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Facts
The assessee filed applications for registration under Section 12AB and approval under Section 80G. The CIT(E) rejected these applications ex-parte without providing sufficient opportunity to be heard. The assessee claims this was due to an incorrect email address being provided by their chartered accountant, leading to non-receipt of notices.
Held
The Tribunal noted that the CIT(E) issued notices in a short span and did not provide sufficient opportunity to the assessee. The mistake regarding the email address was found to be curable. Therefore, the Tribunal restored the matter back to the CIT(E) with a direction to grant an opportunity of being heard.
Key Issues
Whether the CIT(E) erred in rejecting the applications for registration and approval without providing adequate opportunity to be heard, and if the non-receipt of notices due to an incorrect email address constitutes a valid reason for condonation.
Sections Cited
12AB, 80G, 12A(1)(ac)(vi)
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Income Tax Appellate Tribunal, JAIPUR BENCHES,”A” JAIPUR
Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA Nos. 499 & 500/JPR/2024
आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”A” JAIPUR Mk0 ,l- lhrky{eh]U;kf;d lnL; ,oa Jh jkBksM deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA Nos. 499 & 500/JPR/2024 cuke Suraj Charitable Trust The CIT-Exemption, 2nd Vs. Jaipur. 211, Floor, Kailash Tower, Durgapura, Jaipur. LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.:ABATS 8885 N vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksjls@Assesseeby : Shri Dinesh Kumar (Adv.) jktLo dh vksjls@Revenue by: Shri Arvind Kumar (CIT-DR) lquokbZ dh rkjh[k@Date of Hearing :25/06/2024 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 19/07/2024 vkns'k@ORDER PER: DR. S. SEETHALAKSHMI, J.M.
These are two appeals filed by the assessee against two different orders of the Learned Commissioner of Income Tax (Exemption), Jaipur [herein after referred to as “Ld.CIT(E)] both dated 16.02.2024 passed under section 12AB and 80G of the Income Tax Act, 1961 respectively.
2.1 In the assessee has raised following grounds: - “1. That on the facts and circumstances of the case, the Learned CIT (Exemption) Jaipur grossly erred in passing the ex-parte order rejecting the application filed in Form 10AB for seeking registration under Section 12AB of
2. That on the facts and circumstances of the case, the Learned CIT Exemption Jaipur grossly erred in rejecting application seeking registration under Section 12AB of the Act as such rejection of the same is bad in law and illegal.
3. That on the facts and circumstances of the case, the Learned CIT (Exemption) Jaipur grossly erred in not considering the documents submitted along with application of provisional registration filed in Form No 10A, on the basis of which the authority could have verified the genuineness of the activities carried out by the trust.
4. That on the facts and circumstances of the case, the Learned CIT (Exemption) Jaipur grossly erred in rejecting provisional registration without issuing any show case notice and thus order is bad in law and illegal.
5. That the appellant craves leave to add, amend or alter all or any of grounds of appeal and relief claimed before or at the time of hearing.
2.2 In the assessee has raised following grounds: - “1. That on the facts and circumstances of the case, the Learned CIT (Exemption) Jaipur grossly erred in passing the ex-parte order rejecting the application filed in Form 10AB for seeking approval under Section 80G(5) (iii) of the Act without providing sufficient opportunity of being heard and thus order is bad in law and illegal.
2. That on the facts and circumstances of the case, the Learned CIT (Exemption) Jaipur grossly erred in rejecting application under Section 80G(5)(iii) of the Act as such rejection of the same is bad in law and illegal. 2.1 That on the facts and circumstances of the case, the Learned CIT (Exemption) grossly erred in rejecting application under Section 80G(5)(iii) of the Act as non-maintainable and as such rejection of the same is bad in law and illegal.
That the appellant craves leave to add, amend or alter all or any of grounds of appeal and relief claimed before or at the time of hearing.”
registration u/s 12AB of the Income Tax Act, 1961 on 30.09.2023. A letter/notice No. ITBA/EXM/F/EXM43/2023-24/1058878497(1) dated 19.12.2023 was issued at the e- mail/address provided in the application requiring the assessee to submit certain documents/explanations by 29.12.2023, but no compliance has been made by the assessee. Thereafter, a reminder letter was issued vide letter DIN & Notice No. ITBA/EXM/F/EXM43/2023-24/1059689554(1) dated 13.01.2023 wherein date of hearing was fixed as 22.01.2024, but again no compliance has been made the assessee. Further, again one more opportunity was also provided to the assessee vide letter DIN & Notice No. ITBA/EXM/F/EXM43/2023- 24/1059688299(1) dated 13.01.2024 to submit complete details/information by 22.01.2024. This time also on given date, the assessee had not produced any details/documents. Since it was a limitation matter, therefore, the case was decided on the basis of material filed by the assessee along with its application in Form no. 10AB by the ld. CIT(E).
4. Apropos to the grounds so raised by the assessee in the ld. CIT(E) rejected the assessee’s claim of registration 12AB of the Act by observing as under:-
given three opportunities details of which given in para-l. All the above details were sought in order to determine the actual working of the institution. The applicant didn't furnish the sought details. The applicant has not furnished the details along with bill/ vouchers of expenses debited in income and expenditure account for the last three financial years. Further, the assessee was also not submitting the details of bank account for the F.Y. 2021-22 & 2022-23 to till date. The above details were sought from the applicant to determine the actual purpose/nature of expenditures made and to determine whether the impugned charitable activity had actually been done by the trust or not. Such type of verification is necessary to keep a check and balance on the actual working of the trust. Since, the applicant didn't furnish sought details, in the absence of such documents/details, the justification of impugned activity could not be derived and it is not known whether the applicant is genuinely carrying out charitable activity as per its objects. Hence, the applicant has failed to justify the genuineness of activities and thus falls out of the scope of registration u/s 12AB of the Act.
5. In view of above discussion assessee's claim of registration section 12AB is liable to be rejected and thus being rejected on following grounds: - • Incomplete Form 10AB.
• Genuineness of Activities.
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 10.03.2022 is also being cancelled. Further assessee has failed to give proper justification for regularisation of provisional registration, thus with this order provisional registration is also lapsed and cancelled.”
5. Apropos to the ground so raised by the assessee in the ld. CIT(E) rejected the assesee’s claim of exemption u/s 80G of the Act by observing as under:-
“3.6. 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. 80Gof the Act is liable to be rejected as non-maintainable.
In view of above discussion assessee's claim of 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.
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 12.03.2022 is also being cancelled. Further assessee has failed to give proper justification for regularisation of provisional approval, thus with this order provisional approval is also lapsed and cancelled.”
appeals mainly submitted that the assessee if given an opportunity will be able to clarify the queries/ issues raised / details to be submitted and thus in both the case the ld. AR of the assessee prayed that one more chance of presenting the case of the assessee be given.
In this appeal the ld. AR of the assessee submitted a detailed affidavit and the same is extracted here in below: objected to the prayer of the ld. AR of the assessee.
We have heard the rival contentions and perused material available on record. We note that the ld. CIT(E) has rejected the application for permanent registration u/s 12AB of the Act on 16.02.2024. The ld. CIT(E) has issued three notices on 19.12.2023, 13.01.2024 and 22.01.2024 wherein the ld. CIT(E) has served notices in a short span and without giving sufficient opportunities to the assessee. The ld. CIT(E) rejected the application on the grounds that incomplete Form 10AB, Rajasthan Public Trust Act, 1959, Registration not furnished and genuineness of the activities not established. On perusing the record we observe that the appellant has filed an application in Form 10A seeking provisional registration u/s 12A(1)(ac)(vi) of the Act and provisional registration was granted on 10.03.2022. Subsequently, the assessee had filed online application in Form 10AB seeking permanent registration u/s 12AB of the Act on 30.09.2023 before ld. CIT(E), whereas the ld. CIT(E) has not passed order on merits of the case where the impugned order passed by ld. CIT(E) has stated that notices on different dates were issued to the assessee to submit certain documents and explanations where the assessee decide the matter of the application made for registration. Before us, the ld. AR for the assessee has submitted an affidavit in support of his arguments that the reason for not appearing before the ld. CIT(E) is that at the time of filing registration in Form 10AB seeking provisional registration u/s 12A(1)(ac)(vi) of the Act where the e-mail id of Chartered Accountant “GNK & Co.” bearing gnklalsot25@gmail.com was mentioned in the application form.
9.1 Subsequently, the assessee has filed online application for 10AB registration u/s 12AB of the Act on 19.09.2023 and 80G on 13.09.2023, where the application was filed by assessee’s under Chartered Accountant Himanshu Jain & Co but inadvertently the previously reported e-mail id gnkalsot25@gmail.com” was captured in the application form instead of active e-mail id “surajtrustjaipur@gmail.com.
9.2 Further, the ld. AR for the assessee submitted the registration certificate under Rajasthan Public Trust Act, 1959 dated 25.11.2021 from Devsthan Vibhag. case, we note that the above mistake committed by the assessee old Chartered Accountant and new Chartered Accountant and all communications pertaining to the applications of permanent registration u/s 12AB of the Act were sent on wrong e-mail id gnklalsot25@gmail.com (e-mail id of previous Chartered Accountants) and in absence of communication of notices that remained non complied.
9.4 Further the Bench noted that ld. CIT(E) has rejected the applications of the assessee u/s 12AB and u/s 80G(5) of the Act as narrated above in the respective orders that the applicant failed to submit the details called for.
From the order we have persuaded that the details required or incomplete were note on the activity of the trust was not submitted and as regards the registration of 80G the same was rejected as the assessee was not granted the registration u/s. 12AB. Thus, ongoing through afore said query we are of the considered view that the same are curable in nature and if the assessee be given a chance can submit the details and therefore, considering the request of the ld.AR of the assessee we are restoring the matter to the file of the CIT(E) with direction to grant opportunity of being heard in respect of both the applications of the assessee. The Bench does must be provided adequate opportunity of being heard by the ld. CIT(E). In this view of the matter, the Bench feels that the assessee should be given one more chance to contest the case before the ld. CIT(E) and the assessee is directed to produce all the relevant papers concerning both the applications so filed before the ld. CIT(E) to settle the dispute raised hereinabove.
Before parting, we may make it clear that our decision to restore the matter back 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.
In the result, both appeals of the assessee are allowed for statistical purposes.
Order pronounced in the open court on 19/07/2024.