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Income Tax Appellate Tribunal, “B” BENCH, PUNE
Before: SHRI INTURI RAMA RAO & MS. ASTHA CHANDRA
Assessee by : Shri P.S. Shingte Department by : Shri Abhay Kumar Keshari Date of hearing : 18-06-2024 Date of 24-07-2024 Pronouncement : आदेश / ORDER PER ASTHA CHANDRA, JM : Two appeals bearing and 950/PUN/2023 filed by the assessee arise out of separate orders dated 30.06.2023 of the Ld. Commissioner of Income Tax (Exemption), Pune [“CIT(E)”]. These were heard together and are being dispose of by this order. 2. The assessee has raised the following solitary ground:-
1. On the facts and in the circumstances of the case and in law the learned Assessing Officer erred in rejecting an application made in Form No. 10AB under clause (ii) of first proviso to sub section (5) of section 80G of Income Tax Act for getting registration under section 80G(5) of the Income Tax Act, 1961 by rejecting appellants submission your appellant prays to grant of such registration.
The brief facts are that the assessee filed an application in Form No. 10AB under clause (ii) of first proviso to sub-section (5) of section 80G of the Income Tax Act, 1961 (the “Act”) on 10.12.2022 before the Ld. CIT(E). With a view to verify the genuineness of the activities of the assessee and fulfillment of conditions prescribed under clause (i) to (v) of section 80G(5) of the Act, the Ld. CIT(E) issued a notice to the assessee through ITBA portal on 10.03.2023 requiring the assessee to upload certain information/ clarification/details as per the provisions of sub-clause (a) of clause (ii) of second proviso to section 80G(5) of the Act. Compliance was sought by 24.03.2023. The notice was duly served on the assessee through e-portal and e-mail.
According to the Ld. CIT(E), the assessee did not furnish copy of regular registration u/s 12AB or 10(23C) of the Act and its case is not covered under the exclusions provided vide proviso to clause (i) of section 80G(5) of the Act. The Ld. CIT(E) also observed that in fact the application of the assessee in Form No. 10AB for registration u/s 12AB under the provisions of section 12A(1)(ac)(iii) of the Act has been rejected vide order dated 30.06.2023. Therefore, in the case of the assessee the condition (i) of section 80G(5) of the Act is not fulfilled.
In view of the above, the Ld. CIT(E) rejected the impugned application of the assessee without going into the merits of the case. The Ld. CIT(E) also cancelled the provisional approval granted to the assessee on 18.10.2022 under clause (iv) of first proviso to section 80G(5) of the Act.
Aggrieved, the assessee is in appeal before the Tribunal and its solitary ground relates thereto.
The Ld. AR drew our attention to Form No. 10AB submitted along with relevant attachments before the Ld. CIT(E), copy of which is placed at pages 7-44 of the paper book. The Ld. AR further submitted that on receipt of the said application, the Ld. CIT(E) vide notice dated 10.03.2023 pointed out that in the application the section code is wrongly mentioned and required the assessee to furnish details enumerated in para 2 (i) to (xiv) and give explanation on points mentioned in para (xv) (a) to (h) and details with supporting evidence as per item (i) to (n) and to ensure that self certified copies of attachments as per the provisions of Rules 11AA(2) of the Income Tax Rules, 1962 as applicable are submitted. It is contended that the assessee responded vide its letter dated 11.03.2023 (copy at page 57 of the paper book) stating therein, inter alia that the assessee has obtained provisional approval u/s 80G(5) and that while applying for regular approval the assessee has erroneously selected section code “13- Clause (ii) of first proviso to sub-section (5) of section 80G” instead of selecting section code “14-Clause (iii) of first proviso to sub-section (5) of section 80G”. It was also stated that the said mistake was an error free from any mala fide intentions. The assessee undertook to resubmit the application by selecting correct section code.
7.1 The Ld. AR pointed out that another notice dated 18.06.2023 was issued to the assessee by the Ld. CIT(E) (copy of which is at pages 58-59 of the paper book) observing therein, inter alia that objectives and activities are religious in nature; that the provisions of clause (ii) of section 80G(5) read with Explanation 3 are not fulfilled and the case is also not covered under the exclusion provided under section 80G(5B) of the Act; that there is no objective in the trust deed regarding an “Organic vegan food centre to provide food to the visitors”; that the financial statements are not audited etc. Compliance was sought on or before 23.06.2023 on e-portal only. The Ld. AR submitted that vide letter dated 22.06.2023, the assessee sought at least 15 days time more for compliance for the detailed reasons given therein. However, the Ld. CIT(E) passed the impugned order on 30.06.2023 without considering the detailed submission made by the assessee vide reply dated 28.06.2023 (copy of which is placed at pages 70- 124 of the paper book). He, therefore urged that the matter be remanded to the Ld. CIT(E) for fresh adjudication.
The Ld. DR defended the order of the Ld. CIT(E). He submitted that the Ld. CIT(E) has passed the impugned order on the ground of failure to prove the genuineness of the activities of the trust.
We have given careful thought to the submission of the parties and perused the records. It is not in dispute that the assessee accepted its mistake of wrongly selecting section code “13-Clause (ii) of first proviso to sub-section (5) of section 80G” instead of selecting section code “14-Clause
(iii) of first proviso to sub-section (5) of section 80G” in letter dated 11.03.2023 and offered to resubmit the application. There is nothing on record to indicate whether or not the application was resubmitted and considered by the Ld. CIT(E).
It is observed that vide notice dated 18.06.2023 the Ld. CIT(E) raised several issues on which compliance was sought in short time of 5 days by 23.06.2023 and the assessee requested vide its letter dated 22.06.2023 two weeks time for making detailed legal submission in compliance to certain queries with respect to objects of the trust. As regards the genuineness of the activities, it was submitted that the assessee is in the process of collating all the necessary documentary evidence in support of proving the genuineness of its activities. It was also submitted that the assessee has changed his consultant. However the time for compliance was extended by 4-5 days in two spells. The assessee did furnish reply vide letter dated 28.06.2023 (copy of which is placed at pages 70-76 of the paper book) rebutting the points raised in the show cause dated 18.06.2023. It was submitted that though the objects of the trust may be religious but the same is not bar for applying for 80G registration as section 80G(5B) itself provides allowance of 5% for religious expenditure. It was also explained that expenditure of temple etc. were not carried out by the trust but by the trustees in their individual capacity. Thus, the same did not appear in the financial statement of the trust. The position regarding vegan food center was also clarified. Likewise, explanation for non-audit of financial statements, work done by the trust for animal welfare, donation received by the assessee was furnished. Necessary evidence in support including the copy of the decision of Pune Bench of Tribunal in Santshreshtha Gajajan Maharaj Sevabhavi Sanstha Vs. CIT (Exemption) (2023) 221 TTJ 0251 (Pune) (copy at pages 77-124 of the paper book) accompanied the said reply. But nothing was considered by the Ld. CIT(E) in his impugned order.
On the facts and in the circumstances of the assessee’s case, we are of the opinion that the matter deserves to be set aside and restored back to the file of the Ld. CIT(E) for decision afresh on merits taking into account all the material available in the records and after allowing adequate opportunity of being heard to the assessee to present its case. We order accordingly.
In the result, the appeal of the assessee in is treated as allowed for statistical purposes.
The assessee has raised the following solitary ground:-
1. On the facts and in the circumstances of the case and in law the learned Assessing Officer erred in rejecting an application made in Form No. 10AB under sub clause (iii) of clause (ac) of section 12A(1) of the IT Act for getting the registration under section 12AB of the Income Tax Act 1961 by rejecting appellants submission your appellant prays to grant of such registration.
Briefly stated, the assessee filed an application before the Ld. CIT(E) in Form No. 10AB under clause (iii) of section 12A(1)(ac) of the Act on 10.12.2022. On receipt thereof, the Ld. CIT(E) issued notice through ITBA portal on 14.03.2023 to upload certain information/clarification required under the provisions of section 12AB(1)(b)(i) of the Act. Compliance was sought by 29.03.2023. The assessee responded. The Ld. CIT(E) verified the details and documents submitted along with the application and noticed various discrepancies which were duly communicated, reproduced in para 2.1 (i), (ii) and (iii) of the impugned order. The assessee submitted its response and the Ld. CIT(E) stated the assessee’s contentions in para 2.3 of his order. The Ld. CIT(E) was not satisfied with the genuineness of the activities of the assessee for want of satisfactory clarification and supporting documentary evidence. Consequently, he rejected the assessee’s application and cancelled the provisional registration granted u/s 12AB r.w.s. 12A(1)(ac)(vi) of the Act.
Aggrieved thereby, the assessee came up in appeal before the Tribunal and the solitary ground No. 1 relates thereto.
The Ld. AR submitted that the assessee filed an application for provisional registration in Form No. 10AB on 08.11.2022 and provisional registration was granted on 15.11.2022 from AY 2023-24 to AY 2025-26. The assessee applied for registration in Form No. 10AB on 10.12.2022 with relevant attachments (copy of which is placed at pages 7-44 of the paper book). The Ld. AR further submitted that vide letter dated 21.03.2023 the assessee gave point wise reply to the Ld. CIT(E)’s queries raised in notice dated 14.03.2023 (copy of which is placed at pages 189-190 of the paper book). It is contended by the Ld. AR that the Ld. CIT(E) issued yet another notice dated 18.06.2023 and sought compliance on or before 23.06.2023. The assessee requested for 15 days time to reply and gave reasons therefor stating, inter alia that the assessee is in the process of collating all the necessary documentary evidence in support of proving the genuineness of its activities and that it has recently changed its consultants. The Ld. CIT(E) did not accept to the request of the assessee and gave 4-5 days time in two spells for compliance. In its letter dated 28.06.2023 the assessee submitted to the Ld. CIT(E) that the points mentioned in the show cause notice for 12A registration also form part of show cause notice for 80G registration for which detailed submission dated 28.06.2023 for final registration u/s 80G has been given and requested the Ld. CIT(E) to refer and accept the same. However, the Ld. CIT(E) passed the impugned order which the Ld. AR pleaded is not sustainable and deserves to be set aside. In support, he relied on the following decisions : I. Jain Shwetamber Mandir Trust Vs. CIT (Exemptions) in II. Brahman Sabha Karveer Vs. CIT (Exemption) in ITA No. 626/PUN/2020; III. Arate Foundation Vs. CIT (Exemption) in ITA No. 132/PUN/2021; IV. Hari Om Sewa Dal Vs. CIT (Exemptions) in ITA Nos. 2285 & 2286/Del/2015; V. Raghunath Das Damodardas Lohia Charitable Trust Vs. Director of Income-tax (Exemptions) (2015) 44 ITR (T) 161 (Hyderabad-Trib.); VI. Vanita Vishram Trust Vs. Chief Commissioner of Income-tax (2010) 327 ITR 121 (Bombay); VII. Ananda Social & Educational Trust Vs. CIT (2020) 426 ITR 340 (SC); VIII. CIT (Exemptions) Vs. Jagannath Gupta Family Trust (2019) 411 ITR 235 (SC).
The Ld. DR supported the order of the Ld. CIT(E).
We have considered the submission of the parties and perused the records. It is not in dispute that in response to notice dated 14.03.2023 issued by the Ld. CIT(E), the assessee furnished reply on 21.03.2023 stating therein, inter alia that the assessee commenced its activities from the beginning of the Financial Year (“FY”) 2021-22; that it is complying with all the requirements of law as are mandated for the purpose of its objects enumerated in the trust deed; that the trust was registered on 19.10.2020 and no donation was received in FY 2020-21 and in FY 2021- 22 donation was received in cash from individuals (list of donors attached); that trust has given no donation during the last three years; that bank account statements from the date of opening annexed; that report on activities carried by the trust is annexed.
Thereafter, the Ld. CIT(E) vide notice dated 18.06.2023 raised several issues on which compliance was sought by 23.06.2023. The assessee requested for 15 days time for making detailed legal submission in compliance to certain queries with respect to objects of the trust. As regards query about genuineness of the activities, the assessee submitted that it was collating necessary documentary evidence. However, a short time of 4-5 days was allowed to the assessee.
None-the-less the assessee furnished reply, gist of which we have mentioned in para 10 of our order of even date in assessee’s appeal in ITA No. 949/PUN/2023. However, the Ld. CIT(E) has not considered the assessee’s rebuttal to the queries raised by him in his show cause notice dated 18.06.2023 and proceeded to pass the impugned order observing that the assessee has not furnished any satisfactory clarification and supporting documentary evidence on the genuineness of its claimed activities.
In our opinion, the approach of the Ld. CIT(E) is not just and fair. We, therefore deem it fit to set aside the matter and remit it back to the file of the Ld. CIT(E) for decision afresh on merits considering all the material available in the records and the legal precedents relied upon by the assessee after allowing adequate opportunity of being heard. We order accordingly.
In the result, the appeal of the assessee in is treated as allowed for statistical purposes.
To sum up, both the appeals of the assessee in & 950/PUN/2023 are allowed for statistical purposes.