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Facts
The assessee filed two appeals against orders of the Ld. CIT(E) rejecting applications for registration under Section 12AB and approval under Section 80G. The rejection was primarily based on the assessee not being registered under the Rajasthan Public Trust Act, 1959.
Held
The Tribunal noted that the assessee stated they were in the process of obtaining registration under the RPT Act. The Tribunal restored the matters to the file of the Ld. CIT(E) with a direction to decide afresh upon production of the RPT Act registration.
Key Issues
Whether the assessee is eligible for registration under Section 12AB and approval under Section 80G without being registered under the Rajasthan Public Trust Act, 1959.
Sections Cited
12AB, 80G, 12A
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Income Tax Appellate Tribunal, JAIPUR BENCHES,”A” JAIPUR
ORDER PER BENCH: These are two appeals filed by the assessee against two different orders of the Ld.CIT (Exemption), Jaipur both dated 27-03-2024 passed under section 12AB and 80G of the Income Tax Act, 1961 respectively. The grounds of appeal raised by the assessee in both the appeals are as under:-
1. & 710/JP/2024 PARTIVARTAN SEVA SAMITI, KOTA VS CIT (E), JAIPUR U/S 12AB of I.T. Act, 1961 1. The Impugned order u/s 12AB of the Act dated 27.03.2024 is bad in law and on facts, without providing adequate & reasonable opportunity of being heard, being without jurisdiction and for various other reasons and hence the same may kindly be quashed. 2.1 The Ld. CIT(E) erred in law as well as on the facts of the case in rejecting the application for grant of registration/approval u/s 12AB and not granting Registration/approval. The rejection so made and refusal to grant Registration/approval u/s 12AB is contrary to the provisions of law and facts of the case The same may kindly be quashed. 2.2 The ld. CIT(E) erred in low as well as on the facts of the case in rejecting the application for grant Registration/approval u/s 12AB on the alleged reasons that Society is Not registered under RPT Act, 1959 and also not considered the material in their true perspective and sense. Hence the rejection so made and refusal to grant Registration/approval 12AB is contrary to the facts of the case. The same may kindly be quashed.
3. That the impugned order so passed was in the contravention of the law prevalent at the relevant point of time and also on fact and hence may kindly be quashed. The Id. CIT(E) be directed to grant Registration/approval from the date of application U/S 80G of I.T. Act, 1961 1. The Impugned order u/s 80G(5) of the Act dated 27.03.2024 is bad in law and on facts, without providing adequate & reasonable opportunity of being heard, being without jurisdiction and for various other reasons and hence the same may kindly be quashed 2.The Ld. CIT(E) erred in law as well as on the facts of the case in rejecting the application for grant Registration/approval u/s 80G(5)and in not granting Registration/approval. The rejection so made and refusal to grant Registration/approval u/s 80G(5) is contrary to the provisions of law and facts of the case. The same may kindly be quashed.
3. That the impugned order so passed was in the contravention of the law prevalent at the relevant point of time and also on fact and hence may kindly be quashed. The ld. CIT(E) be directed to grant Registration/approval from the date of application & 710/JP/2024 PARTIVARTAN SEVA SAMITI, KOTA VS CIT (E), JAIPUR 3.1 Apropos to the ground so raised by the assessee in the ld. CIT(E) rejected the assessee’s claim of registration u/s 12AB of the Act by observing as under:- 2.5. Assessee vide letter dated 14.12.2023 and SCN dated 20.02 2024 was required to submit documents/explanation, the relevant portion of which is reproduced as under- "Whether the institution is registered under Rajasthan Public Trust Act. 1959, if not, please give explanation that why the same should not be considered as violation of section 12AB(1)(b)(2) of the income Tax Act read with sec 17 of the Rajsathan Public Trust Act, 1959 and decision of Hon'ble Apex Court in the case of New Noble Education Society Civil Appeal No 3795 of 2014 and 19-10-2022 and why the application filed by you should not be rejected. In response the applicant stated that society is registered under Societies Registration Act, 1958 but not registered under RPT Act. The Apex Court decision in the case of New Noble Education Society was related to 10(23C) whereas the applicant trust is registered u/s 12AB. In this connection, it is pertinent to mention here that the Hon'ble Apex Court has in above decision clarified that it is applicable for approval u/s 10(23C) and also for registration u/s 12AB of the Act. Thus, the applicant has failed to prove that the applicant is registered under RPT Act, 1959 as discussed above. In light of above discussion and in the absence of registration under Rajasthan Public Trust Act, 1959 the applicant is not eligible for registration u/s 12AB 03. In view of above discussion applicant's application for registration u/s 12AB is liable to be rejected and thus being rejected on following grounds - Registration under Rajasthan Public Trust Act, 1959.
& 710/JP/2024 PARTIVARTAN SEVA SAMITI, KOTA VS CIT (E), JAIPUR 04. Further 12AB (1)(b)(ii)(B) of the Income Tax Act. 1961 also state that if CIT is not satisfied has to pass order rejecting such application and also cancelling its earlier registration. Thus, it is clarified that applicant's provisional registration under clause (vi) of clause (ac) of sub-section (1) of section 12A of the Income Tax Act. 1961 dated 05.04.2022 is also being cancelled. Further assessee has failed to give proper justification for regularization of provisional registration, thus with this order provisional registration is also lapsed and cancelled.’’ 3.2 Apropos to the ground so raised by the assessee in the ld. CIT(E) rejected the assessee’s claim of exemption u/s 80G of the Act by observing as under:- ‘’3.4. In view of the above the present application filed in Form No.10AB under clause (iii) of first proviso to sub-section (5) of sec 80G of the Act is liable to be rejected as non-maintainable 04. In view of above discussion applicant's application for approval u/s 80G is liable to be rejected and thus being rejected on following grounds Approval u/s 80G cannot be granted without registration u/s 12AB Commencement of activities
5. Further 2nd proviso to 80G(5) also state that if CIT is not satisfied has to pass order rejecting such application and also cancelling its earlier approval. Thus, it is clarified that applicant provisional approval under clause (iv) of first proviso to sub section (5) of section 80G of the Income Tax Act 1961 dated 06.04.2022 is also being cancelled. Further assessor has failed to give proper justification for regularization of provisional approval, thus with this order provisional approval is also lapsed and canceled.’’ & 710/JP/2024 PARTIVARTAN SEVA SAMITI, KOTA VS CIT (E), JAIPUR 3.3 During the course of hearing, the ld. AR of the assessee in both the appeals mainly submitted that the assessee was not provided adequate opportunity of being heard by the ld. CIT(E) and thus both the orders should be quashed being against the principles of natural justice. Further, the ld. AR of the assessee stated at Bar that the assessee trust is in the process of applying the registration under RPT Act before the competent authority and it is likely to get the same. This being the sole reason the assessee prayed for one more chance. 3.4. Per contra, the ld. DR relied on the orders of the ld. CIT(E). 3.5 After hearing both parties and perusing the materials available on record, we noticed that an application for registration u/s 12AB of the Act was rejected by the ld CIT(E) on the ground that the assessee is not registered under RPT Act and in this regard, the ld. AR of the assessee stated at Bar that the assessee trust is in the process of applying the same before the competent authority and it is likely to get the same. Therefore, in these circumstances, we restore the matter back to the file of the ld. CIT(E) with the direction that as and when the assessee trust produces the copy of the Registration under RPT Act, 1959 then the application of the assessee trust for registration u/s 12AB of the Act be decided afresh. 3.6 Since we have restored the appeal of the assessee with regard to the registration u/s 12AB of the Act to the file of the ld. CIT(E) for afresh & 710/JP/2024 PARTIVARTAN SEVA SAMITI, KOTA VS CIT (E), JAIPUR adjudication, therefore, the outcome of appeal of the assessee u/s 80G of the Act is consequential in nature. 3.6 Before parting, we may make it clear that our decision to restore the matter back (supra) to the file of the ld. CIT(E) shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by the ld. CIT(E) independently in accordance with law.