HASAMSETH PABLIK LAYBRARI AND CHERITEBAL TRUST,AKOLA vs. CIT, EXEMPTION, PUNE

Since the facts and solitary issue involved in these twin appeals are interrelated & interconnected, on the request of rival parties, for the sake of brevity these are heard together for a common and consolidated order.

At the outset, after vouching sufficiency of reasons beyond undeliberate 46 & 50 days delay in instituting these twin appeals, we after placing reliance on ITAT-Nagpur Page 1 of 4 & 229/PUN/2023 12AB & 80G(5)

Briefly stated facts borne out of these case records are; 4.1 The assessee is registered as ‘Hasham Seth Public Library And Charitable Trust’ under the provisions of Bombay Public Trust Act, 1950 [Pg01-02/PB] which obtained a provisional registration u/s 12AB r.w.s. 12A(1)(ac)(vi) & 80G(5)(vi) of the Act in the name ‘Hasamseth Pablik Laybrari And Cheritebal Trust’, pursuant to which it applied for regular registration in Form No 10AB on 29/09/2022 u/s 12A(1)(ac)(iii) under the category of charitable trust/institution and also applied for regular registration u/clause (ii) of first proviso to section 80G(5) of the Act.

We have heard both rival parties; and subject to the provisions of rule 18 of ITAT Rules 1963, perused material placed on record which suggests that, the preliminary submission of the appellant did fail to substantiate its activities so as to draw a reasonable conclusion about the genuineness of the activities and compliance with the applicable laws etc. As a consequence, the Ld. CIT(E) after observing principle of natural justice as commanded by sub-clause (B) of section 12AB(1)(b)(ii) and by clause (ii)(b)(B) of 2nd proviso to 80G(5) of the Act r.w. proviso to rule 11AA(5) of the Income Tax Rules, 1962, rejected these applications which prima-facie in our considered view remained flawless.

We note that, when first notice dt. 13/01/2023 served requiring documents remained unattained, a show cause notice dt. 02/02/2023 was issued and in the event of non-compliance therewith without further opportunity to the appellant the Ld. CIT(E) rejected 12AB application and in the absence of regular 12AB certificate also denied regular 80G registration. This action of the Ld. CIT(E) in our view suffered from reasonable opportunity thus principle of natural justice.

It is to be noted that, in the matter of registration, a reasonable and effective opportunity to the appellant is not only necessary but a must thing to protect against arbitrary rejection. This would also ensure that negative observations (if any) are negated by credible evidences by the appellant. Any proceedings ITAT-Nagpur Page 3 of 4 & 229/PUN/2023 12AB & 80G(5)

For the aforestated reasons, without commenting on merits of the case we deem it fit to set-aside the impugned orders and remand the matter back to the file of Ld. CIT(E) for de-nova adjudication in accordance with law subject to our observation noted at para 4.1 hereinbefore. Needless to state that the assessee shall be provided with not more than two effective opportunities to explain the former discrepancies and further to comply with the requirements as may be directed by the registering authority in this regard.

In result, both these appeals are ALLOWED FOR STATISTICAL PURPOSE. In terms of rule 34 of ITAT Rules, the order pronounced in the open court on this Wednesday, 20th day of March, 2024.