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Assessee by Shri Denish Mashroowala, C.A and Shri Dinesh Radadiya, Advocate. Department by Shri Ashok B. Koli (CIT-DR) Date of Institution of Appeal 01/05/2023 Date of hearing 10/07/2023 Date of pronouncement 10/07/2023 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)] dated 03/03/2023 in rejecting the application of assessee- trust for registration under Section 12AB of the Income Tax Act, 1961 (in short, the Act). The assessee has raised following grounds of appeal: “(1) The learned CIT(Exemption) Ahmedabad has rejected application for registration U/s 12AA of Income Tax Act, 1961 on procedural ground. The applicant failed to upload the details under bonafide account for FY 2020-21 and FY 2021-22. (2) Assessee/Trust are already submitted three year financial statement with application (Form No. 10AB) so assessee/trust are under Shree Valaki Education Trust Vs CIT(E) impression that assessing officer required the same three year financial statement, so same document submitted second time. (3) General notice to all applicant and very short time period for reply, no specific notice for requisite documents.”
2. Brief facts of the case are that the assessee is filed an application for registration under Section 12AB of the Act in Form 10AB in accordance with Rule 17A of the Income Tax Rules, 1962, (in short, the Rules) on 12.09.2022. The assessee furnished necessary details at the time of filing application electronically/online. On receipt of such application, the ld. CIT(E) issued notice dated 10/12/2022 and subsequently on 03/01/2023 for requiring certain details including the Form No. 10AB, certified copies of annual accounts of three years preceeding to the filing of application. The assessee filed required details alongwith accounts for F.Y. 2017-18, 2018-19 and 2019-20. No accounts for F.Y. 2020-21 and 2021-22 was furnished. The ld. CIT(E) on considering such details, noted that in absence of accounts for F.Y. 2020-21 and 2021-22, the genuinenity of activities could not be verified vis a vis object of assessee. Even the verification of object as per constitution deed activities could not be verified. The ld. CIT(E) was of the view that for granting registration under Section 12AB of the Act, he was required to specify about genuineness of activities of the trust or institution and those activities are in consonance of the object of the trust or institution, thus in absence of required details, the ld. CIT(E) rejected the application vide impugned Shree Valaki Education Trust Vs CIT(E) order dated 04/03/2023. Aggrieved by the order of ld. CIT(E), the assessee has filed present appeal before this Tribunal.
We have heard the submissions of learned Authorised Representative (ld. AR) of the assessee submits and the learned Commissioner of Income Tax-Departmental Representative (ld. CIT-DR) for the revenue. The ld. AR of the assessee submits that initially the assessee furnished complete details alongwith Form 10AB in accordance with Rule 17A of the Rules while filing/uploading the application for registration on 12.09.2022. The ld. CIT(E) in para 7 of the impugned order, has accepted that the assessee as a trust has uploaded copy of constitution deed alongwith details of registration with Charity Commissioner. The ld. CIT(E) also accepted that the assessee has furnished accounts for F.Y. 2017-18, 2018-19 and 2019-20 as recorded in para 8 of impugned order. However, the assessee could not furnish the accounts for F.Y. 2020-21 and 2021-22 due to paucity of time. The assessee trust undertake to furnish further required details, before the ld. CIT(E) for its satisfaction for examining the genuinenity of activities in accordance with object of trust. The ld. AR of the assessee submits that they have very good case on merit and will certainly succeed if one more opportunity is given to furnish the required details and to reconsider their application afresh.
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 assessee has not furnished Shree Valaki Education Trust Vs CIT(E) required details and evidences qua the activities if any carried out in consonance with the object of the assessee. In absence of such information and evidence, the ld. CIT(E) rightly rejected the application of assessee for 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 find that there is no dispute that the assessee furnished copy of trust deed/instrument of trust, details of registration with charity Commissioner and audited accounts for F.Y. 2017-18 to 2019-20. Only audited accounts for F.Y. 2020-21 and 2021-22 were not furnished as required by ld. CIT(E). The ld. AR of the assessee submits that they were given very short time to make response and they are still ready to furnish required details including audited accounts for F.Y. 2020-21 and 2021-22. Considering the fact that the assessee has raised specific grounds of appeal and made submission that they could not furnish accounts for F.Ys. 2020-21 and 2021-22 due to paucity of time, therefore, we deem it appropriate to restore the issue back to the file of ld. CIT(E) to allow the assessee to file requisite details of activities undertaken including audited accounts for F.Ys. 2020-21 and 2021-22. 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.
Shree Valaki Education Trust Vs CIT(E) In the result, grounds of assessee’s appeal is allowed for statistical purposes. 6. In the result, this appeal of assessee is allowed for statistical purposes. Order pronounced on 10/07/2023 in open court.