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Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN
Before: Shri Sanjay Arora & Ms. Kavitha Rajagopal
Appellant by: Shri Sherry S. Oommen, Advocate Respondent by: Shri Sanjit Kumar Das, CIT-DR Date of Hearing: 07.03.2024 Date of Pronouncement: 30.05.2024 O R D E R Per: Sanjay Arora, AM This is an Appeal by the Assessee directed against the denial of approval under section 80G(5) of the Income Tax Act, 1961 (‘the Act’) thereto by the Principal Commissioner of Income Tax, Kochi (Pr. CIT), vide his Order dated 21.09.2022.
At the outset, it was, taking us through the impugned order, explained by Shri Oommen, the learned counsel for the assessee, that the same is premised on the notion of the approval being sought as being u/s. 12AA of the Act, which the assessee had in fact already obtained on 24/9/2021, observing the two-step process introduced under the statute (by Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020) w.e.f. 01.04.2021. Elaborating on the same, he continued, that in view thereof, the assessee, Jethro Rehabilitation Trust, a trust set up by a bereaved father, in the loving memory of his son, sought provisional approval 1 | P a g e
(AY : 2022-23) Jethro Rehabilitation Trust v. CIT u/s. 80G(5)(iv), which was confirmed for a two-year period on 17/3/2022. The only manner whereby an approval u/s. 80G(5) can be denied to an applicant is on the ground of non-satisfaction of the conditions set out in s. 80G(5)(vi) of the Act, even as clarified in Rule 11AA of the Income Tax Rules, 1962 (the Rules), as indeed per several decisions in the matter. At the instance of the Bench, he would take us through the relevant provisions of the Act. Shri Das, the CIT-DR, could not rebut any of the contentions made, on the basis of material on record, by Shri Oommen.
We have heard the parties, and perused the material on record. 3.1 The impugned order reads as under: (by way of Annexure to Form 10D): M/s. Jethro Rehabilitation Trust hereinafter ‘the Applicant Assessee’ has applied for Registration/Approval u/s 12AB in Form 10AB on 31/03/2022. 2. In response to the Hearing Notice vide DIN No. ITBA/EXM/F/ EXM43/2022- 23/1044632881(1) dated 12.08.2022, the applicant appeared for hearing on 01.09.2022. 3. On verification of the documents submitted by the applicant it is seen that the mandatory clauses are not included in the Trust Deed/MOA and it needs to be amended.
In view of the facts and circumstances as above, this application in Form 10AB submitted by you is rejected. 3.2 The same is clearly is a cryptic order. Apart from the fact that it refers to s. 12AB of the Act, reference to s. 80G or the rules there-under in conspicuous by its absence. There is no reference therein to the provisional approval u/s. 80G(5)(iv) on 17/3/2022. It is only a perusal of the application dated 31/3/2022 (copy on record), that one discovers that the same is qua an application for approval u/s. 80G(5) r/w r. 11AA of the Rules. It is perhaps for the reason that both the provisions provided for application in the same format that led to it being construed by the competent authority as for another. Whatever may be the cause, it is indeed very unfortunate that an application by a charitable institution is treated in such a careless and cavalier manner, which in fact deserves imposition of cost. There is, resultantly, no question of the assessee’s application being decided on merits, i.e., qua the said grant or (AY : 2022-23) Jethro Rehabilitation Trust v. CIT otherwise of the approval under s. 80G(5)(iv), which an order granting approval or, as the case may be, denying it, is to specify in clear terms along with reasons therefor.
4. We, accordingly, have no hesitation in, setting aside the impugned order, direct (re)adjudication by the competent authority on merits, per a speaking order, and in accordance with law, allowing the assessee a reasonable opportunity of being heard. Shri Oommen would, on the Bench so observing, pray for being heard personally, explaining that the process of hearing has since been centralised. We do not wish to be seen as interfering in the manner prescribed in this regard, i.e., representation, in view of the introduction of the faceless scheme. So, however, in case there is a provision thereunder for the same, it be extended to the assessee following the protocol in its respect, if any, i.e., for personal hearing per physical mode, providing the assessee such opportunity. Needless to add, such a course would have prevented the complete non-consideration on merits of the assessee’s instant application and the consequent hardship. We decide accordingly.