2023 and since there was no proper compliance to the notices of hearing, the same was rejected by the
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CIT(E). Aggrieved by the CIT(E) order, the assessee has filed the appeal before the Honble Tribunal.
At the time of hearing, the Ld. AR submitted that the CIT(E) erred in rejecting the assesse’s application ignoring the submissions made along with the application in Form.10AB and also elaborate submissions filed on 17- 01-2024 in compliance to notice issued by the office of the CIT(E). Further the Ld.AR submitted that the assesse has a good case on merits and requested for opportunity before the lower authorities. Per contra, the Ld.DR relied on the order of the CIT(E).
We have heard the rival submissions and perused the material available on record. The assessee has filed the application before the CIT(E) for permanent registration under section 12A of the Act, whereas the CIT(E) in course of hearing proceedings has issued e-notice on the assessee through ITBA portal for certain clarifications and additional information to verify the genuineness of the activities of the trust. Since there was no proper response to the notice in spite of providing sufficient opportunities to the assessee, the CIT(E) has rejected the application. Therefore we considering, the facts, submissions and the principles of natural justice shall provide with one more opportunity of hearing to the assessee to substantiate the case along with evidences and information. Accordingly, set aside the impugned order and direct the CIT(E) to
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denovo consider the application as per the law and we allow the grounds of appeal of the assessee for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 22.07.2024.
Sd/- Sd/- (AMARJIT SINGH) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER
Mumbai, Dated: 22/07/2024 KRK Copy of the Order forwarded to: 1. The Appellant, 2. The Respondent 3. The CIT(A)- 4. CIT 5. DR, ITAT, Mumbai 6. Guard file.
//True Copy//
BY ORDER, (Dy./Asstt. Registrar)ITAT, Mumbai