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Assessee by Shri Hiren Vepari, C.A. Department by Shri Ashok B. Koli (CIT-DR) Date of Institution of Appeal 26/04/2023 Date of hearing 11/07/2023 Date of pronouncement 11/07/2023 Order under Section 254(1) of Income Tax Act PER: PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by the assessee-trust is directed against the order of learned Commissioner of Income Tax, (Exemptions), Ahmedabad [in short the ld. CIT(E)] in rejecting the application for approval of Trust under Section 80G(5) of the Income Tax Act, 1961 (in short, the Act) vide order dated 27/02/2023. The assessee has raised following grounds of appeal: “(1) The learned CIT(Exemption) was not justified in rejecting application for recognition u/s 80G. (2) Without prejudice to the above, with the application u/s 80G only premised upon the rejection of application u/s 12AB and that the Tribunal setting aside the order u/s 12AB, the order appealed against rejection of application of section 80G may also be set aside.
St. John Ambulance Association Vs CIT(E) (3) All of the above grounds are prejudice to one another. (4) The appellant craves leave to add, alter or vary any of the grounds of appeal
.”
2. Brief facts of the case are that the assessee-trust filed an application for approval of the Trust under Section 80G(5) of the Act in Form 10AB in accordance with Rule 11AA of the Income Tax Rules, 1962, (in short, the Rules) on 12.08.2022. The assessee furnished required details at the time of filing application electronically/online. On receipt of such application, the ld. CIT(E) issued specific notice dated 17/02/2023 contending therein that as to why the application under Section 80G(5) should not be rejected in absence of registration under Section 12AB of the Act. In response to such show cause notice, the assessee submitted that the application of assessee’s registration under Section 12AB was rejected, which has been challenged before the Tribunal vide wherein hearing has been concluded on 06/02/2023 and the order is awaited. The assessee prayed for keeping the matter in abeyance till decision of Tribunal in assessee’s appeal against rejection of application under Section 12AB of the Act. The reply of assessee was not accepted by the ld. CIT(E) by holding that the application for approval under Section 80G(5) was filed on 12/08/2022 and same needs to be disposed off on or before 28/02/2023. Further Section 80G(5) stipulates that this Section applies on donations to any institution or fund referred to in sub clause (iv) of clause (a) of sub-section (2) of Section St. John Ambulance Association Vs CIT(E) 80 only, if it is established for the charitable purpose and fulfills other conditions laid down therein. The ld. CIT(A) on such observation, rejected the application for approval vide his order dated 27/02/2023. Aggrieved, by the order of rejection, the assessee has filed present appeal before the Tribunal.
We have heard the submissions of learned Authorised Representative (ld. AR) of the assessee and the learned Commissioner of Income Tax- Departmental Representative (ld. CIT-DR) for the revenue. The ld. AR of the assessee submits that against the rejection of application under Section 12AB of the Act, the assessee filed appeal before the Tribunal vide which was adjudicated vide order dated 21/03/2023 wherein the Tribunal has already directed the ld. CIT(E) to examine the documents, details and evidences filed by assessee and grant registration under Section 12AB of the Act in accordance with law. The ld. AR of the assessee further submits that the Tribunal has given finding that the assessee has submitted entire details, documents and evidences for registration under Section 12AB in Form 10AB which should be accepted after proper verification. The ld. AR of the assessee submits that once the Tribunal has given a categorical finding for granting registration under Section 12AB, the application of assessee for approval under Section 80G(5) of the Act needs afresh consideration as the assessee fulfilled all the other remaining required conditions. The ld.
St. John Ambulance Association Vs CIT(E) AR of the assessee submits that a clear finding may be given to the ld. CIT(E) to grant approval to the assessee under Section 80G(5) of the Act.
On the other hand, the ld. CIT-DR for the revenue supported the order of ld. CIT(E). The ld. CIT-DR submits that the application of assessee was rejected for want of registration under Section 12AB of the Act which is a condition precedent yet the assessee has to fulfill other requisite condition which has not been examined by the ld. CIT(E). Therefore, if the Bench is of the view that the application of assessee has any merit, the matter may be restored back to the file of ld. CIT(E) to examine other requisite condition including registration under Section 12AB of the Act.
We have considered the submissions of both the parties and have gone through the order of ld. CIT(E) carefully. We have also perused the record. We find that the application for approval under Section 80G(5) of the Act was basically rejected by the ld. CIT(E) on the ground that there is no registration under Section 12A/12AA or 12AB of the Act which is a precondition for granting approval. Considering the fact that vide order dated 21/03/2023 in the Tribunal has already directed the ld. CIT(E) to examine the requisite evidence and details and grant registration under Section 12AB of the Act, therefore, this appeal is also restored back to the file of ld. CIT(E) to pass the order St. John Ambulance Association Vs CIT(E) afresh after considering other remaining requisite condition for approval under Section 80G(5) of the Act and pass order in accordance with law. Needless to direct that before deciding the application afresh, the ld. CIT(E) shall grant opportunity of hearing including to make further submission to prove the object of assessee-trust and its activities. In the result, grounds of assessee’s appeal is allowed for statistical purposes.
In the result, this appeal of assessee is allowed for statistical purposes. Order pronounced on 11/07/2023 in open court.