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Income Tax Appellate Tribunal, F Bench, Mumbai
Before: Shri Jason P. Boaz & Shri Sandeep Gosain
This appeal by the assessee is directed against the order of the DIT (Exemptions), Mumbai dated 31.01.2014 rejecting the assessee’s application for Registration under section 12AA of the Income Tax Act, 1961 (in short 'the Act').
The facts of the case, briefly, are as under: - 2.1 The assessee, a company constituted by a MOA dated 29.05.2013 and registered with ROC, Mumbai on 14.06.2013 filed an application for registration before the DIT (Exemptions), Mumbai on 29.07.2013 in Form No. 10A. Notice was issued to the assessee on 08.08.2013 calling for details on as many as 21 points, inter alia, requiring it to furnish copies of PAN Card of Directors, copy of bank account, certificate of registration issued by the Charity Commissioner, copies of audited accounts, note on activities , etc. and verification of original documents. The learned DIT notes that only a few of the details called for were submitted vide letter dated 28.08.2013. Subsequently, inspite of the learned DIT directing the 2 Foundatin for Continuous Medical Education assessee to file the remaining details vide letter dated 06.01.2014 and again in hearing on 09.01.2014, the balance details called for were not filed. In these circumstances the learned DIT(E) observed that due to the assessee’s non-compliance in filing the requisite details called for, he was unable to form any opinion about the merits of the assessee’s application for registration, since there was no material on record to satisfy him about the objects of the assessee company and the genuineness of its activities which are conditions precedent for grant of registration. In that view of the matter, the learned DIT holding that the assessee has failed to fulfil the mandatory procedural requirements prescribed under section 12AA of the Act r.w. Rule 17A, rejected the assessee’s application for registration. 3.1 Aggrieved by the order of the DIT (Exemptions), Mumbai dated 31.01.2014 (No. DIT(E)/u/s.12A/49393/2013-14) rejecting its application for registration under section 12AA(1)(S)(ii) r.w. Rule 17A of the Act, the assessee has preferred this appeal raising the following grounds: - “
1) On the facts and in the circumstances of the case and in law, the Ld. CIT erred in rejecting the application for registration u/s. 12A of the Income Tax Act, 1961 without affording adequate opportunity of being heard to the appellant. 2) On the facts and in the circumstances of the case and in law, the Ld. CIT erred in rejecting the application for registration u/s. 12A of the Income Tax Act, 1961 holding that the appellant is not engaged in activities which are covered within the meaning of charitable purpose appearing in Section 2(15) of the Income Tax Act, 1961 on the ground/s as contained in the impugned order or otherwise. 3) The Appellant crave leaves to add, amend, alter, modify and or withdraw the above ground of appeal, which are without prejudice to one another. The appellant prays this Hon'ble Tribunal to direct the DIT (Exemp.) to grant the registration u/s 12A or any other direction(s) the Hon'ble Tribunal may deem fit.” 3.2.1 We have heard both the learned A.R. of the assessee and the learned D.R. for Revenue and perused the material on record. In the impugned order, the learned CIT(A) rejected the assessee’s application for registration under section 12AA of the Act as under: -
2. A notice dated 08.08.2013 was sent to the applicant requiring it to furnish certain details/documents like PAN cards of Directors, copy 3 Foundatin for Continuous Medical Education of bank account(s), NOC in respect of its office premises, certificate of registration issued by the Charity Commissioner, copies of audited accounts and note on activities undertaken by it duly substantiated with documentary evidence. The Managing Director of the applicant company was called upon to attend the office on 05.09.2013 for the purpose of production and verification of original documents. The assessee vide its letter dt. 28.08.2013 filed in this office on 05.09.2013 submitted part details. Thereafter, vide letter dated 06.01.2014 the applicant was asked to submit pending details on. 13.01.2013. Ms. Prachi Shah from Marian U. Shah & Co. attended. on 09.01.2014 and submitted bank statement. Vide order sheet noting dated 09.01.2014 she was asked to submit the balance details/documents and the case was adjourned to 13.01.2014. However, till date nobody attended nor furnished pending details/documents. Therefore, in view of non-compliance on the part of the applicant company and in absence of requisite details, I am unable to form any opinion about merits of its application for registration.
As per the provisions of Section 12AA(1)(b) a Company is to be granted registration if the Commissioner is satisfied about the objects of the Company and the genuineness of its activities. Both these requirements are cumulative and not alternative. There can be no doubt that the onus is on the applicant to produce all relevant documents/information etc., so as to enable the registering authority to arrive at the requisite satisfaction about the objects of the Company and the genuineness of its activities. The satisfaction of the registering authority cannot be a subjective satisfaction based on whim or caprice. It has to be a bona fide and objective satisfaction, based on due application of mind to a certain set of facts or material before him. The satisfaction of the registering authority is not a pretence or an empty formality but is the foundation of grant or refusal of registration. In other words, such satisfaction is the crux or essence of the registration proceedings. Where the applicant fails to furnish the relevant documents and materials before the registering authority so as to facilitate the process of its arriving at a positive satisfaction, the latter has no option but to refuse the grant of registration.
4. It is a matter of record that the applicant Company has not submitted the details/documents called for. Thus, it is not possible to ascertain the nature of objects for which the Company has been created and whether the same are charitable u/s. 2(15) or not. The applicant Company has not furnished any details of activities actually carried out by it along with supporting documentary evidence. Thus, there is no material on record to enable me to satisfy myself about the objects of the Company and the genuineness of its activities which are conditions precedent for grant of registration. As the applicant Company has failed to fulfill the mandatory procedural requirements prescribed u/s.12AA read with Rule 17A, its application for grant of registration is rejected.”
4 Foundatin for Continuous Medical Education 3.2.2 After hearing both sides and on a perusal of the details on record; like the notice issued by the learned DIT calling for 21 details/ explanations, it was seen from copies of the assessee’s replies dated 20.08.2013 and 06.01.20154 that the assessee had not filed the entire details called for in connection with grant of registration. This fact pointed out by the learned D.R. was fairly concluded by the learned A.R. of the assessee; who pleaded that this matter of Registration be restored to the file of the learned DIT and undertook to furnish the entire details for consideration before the learned DIT. In these circumstances of the case on hand, we are of the considered opinion that the interest of justice would be best served if the impugned order of the learned DIT be set aside and the issue of grant of registration under section 12AA of the Act is restored to the file of the learned DIT for de novo consideration after affording adequate opportunity to the assessee to file details/evidences called for by the learned DIT earlier and in respect of any further queries/details he may call for. It is accordingly ordered.