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Income Tax Appellate Tribunal, A BENCH, PUNE
Before: SHRI RAMA KANTA PANDA & MS. ASTHA CHANDRA
आदेश / ORDER
PER MS. ASTHA CHANDRA, JM
The appeal filed by the assessee is directed against the order dated 17.08.2024 of the Ld. Commissioner of Income Tax (Exemption), Pune [“CIT(E)”] whereby he rejected the application of the assessee filed before him in Form No. 10AB on 14.02.2024 under section 12A(1)(ac)(iii) of the Income Tax Act, 1961 (The “Act”).
The assessee has raised the following grounds of appeal:- “1. The Ld CIT Exemption erred in law and on facts in rejection of application for registration u/s 12A(1)(ac)(iii) without considering the facts and circumstances of the case.
2. The Ld CIT Exemption erred in law and on facts in rejecting application for registration u/s 124(1)(a)(i) and cancelling provisional registration granted on 06/10/2021 without serving show cause notice of hearing on the ground that the assesse has failed to substantiate genuineness of its activities. The appellant prays for opportunity so as to explain its case. 3. The appellant craves leave to add, alter, modify or substitute any ground of appeal at the time of hearing.”
3. Briefly stated, the facts of the case are that on receipt of application filed in Form 10AB under section 12A(1)(ac)(iii) of the Act alongwith annexures thereto, with a view to verify the genuineness of activities of the assessee etc, the Ld. CIT(E) issued notice on 01.05.2024 requiring the assessee to upload certain information/clarification such as date of commencement of activity with proof, date of expiry of provisional registration, details of any other law applicable for achievement of objectives and the proof of compliance of such law, proof of identity of the main trustee/managing trustees/Directors/President/Secretary of the institution, list of donations, note on activities, etc. under the provisions of section 12AB of the Act. The compliance was sought by 16.05.2024. The notice was served through e-portal and e-mail. On verification of details submitted by the assessee in response to the said notice and the documents submitted alongwith the application, various discrepancies were noticed by the Ld. CIT(E) resulting in issuance of another show cause notice on 01.08.2024 communicating the said discrepancies thereof. The assessee was requested to show cause as to why the application should not be rejected and why the registration granted under section 12AB of the Act should not be cancelled. The assessee was specifically informed that in the event of failure to comply by 08.08.2024, the application shall be liable to be rejected and the provisional registration shall also be liable to be cancelled. The show cause notice was duly served through e-mail portal/e-mail in response to which the assessee furnished its reply on 10.08.2022. On verification of the documents submitted by the assessee the Ld. CIT(E) observed as under :- “7. The assessee furnished response on 10/08/2022. It, however, has not furnished any written submission on the issues raised in the show cause notice. On verification of the documents submitted by the assessee it is found that all bills furnished by the assessee pertain to expenditure on utsav, celebration and they do not prove any charitable activities. In support of its claim the photographs submitted by the assessee shows general gathering of the people and organization of dance/lavni/mela and these activities also does not form part of any charitable activities. In form 10AB, nature of trust has been mentioned as charitable whereas objects mentioned are of religious nature. Despite a specific query to that effect, the assessee failed to furnish any credible explanation / evidences regarding show cause notice point no 2(iii) issued vide dated 01/08/2024 and thus failed to substantiate the genuineness of its activities/trust. The assessee was also requested to furnish a note on activities actually carried out, with details of date and place of each activity, details of beneficiaries, how they were identified. other relevant information. It, however, failed to furnish the same either in response to the first notice or in compliance with the show cause notice.
In view of the facts discussed in the show notice, the discrepancies noticed and also that the assessee has not complied with the provisions of section 12AB(1)(b)(i) of the Income Tax Act, 1961 as well as the provisions of Rule 17A(2) of Income Tax Rules, 1962 in spite giving sufficient opportunities, the undersigned is not satisfied about the genuineness of activities of the assessee and compliance of requirements of any other law for the time being in force by the assessee as are material for the purpose of achieving its objects.”
In view of the facts narrated above, the Ld. CIT(E) proceeded to pass the impugned order thereby rejecting the application filed by the assessee and also cancelling the provisional registration granted on 06.10.2021 to the assessee.
Dissatisfied, the assessee is in appeal before the Tribunal 6. The Ld. AR submitted that the non-compliance before the Ld. CIT(A) has occurred due to lack of adequate opportunity of hearing granted to the assessee. The Ld. CIT(E) issued one notice on 01.05.2024 to which the compliance was sought by 16.05.2024. The assessee filed its response to the said notice which was followed by a show cause notice issued on 01.08.2024 by the Ld. CIT(E) noting various discrepancies thereto. The assessee furnished the response on 10.08.2024 in response to the said show cause notice which was due to be filed by 08.08.2024. However, the response of the assessee was not found to be satisfactory by the Ld. CIT(E) for the reasons recorded by him in Para 7 of his order reproduced above. The Ld. AR submitted that given an opportunity the assessee is in a position to submit all the requisite/relevant details/documentary evidence before the Ld. CIT(E) and explain the assessee’s case including the discrepancies cited by him. The Ld. AR therefore requested that the matter may be set aside to the file of the Ld. CIT(E) to consider the assessee’s application afresh on merits. The Ld. DR, on the other hand, supported the order of the Ld.
CIT(E) and submitted that the assessee was granted adequate opportunity by the Ld. CIT(E) to present its case, still the assessee failed to prove the genuineness of the activities of the trust to the satisfaction of the Ld. CIT(E). The Ld. CIT(E) was, therefore, fully justified in rejecting the assessee’s application for regular registration and cancelling the provisional registration.
We have considered the rival submission and perused the records. On the facts and in the circumstances of the assessee’s case, we are of the view that it would be judicially prudent and in the interest of justice and fair play if the matter is restored back to the file of Ld. CIT(E) to consider afresh the assessee’s application for registration under section 12A(1)(ac)(iii) of the Act in accordance with facts and law after allowing adequate opportunity of being heard to the assessee and present its case. The assessee shall provide requisite support in terms of submitting the relevant details/documentary evidence as may be required/called upon on the appointed date failing which the Ld. CIT(E) shall be at liberty to pass appropriate order as per law. We order accordingly.
In the result, the appeal of the assessee is treated as allowed for statistical purposes.