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Income Tax Appellate Tribunal, ‘A’ BENCH MUMBAI
Before: SHRI AMIT SHUKLA & SMT. RENU JAUHARI
आदेश / O R D E R PER AMIT SHUKLA (J.M): The aforesaid appeal has been filed by the assessee against order dated 28/09/2023 passed by CIT (Exemptions) u/s.12AB refusal to grant registration to the assessee. 2. In the grounds of appeal assessee has raised following grounds:-
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“1. On the facts and in the circumstances of the case, and in law, the Ld. CIT(E) erred in passing impugned order rejecting the appellant's application u/s. 124(1)(ac)(iii) of the Act seeking registration u/s 12AB of the Act. The appellant submits that the Ld CIT(E) passed the impugned order in violation of the principles of natural justice, without affording sufficient opportunity to the appellant to submit the required details. Your appellant, therefore, prays that the Ld. CIT(E) be directed to grant registration u/s. 12AB of the Act to the appellant, or for such other relief, as the Hon'ble Tribunal may deem fit in the circumstances of the case.”
The brief facts are that the assessee trust had filed the application in Form 10AB seeking registration u/s.12AB of the Act. The ld. CIT (E) found that application in Form 10AB was not complete and all the documents required to be accompanied with the application have not been filed. Accordingly, a notice was issued on 10/08/2023 requesting the assessee to complete set of documents mentioned in Rule 17A (2). In response assessee filed its submissions dated 28/08/2023. Thereafter, on perusal of the submissions and the details the ld. CIT (E) noted that assessee is required to furnish the details of administrative expenses and details of salary expenses etc. on 20/09/2023. However, assessee requested for adjournment upto 2nd week of October 2022. Since time limit for completion of order was on or before 30/09/2023 and also 29/09/2023 and 30/09/2023 were holidays and accordingly, ld. CIT(E) waited for reply to be filed upto 28/09/2023. But assessee despite aware that it is time barring on 30/09/2023, assessee did not file submission or gave any reply. Thus, ld. CIT(E) had no option but to reject the
3 ITA NO 4198/MUM/2023 Anti Suliben Hirani Charitable Trust A.Y.2023–24 application for registration u/s.12AB. The relevant observation by the ld. CIT (E) reads as under:- “3. On verification of the application in Form 10AB filed by the assessee, it was found that the application was not complete, and all the documents required to be accompanying the application were not furnished. Hence, a notice was issued to the applicant vide DIN & Notice No ITBA/EXM/F/EXM43/2023-24/1055040456(1) dated 10.08.2023 requesting the assessee to furnish the complete set of documents mentioned in Rule 17A(2), In response to the same the assessee filed its submission dated 22.08.2023. On perusal of the submission on record, a showcause notice was also issued vide DIN & Notice No. ITBA/EXM/F/EXM43/2023-24/1056335973(1) dated 20.09.2023 requesting to provide the details of administrative expenses for F.Y. 2022-23 & details of salary expenses alongwith details of persons to whom salary paid, the assessee asked to furnish further requirements to ascertain the genuineness of the activities carried out by the trust.
The Applicant has requested for adjournment upto Second week of October 2023. Since the time limit for completion of order is on or before 30.09.2023. Further it is hereby mentioned/noted that 29.09. 2023 & 30.09.2023 are holidays, in view of this we have waited for reply upto 28.09.2023 but the assessee have not submitted any submission/reply Registration under section 12AB is to be granted in terms of the provisions of section 12AB(1)(b) of the Act after being satisfied about the objects of the trust or institution, the genuineness of activities, and the compliance of any other law for the time being in force as are material for the purposes of achieving its objects In the absence of necessary compliance by the Applicant, I am unable to arrive at a satisfaction on these parameters. As such, in view of the statutory limitation to decide on the application on or before 30.09.2023, I am left with no
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other option but to reject the application seeking registration under section 12AB of the Act.
In conclusion, this application for grant of registration stands rejected.”
Before us ld. Counsel submitted that assessee was granted provisional registration in Form 10AC dated 30/05/2022 u/s. 12A (1)(ac)(vi). Thereafter, assessee in accordance with the provisions of the Rules had filed an application for approval in Form 10AB on 09/03/2023. He submitted that thereafter the first notice was received on 10/08/2023 calling for the information and details, which assessee had duly filed and uploaded the same on 22/08/2023. Thereafter, another notice dated 20/09/2023 was issued calling for further clarification and information to which assessee’s submitted that person who handles the trust matter was busy in tax audit work and due date for audit report was on 30/09/2023 and he has informed to take adjournment on Second Week of October and therefore, assessee could not file the requisite details. Therefore, there was a reasonable cause and further it is not a case that assessee had not make any compliance. Ld. CIT (A) was erred in rejecting the application u/s.12AB. 5. On the other hand ld. DR submitted that assessee was very well aware that time limit for passing of the order was 30/09/2023 and therefore, there was no reason for the ld. CIT(A) to give the adjournment dated on 2nd Week of October 2023. Thus, what assessee requested was beyond the power of the ld.
5 ITA NO 4198/MUM/2023 Anti Suliben Hirani Charitable Trust A.Y.2023–24 CIT(E). Therefore, he has correctly rejected the application filed by the assessee as assessee failed to file the requisite details asked by the ld. CIT(E). 6. After considering the relevant facts brought on record and submissions made by the parties, we find that though assessee had submitted the details and information as required by the ld. CIT (E) in response to notice dated 10/08/2023 and 22/08/2023. Thereafter, on perusal of the details, ld. CIT (E) asked for further details of certain expenses to verify the genuineness and activities of the assessee trust. Ld. CIT (E) had requested to file those details on or before 25/09/2023 in his office. Instead of complying with the notices, adjournment has been sought that Chartered Accountant looking after the trust matter, was busy in his tax audit compliances. Such a reason for taking adjournment despite knowing the fact that limitation for acceptance or rejecting the application was to be expired on 30/09/2023 and 29/09/2023 was holiday, the statutory limit for passing the order could not have been extended by the ld. CIT(E), therefore, it was incumbent upon assessee to ensure that compliance was made even though Chartered Accountant had some other professional duty. If Chartered Accountant handling the matter had different priority in tax audit work, then assessee should have made alternative arrangements instead of asking unreasonable request, which was beyond the power of ld. CIT (E) to grant adjournment in Second week of October 2023. Since certain information was required to be furnished by the assessee and due to non-submission of this information within the time
6 ITA NO 4198/MUM/2023 Anti Suliben Hirani Charitable Trust A.Y.2023–24 limit for placing of the order has lead to rejection of application, therefore, in the interest of justice, we restore this matter back to the file of the ld. CIT (E) to decide the issue after considering the information in details of what he has asked for. 7. However, we also levy a cost of Rs.5,000/- on the assessee for non-complying with the notice and giving excuse which cannot be accepted especially when order had to be passed within the time limit provided in the statute. Thus subject to deposit of Rs.5,000/-, matter is restored back to the file of the ld. CIT(E) to decide the issue accordingly.
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced on 23rd April, 2024.
Sd/- Sd/- (RENU JAUHARI) (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated 23/04/2024 KARUNA, sr.ps Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. BY ORDER, //True Copy//
(Asstt. Registrar) ITAT, Mumbai