SANKALP BAHUUDDESHIYA SEVA SANSTHA,LATUR vs. CIT EXEMPTION, PUNE

The assessee has raised the following grounds of appeal :- “1. BREACH OF PRINCIPLES OF NATURAL JUSTICE 1.1 The Learned Commissioner of Income Tax (Exemption), Pune ["the Ld. CIT(E)") erred in passing the order rejecting the application made in Form 10AB under section 12A(1)(ac)(iii) and cancelling provisional registration by not granting proper, sufficient and adequate opportunity of being heard to the Appellant while framing assessment. 1.2 While doing so, the Ld. CIT(E) failed to appreciate that as per the principles of natural justice, providing adequate opportunity of being heard to the assessee is mandatory before passing the adverse order. 1.3 In the above circumstances, it is humbly prayed to set aside the order passed by the CIT(E). 2. ERRED IN REJECTING THE APPLICATION IN FORM 10AB 2.1 The Ld. CIT(E) erred in not granting the regular registration u/s 12A/12AB of the Income tax Act, 1961 ['the Act'] and cancelling the provisional registration vide order dated 21.10.2022.

The appeal is late by 244 days. The assessee has filed a sworn affidavit stating therein the reasons for the delay in paras 2 to 9 thereof as under :- “2. I say that the order rejecting the application for registration of trust u/s 12A was served on email ID dcsicl2014@gmail.com on 21.10.2022 and accordingly the last day for fling an appeal before the Hon'ble ITAT was 20.12.2022. However, for the reasons narrated herein, the appeal is being filed on 21.08.2023. As such, there is delay of 244 days (two hundred and fourty four days) in filing of the appeal. 3. I say that the aforesaid email ID was handled by Mr. Ravi Shinde, an employee of the Trust [the employee'] and said receipt of notices/order were not informed by the employee to me or to the Chartered Accountant of the Trust, therefore, the same remained unattended. 4. I say that, it is only at the time of filing of the return of income on 07.12.2022 of the Trust for AY 2022-23, the Chartered Accountant of the Trust logged in to the e-filing portal and he simultaneously to verify the status of the Form 10AB submitted for permanent registration, visited the e proceedings portal, therein he found that the order rejecting the registration has been passed on account of not attendance by the Trust. 5. I say that, the Chartered Accountant immediately informed me about the said rejection order and as per the bonafide belief of the Chartered Accountant, as the procedure of registration has been changed completely, he advised me to apply for fresh registration of the Trust against the rejected application. 6. I say that, under the said advise we once again applied for the fresh provisional registration on 08.12.2022 and same was granted to us on 15.12.2022. 7. Thereafter, on 05.06.2023, we tried filing Form 10AB for the permanent registration, but at the time of uploading of the application it was showing an error and therefore it could not get submitted. I keep trying the same for number of times thereafter, but all the times same error was flashed on the portal. 8. I say that thereafter, with the query of the said error, the Chartered Accountant of the Trust telephoned to the office of the Commissioner of Income Tax (Exemption), Pune [the, CIT(E)] on 10.08.2023 and after discussion with the officer in the office of CIT(E), he informed to the Chartered Accountant that against the rejection order, the Trust has the only remedy to file an appeal before the Hon'ble ITAT and no fresh application for registration can be filed. 9. I say that it is only thereafter, we started the procedure to file an appeal and accordingly the appeal is filed on 21.08.2023.”

Briefly stated, the facts of the case are that on receipt of the assessee’s application filed in Form No. 10AB u/s 12A(1)(ac)(iii) of the Act along with annexures thereto, with a view to verify the genuineness of the activities of the assessee etc., the Ld. CIT(E) issued notice on 25.08.2022 through ITBA portal requiring the assessee to upload certain information / clarification such as date of commencement of activity, date of expiry of provisional registration, details of any other law applicable for achievement of objectives and the proof of compliance of said law, proof of identity of main trustees/directors, list of donors, note on activities carried out etc. under the provisions of section 12AB of the Act. The compliance was sought by 09.09.2022. Another notice was issued on 07.10.2022 to which the compliance was due by 14.10.2022. The assessee was specifically informed that in the event of failure to comply by due date the matter will be decided based on the material available on record. The notice(s) were duly served on the assessee through e-portal/e-mail. The assessee failed to comply to the said notice(s). The Ld. CIT(E) therefore observed that in the absence of compliance to the information/clarification sought for it is not possible to arrive at any conclusion about the genuineness of the activities of the assessee as also compliance to the requirements of any other law for the time being in force by the assessee trust as are material for the purpose of achieving its objects. The Ld. CIT(E), therefore, proceeded to pass impugned order on 21.10.2022 rejected the application of the assessee by observing in para 3.2 of his order as under : “3.2 It is clear that the assessee was given sufficient opportunities to comply, but it has not responded to the same. It seems that the assessee is not having any supporting documents/evidence to submit. The assessee has failed to comply with the provisions of section 12AB(1)(b)(i) of the Income Tax Act, 1961 and hence, the undersigned is unable to draw any satisfactory conclusion about genuineness of activities of the assessee and has left no alternative but to reject the application.”

Dissatisfied, the assessee is in appeal before the Tribunal.

The Ld. AR submitted that non-compliance before the Ld. CIT(E) was due to non-receipt of notice(s) by the assessee. There was no intentional non-appearance before the Ld. CIT(E). He submitted that given an opportunity the assessee is in a position to submit all the requisite details/ documentary evidence before the Ld. CIT(E) to substantiate its case.

The Ld. DR, on the other hand, supported the order of Ld. CIT(E) and submitted that the assessee was given adequate opportunity by the Ld. CIT(E) to present its case still the assessee failed to comply with the provisions of section 12AB of the Act by not submitting any supporting documents/evidence called for, in order for the Ld. CIT(E) to arrive at a specific conclusion about the genuineness of the activities of the assessee trust. The Ld. CIT(E) therefore was fully justified in rejecting the assessee’s application for registration.

We have considered the rival submissions 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 expedient 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 u/s 12A(1)(ac)(iii) of the Act and decide the matter on merits, in accordance with facts and law after allowing adequate opportunity of being heard to the assessee and present its case. The assessee shall provide the requisite support in terms of submitting the relevant details/documentary evidence as may be required/ called upon. We order accordingly.

In the result, the appeal of assessee is treated as allowed for statistical purpose.