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Income Tax Appellate Tribunal, AHMEDABAD “C” BENCH
Before: Shri TR Senthil Kumar & Shri Narendra Prasad Sinha
Date of hearing : 17-12-2024 Date of pronouncement : 20-12-2024 आदेश/ORDER PER : NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER:-
This appeal is filed by the assessee against the order of Commissioner of Income Tax (Exemption), [in short CIT(E)], Ahmedabad dated 20-12- 2023 rejecting the registration of the trust u/s. 12AB of the Income Tax Act [in short I.T. Act], 1961.
A.Y. N.A. Page No. 2 Inklings Education Foundation vs. CIT(Exemption)
There was a delay of 141 days in filing of this appeal. The assessee has filed an affidavit explaining that Dr. Avani Desai, the Managing Director of the assessee company was only responsible person for managing the affairs of the company. She was working as Professor and Dean, School of Doctoral Research and Innovation, GLS University and during that period she was pre-occupied in submitting report for inspection of National Assessment and Accreditation Council (NAAC). As a solely responsible person for preparing the report, she was busy in conducting and coordinating with other Deans and faculty member of GLS university and was totally pre- occupied when the notice and the order of ld. CIT(E) was received in her email. Due to her pre-occupation the notice as well as the order of the CIT(E) had escaped her notice, as result of which the present appeal could not be filed in time. It was only when the Chartered Accountant of the assessee had enquired about the registration application that she realized her mistake and filed the present appeal. Considering the explanation of the assessee, the delay in filing the present appeal is condoned.
The assessee has taken the following grounds in this appeal: -
1. The learned Commissioner of Income tax (Exemption) Ahmedabad [CIT(exemp) has erred both in law and in fact in rejecting application of appellant in Form 10AB filed u/s 12A(1)(ac) (iii) for fresh registration by order u/s 12AB of the Income tax Act 1961 and cancelling provisional registrations on erroneous grounds that appellant failed to satisfy about genuineness of activities and that they were in consonance with objects of the Trust. The order so passed is against the facts and sanction of law. It be so held now.
2. The Ld. CIT(exemption) further erred in law and on facts in not appreciating that not only the objects of appellant were charitable and hence was registered or the basis of such objects under section 8 of the Companies Act, 2013 and had never done activity which is not in accordance with such objects. The refusal to A.Y. N.A. Page No. 3 Inklings Education Foundation vs. CIT(Exemption) grant final/ fresh registration and cancelling provisional registration is patently wrong. It be so held now.
3. The Id CIT(exemp) also erred in law and on facts in observing that as appellant could not file response to his notice about object No: 78 being incidental or ancillary for attainment of main objects, where the said objects is only for furtherance of main objects and the AIA Foundation also being a charitable institution, it was wrongly concluded that said object was not for a general public utility and that it was wholly and exclusively for welfare of AIA Foundation Refusal and rejection on that account is unjustified. It be so held now.
4. The Ld. CIT(exemption) erred in law and on facts in not appreciating that the appellant was prevented by sufficient and reasonable cause in not being able to respond to the notice dated 06.12.2023 regarding object No: 78 and hence adequate opportunity of being heard on the facts were not afforded. All the objects pursued being charitable, registration be directed to be granted as claimed.
5. The order passed by Ld. CIT(exemption) being erroneous and against the provisions of law, deserves to be cancelled. It be cancelled now and registration be directed to be granted as claimed.
6. The appellant craves leave to add, alter, modify or delete any of the grounds at the time of hearing.”
Shri D. K. Parikh, ld. Counsel appearing for the assessee fairly conceded that no compliance could be made before the ld. CIT(E) in response to queries raised in the proceeding u/s. 12AB of the Act. The reason for non-compliance was stated to be the pre-occupation of Dr. Avani Desai, the managing director of the assessee company. The ld. A.R. requested that initially certain basic details were filed on 11-11-2023 but subsequently no compliance could be made to the CIT(E)’s notice dated 06- 12-2023. He submitted that the conclusion drawn by the ld. CIT(E) about the activities of the assessee was not correct and that in the interest of justice A.Y. N.A. Page No. 4 Inklings Education Foundation vs. CIT(Exemption) another opportunity may be allowed to the assessee by setting aside the matter to the ld. CIT(E).
Per contra, Shri A. P. Singh, the ld. CIT-D.R. supported the order of the ld. CIT(E).
We have considered the rival contentions. It is found that the ld. CIT(E) had allowed three opportunities to the assessee on 04-10-2023, 02- 11-2023 and on 06-12-2023. The assessee had only filed part details on 11- 11-2023 and thereafter no compliance was made. When the assessee was aware of the fact that the proceeding was undergoing before the ld. CIT(E) and part of the requirements were submitted on 11-11-2023, we do not find any reasonable explanation for non-compliance made by the assessee on the subsequent date. If the Managing Director of the assessee company was preoccupied, the matter could have been assigned to the other staff member or to a professional person. The reason for non-compliance before the CIT(E) has not been satisfactorily explained. We, therefore, deem it proper to impose a cost of Rs. 5,000/- (Rupees Five Thousand only) on the assessee which should be deposited to the Income Tax Department within two weeks of this order. At the same time, in the interest of justice, we deem it proper to set aside the matter to the file of the CIT(E) with a direction to allow another opportunity of being heard to the assessee and thereafter pass order in accordance with law. The Ld. CIT(E) will proceed in the matter after verifying that the cost has been paid by the assessee.
A.Y. N.A. Page No. 5 Inklings Education Foundation vs. CIT(Exemption)
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 20-12-2024