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Facts
The assessee, a Section 8 Company, applied for permanent registration under section 12AA of the Income Tax Act, 1961. The CIT (Exemptions) rejected the application, stating it was redundant after an amendment to section 12A of the Act. The assessee had also filed a petition for adjournment, which was not considered by the CIT.
Held
The Tribunal held that the assessee should be granted one more opportunity to appear before the CIT (Exemptions) with all relevant documents. The CIT's order was set aside, and the matter was remitted back for a fresh decision after hearing the assessee and considering the records.
Key Issues
Whether the CIT(Exemptions) was justified in rejecting the application for permanent registration without considering the assessee's petition for adjournment and without providing an opportunity to be heard.
Sections Cited
12AA, 12A, 10B
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Income Tax Appellate Tribunal, “C’’ BENCH: BANGALORE
Before: SHRI CHANDRA POOJARI & SHRI SOUNDARARAJAN K.
PER SOUNDARARAJAN K., JUDICIAL MEMBER:
This appeal by the assessee is directed against the order of CIT(Exemption) dated 12.1.2024 in which the CIT (Exemptions) rejected the application filed by the assessee in Form 10B for granting permanent registration u/s 12AA of the Income Tax Act, 1961 (in short “The Act”).
The assessee is a Section 8 Company that was set up on 13th July, 2012 and got registration u/s 12AA of the Act on 26.9.2018. Later on, the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions), Act, 2020 (“The Relaxation Act”) inserted a new clause (ac) in sub-section (1) of section 12A of the Act w.e.f. 1.4.2021. Therefore, the assessee applied for fresh registration in Form 10A and the provisional registration was granted on 31.5.2021 in Form 10AC Tejas International Educational Institutions, Bagalkot Page 2 of 3 for the period from 2022-23 to 2026-27 by the ld. PCIT/CIT. Thereafter, as per the provisions of section 12AB of the Act, assessee applied before the CIT(Exemptions) for getting permanent registration and submitted Form 10AB on 18.7.2023.
The ld. A.R. submitted that the section 12AB of the Act clearly stated that the application for permanent registration should be filed atleast 6 months before the expiry of provisional registration or 6 months from the commencement of Charitable activities, whichever is earlier. Relying on the said provisions, the assessee filed form No.10AB for getting permanent registration. He submitted that the ld. CIT(Exemptions) without considering the provisions including the amendment made to section 12A of the Act in which a new clause (ac) was inserted under subsection (1) of section 12A of the Act had rejected the application as redundant. He further submitted that the assessee filed a petition on 26.12.2023 seeking for an adjournment before the CIT(Exemptions) for the notice issued by him on 13.12.2023 before passing the order on 12.1.2024. The ld. A.R. for the assessee contended that the institution was closed for Christman Holidays upto 25.12.2024 and therefore sought for one more opportunity, but unfortunately, the CIT(Exemptions) had not considered the petition for adjournment and decided the issue ex- parte. Therefore, the assessee sought for an opportunity to appear before the ld. CIT(Exemptions) with all the relevant documents in order to get the permanent registration u/s 12AB of the Act.
We have heard the rival submissions and perused the materials available on record. Admittedly, the assessee had sent a petition on 26.12.2023 through online which was not considered by the ld. CIT (Exemptions) before passing the impugned order on 12.1.2024. Therefore, in the interest of justice, one more opportunity is to be granted to the assessee to appear before ld. CIT (Exemptions) with the records and to satisfy him that the permanent registration is to be granted. We, therefore, set aside the order of ld. CIT