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Facts
The assessee filed an application for registration under section 12A (1)(ac)(iii) in Form 10AB. The CIT(Exemption) rejected the application because the assessee failed to provide necessary documents and details despite being given several opportunities. The assessee claimed that their counsel was busy with audit reports and tax return filings during the period the notices were issued.
Held
The Tribunal noted that the period for compliance coincided with the busy season for Chartered Accountants preparing audit reports and tax returns. It was held that there were sufficient reasons for the assessee's non-compliance. The matter was restored to the CIT(Exemption) for fresh consideration.
Key Issues
Whether the rejection of the registration application under section 12A (1)(ac)(iii) by the CIT(Exemption) due to non-compliance was justified, considering the reasons provided by the assessee for the delay.
Sections Cited
12A (1)(ac)(iii), 12AB
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Income Tax Appellate Tribunal, JABALPUR BENCH, JABALPUR
A.Y. 2024-25 AVS Shiksha Evam Samajotthan vs. Commissioner of Income Tax Samiti Sagar, Malthone Khurai, Sagar, (Exemption), Bhopal Madhya Pradesh PAN:AAFTA9213L (Appellant) (Respondent) Assessee by: Sh. Dhiraj Ghai, CA Revenue by: Sh. Shravan Kumar Meena, CIT DR Date of hearing: 19.08.2025 Date of pronouncement: 28.08.2025 O R D E R PER NIKHIL CHOUDHARY, A.M. This is an appeal filed by the assessee against the order of the learned CIT(Exemption) passed on 11.11.2024 rejecting the application for registration of the Society under section 12A (1)(ac)(iii) filed in Form 10AB. The grounds of appeal are under:-
1. Order passed by CIT Exemption Bhopal rejecting application for registration u/s 12AA ex parte is bad in law as it was passed in complete breach of principle of natural justice.
2. The Ld. Commissioner of Income Tax Exemption-Bhopal erred in law and on facts in rejecting application seeking A V S Shiksha Evam Samajotthan Samiti approval/registration u/s 12AA of the Act, without appreciating facts and law of the case properly.
3. The rejection of registration u/s. 12A (1) (ac) (iii) of the Act will lead to grave financial hardship and hindrances in its charitable activities and accordingly, an early hearing of the captioned appeal be granted.
4. The Appellant also prays that the order passed by the Ld. CIT(E) be quashed/set aside and the Appellant should be granted a fresh opportunity and matter be restored to CIT(E).”
A.Y. 2024-25 AVS Shiksha Evam Samajotthan 2. The facts of the case are that the assessee filed an application in Form 10AB for registration under section 12A (1)(ac)(iii). The ld. CIT(Exemption) issued opportunity letters to the assessee, to file various documents and details so as to enable him to process the said application and verify the objects of the activities of the assessee society. However, he records that there was a request for adjournment in response to the notice dated 11.09.2024, but the subsequent notices issued on 24.09.2024 for compliance on 27.09.2024 and 21.10.2024 for compliance on 6.11.2024, were not complied with. The ld. CIT(Exemption) therefore held, that since the assessee had not submitted the documents and details despite sufficient opportunities and adequate time being granted, it was not possible to process the application of the assessee and therefore, he rejected the application of the assessee in Form 10AB for registration under section 12AB of the Income Tax Act, 1961.
The assessee is aggrieved at this rejection order and has accordingly filed this appeal. Sh. Dheeraj Ghai, C.A. (hereinafter referred to as the ld. AR) submitted that the assessee could not make compliance to the notices of the ld. CIT(Exemption) because the counsels of the assessee were busy finalizing Audit Reports in the month of September, 2024 and furnishing the income tax returns in the month of October, 2024 in respect of assessees whose accounts were audited. It was submitted that the dates of compliance clashed with the period of preparation and filing of Audit Reports and of returns on the basis of those Audit Reports and therefore, there were good reasons to explain the non-compliance before the ld. CIT(Exemption). It was submitted that the ld. CIT(Exemption) should have considered the time period within which non-compliance was made and granted further time to the assessee society to make its submissions. Finally, it was submitted, that since the assessee was prevented by sufficient cause from making the compliance, the matter may kindly be remanded back to the file of the ld. CIT(Exemption) and the ld. AR undertook to ensure compliance in the fresh proceedings.
A.Y. 2024-25 AVS Shiksha Evam Samajotthan 4. On the other hand, Sh. Shravan Kumar Meena, CIT DR (hereinafter referred to as the ld. CIT DR) submitted that the application had been rejected only because the assessee had not submitted any information to the ld. CIT(Exemption) and while he had no objection to the matter being sent back, he submitted that directions should be issued to the assessee to make due compliance before the ld. CIT(Exemption) so that the ld. CIT(Exemption) could pass a reasoned order.
We have duly considered the facts and circumstances of the case. It is seen that the time period involved in the proceedings is the same time period in which Chartered Accountants are busy in finalization of and filing of Audit Reports and preparation of returns on the basis of those Audit Reports. In the circumstances, it is quite clear that there were sufficient reasons for the failure of the assessee to make compliance before the ld. CIT(Exemption). Keeping the same in mind, we restore the matter back to the file of the ld. CIT(Exemption) and direct the assessee to make the necessary compliances before the ld. CIT(Exemption) so that the ld. CIT(Exemption) may appreciate the facts of the case and pass a reasoned order, in accordance with law.
In the result the appeal is allowed for statistical purposes. Order pronounced on 28.08.2025 in the open Court.