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Income Tax Appellate Tribunal, NAGPUR BENCH, NAGPUR
Before: HON’BLE SHRI S. S. GODARA & SHRI G. D. PADMAHSHALI
(Through Virtual hearing from ITAT, Pune) BEFORE HON’BLE SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI G. D. PADMAHSHALI, ACCOUNTANT MEMBER आयकर अपीलसं. / & 231/NAG/2023 Shri Saraswati Education Society Tirupati Tantra Niketan, Keshav Nagar, Akola-444001 PAN:AAFAS3857B . . . . . . . अपीलार्थी / Appellant बनाम / V/s. Commissioner of Income Tax Exemption, Pune. . . . . . . .प्रत्यर्थी / Respondent द्वारा / Appearances Assessee by : Mr Mahavir Atal [‘Ld. AR’] Revenue by : Mr K C Kanojiya [‘Ld. DR’] सुनवाई की तारीख / Date of conclusive Hearing : 20/03/2024 घोषणा की तारीख / Date of Pronouncement : 20/03/2024 आदेश / ORDER PER G. D. PADMAHSHALI, AM; The present twin appeals of the assessee are assailed against separate orders of Ld. Commissioner of Income Tax (Exemption), Pune [‘CIT(E)’] both dt. 30/03/2023 passed u/s 12AB(4) & 80G(5) of the Income-tax Act, 1961 [‘the Act’] respectively.
Since the facts and solitary issue involved in these twin appeals are interrelated, 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 49 & 56 days delay in instituting these appeals, we after placing reliance on ‘Vijay Vishin Meghani Vs.DCIT & Anr’ reported 398 ITR 250(Bom) & ‘Collector, Land ITAT-Nagpur Page 1 of 4
Shri Saraswati Education Society Vs CIT(E) & 231/PUN/2023 Acquisition, Anantnag and Anr. Vs Ms Katiji and Ors’ [167 ITR 5 (SC)], deem it fit to condone the delay requoting that ‘none should be deprived of adjudication on merits unless found that the filing of appeal is deliberately delayed.’ 4. Briefly stated facts borne out of these case records are; 4.1 The appellant assessee was accorded a provisional registration u/s 12AB r.w.s. 12A(1)(ac)(vi) & 80G(5)(vi) of the Act, pursuant to which it had e-filed application in Form No 10AB on 24/09/2022 for seeking grant of regular registration u/s 12A(1)(ac)(iii) under the category of charitable trust / institution and further an application in Form 10AB of even date thereby applied for regular registration u/clause (ii) of first proviso to section 80G(5) of the Act.
4.2 By the impugned order passed u/s 12AB(4) of the Act, the Ld. CIT(E) denied to grant regular 12A registration to the assessee and further cancelled the provisional registration granted to it u/s 12AB r.w.s. 12A(ac)(vi) of the Act for the solitary reason of non-furnishing of pre-requisite documents as envisaged u/s 12AB(1)(b)(i) r.w.r 17A(2) of IT-Rules, 1962 so as to enable the registering authority to ascertain overall nature and genuineness of activities the appellant engaged into and also to ascertain the compliance of such applicable requirements of any other law for the time being force which are material for the purpose of achieving appellant’s objectives etc. In the absence of certificate of regular 12AB registration, by a separate order the Ld. CIT(E) also rejected the appellant’s application for regular 80G(5) registration in limine and in consequence withdrawn the provisional 80G(5) registration granted u/c (vi) thereof. ITAT-Nagpur Page 2 of 4
Shri Saraswati Education Society Vs CIT(E) & 231/PUN/2023 4.3 Aggrieved by the aforestated rejections and cancellation of provisional registrations, the assessee set-up these twin appeals against respective impugned orders alleging violative of principle of audi alteram partem.
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. 02/01/2023 remained unresponded, a show cause notice was issued and in the event of non-compliance without further opportunity to the appellant the Ld. CIT(E) rejected 12AB application and resultantly the rejection of 80G application. This in our view is not confirming the adherence to 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 culminated without effective notice and reasonable opportunity would be ITAT-Nagpur Page 3 of 4
Shri Saraswati Education Society Vs CIT(E) & 231/PUN/2023 violative of principle of natural justice, which de-facto turns the proceedings bad in law and therefore deserving to be set-aside in view of the ratio laid down by Hon’ble Rajasthan High Court in ‘Sanatan Dharm Mahaveer Dal Vs CIT’ reported in 252 ITR 46.
Without finding much fault with the impugned orders, the appellant candidly accepted its inaction, however to our satisfaction has explained the reasons beyond such non-compliance. These reasons in our considered view are sufficiently reasonable to set-aside the impugned orders and remand the matter back to the file of Ld. respondent for de-nova consideration. In view thereof without offering any comment on merits of the case, we set-aside both the impugned orders, and remand the matter back to the file of Ld. CIT(E) with a direction to accord a ONE more effective opportunity in each case and to decide the issue a fresh in accordance with law.
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.