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Income Tax Appellate Tribunal, AHMEDABAD “A” BENCH, AHMEDABAD
Before: SMT. ANNAPURNA GUPTA & Ms. SUCHITRA KAMBLE
PER SUCHITRA KAMBLE, JUDICIAL MEMBER :
This appeal is filed by the assessee against order dated 25.08.2023 passed by the CIT(Exemption), Ahmedabad rejecting registration under Section 12AB of the Act.
The assessee has raised the following grounds of appeal :-
“1. Cancellation of the provisional registration of the trust u/s.10(23C) applied through the form no.10AB u/s.12A(1)(ac)(ii); Hon. CIT (Exemption) is failed to consider the documents submitted by the trust and has hurriedly cancelled the provisional registration u/s.10(23C) without any Aurther inquiry completely ignoring the genuineness of the activities of the trust i.e. running of an educational Institution (Nursing College) named Hon. CIT (Exemption) had material on hand, showing genuine activities of the trust including audit reports, books of accounts, registration of the trust, English translated copy of the trust deed, list of trustees and their KYCs, objects of the trust and notes on Page 2 of 4 activities etc. from these many documents, he just raised a query and again sought too much information whereas given very limited time (only 5 days) to the trust for submission. Trust is operating in remote place of village Bhadthar in Jamkhambhalia taluka, which is rural area having limited resources and counsels to response the income tax quеries. Hence, due to non-submission of response of show cause on time, Hon. CIT (Exemption) has not given any further opportunity, nor he has further inquired about the trust and has simply passed an order mentioning that he is not satisfied about the genuineness of the activities of the trust due to not receiving of response of few queries on prescribed time. Therefore, your honour is requested to consider the genuineness of the activities of the trust, consider the documents and consider the response to the query of the Hon. CIT (Exemption) and approve the application of exemption u/s.10(23C) The Trust is running medical college as educational activity which is in line with the main object of the trust deed of the trust. The trust was originally registered under Charity Commissioner - Gandhinagar Vide registration No.E/731/ Gandhinagar. Subsequently, on 30-05-2022 Charity Commissioner, Ahmedabad passed a transfer order for jurisdiction transfer from Gandhinagar to Devbhoomi Dwarka and cancelled registration under Charity Commissioner, Gandhinagar. Thereby, Trust possess only one registration under Devbhoomi Dwarka. Further, the assesses has responded to all the earlier notices. However, reply to notice dated 17-08-2023 was not furnished since trustee were in rural area working for the trust, they did not had accesses to the notice. This was unintentional mistake on part of trustees. Considering the above, the trust therefore has only one registration with one trust deed working towards educational charitable activity. Therefore, it is prayed that the cancellation of registration by Ld. CIT (Exemption) be directed to be deleted in the interest of justice. The appellant reserves his right to add, modify or delete all or any of the Grounds of appeal during or before hearing of this appeal.”
The assessee is a Charitable Trust running Nursing Institute in the name of “Shree Divine Institute of Nursing” at Bhadthar Village since 2017. The assessee applied for registration under Section 12AB and under Section 80G of the Income Page 3 of 4 Tax Act, 1961 on 07.01.2021 in Form No.10A and Form No.10G respectively. The assessee was granted provisional registration under Section 12AB and under Section 80G of the Act on 27.05.2021 and received Form No.10AC for the period assessment year 2021-22 to assessment year 2023-24. Thereafter, the assessee filed Form No.10AB on 21.02.2023 for granting final registration. The assessee received notice dated 11.07.203 from the CIT (Exemption) asking details and documents required to be submitted against application filed in Form No.10AB by the assessee on 21.0.2023. In response to the same, the assessee filed reply on 02.08.2023 and 09.08.023 and submitted various details. The assessee received notice dated 17.08.2023 requiring some clarification and submission of pending documents. The time to submit reply to the said notice was just 4 days i.e. 22.08.2023 and, therefore, the assessee could not submit details as on the said date. On 25.08.2023 the CIT(Exemption) rejected the application filed in Form No.10AB under Section 12A(1)(ac)(iii) of the Act and cancelled the provisional registration. The CIT (Exemption) held that as per Form No.10AB the assessee is registered with Deputy Charity Commissioner, Gandhinagar dated 12.10.2000 and filed certificate of registration dated 09.09.2022 registered with Deputy Charity Commissioner, Devbhoomi Dwarka. Thus, there were two Trust Deeds as on l 09.09.2022 as well as Audit Report filed for assessment years 2019-20, 2020-21 and 2021-22 in the name of Yadunandan Education Charitable Trust.
Being aggrieved by the Order under Section 12(A)(1)(ac)(iii) of the Act passed by the CIT(Exemption), the assessee is before us.
The Ld. AR submitted that the CIT(Exemption) has not given opportunity to the assessee to explain the details related to the filing of the application and two trust deeds as stated by the CIT (Exemption). Therefore, the Ld. AR requested that the matter may be remanded back to the file of the CIT (Exemption) for proper adjudication of the matter and the assessee be given opportunity of hearing.
The Ld. DR relied upon the order of the CIT (Exemption).
We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the assessee was not given Page 4 of 4 sufficient opportunity to explain as well as to file the details related to the issue of two trust deeds. Therefore, it will be appropriate to remand back this matter to the file of the CIT (Exemption) for proper adjudication of the issues and decide the application of the assessee after giving opportunity of hearing.
In the result, appeal of the assessee is partly allowed for statistical purpose.
Order pronounced in the open Court on this 28th February, 2024.