Case Law Details
Mulnivasi Publication Trust Vs CIT (ITAT Pune)
The Pune Bench of the Income Tax Appellate Tribunal heard an appeal filed by the assessee against the order dated 29.01.2024 passed by the Commissioner of Income Tax (Exemption), Pune rejecting the assessee’s application filed in Form No.10AB under Section 12A(1)(ac)(iii) of the Income Tax Act, 1961.
The assessee challenged the rejection of its registration application and cancellation of provisional registration on the ground that the Commissioner (Exemption) denied relief solely because information sought during proceedings was not furnished within time, despite the assessee requesting a short adjournment. The assessee contended that considering the genuineness of the trust and its educational activities, one more opportunity should have been granted for furnishing the required details.
The facts showed that the assessee had earlier been granted provisional registration under Section 12AB read with Section 12A(1)(ac)(vi) on 07.04.2023 for Assessment Years 2023-24 to 2025-26. The assessee had also filed returns of income for Assessment Years 2022-23 and 2023-24 claiming exemption under Section 11. Subsequently, after the assessee filed Form No.10AB seeking regular registration under Section 12A(1)(ac)(iii), the Commissioner (Exemption) issued a notice dated 30.11.2023 through the ITBA portal seeking information and details to verify the genuineness of the activities of the trust. Compliance was required by 15.12.2023.
Since no compliance was furnished, the Commissioner (Exemption) issued another show cause notice dated 09.01.2024 asking the assessee to explain why its application for registration should not be rejected and why provisional registration should not be cancelled for failure to furnish the required documents. Compliance was required by 18.01.2024. The assessee again failed to furnish the details sought. Consequently, the Commissioner (Exemption) passed the impugned order rejecting the application for registration and cancelling the provisional registration granted earlier.
Before the Tribunal, the authorised representative submitted that the assessee could not comply with the first notice because the in-house accountant was unaware of the applicable timelines. With regard to the second notice, it was submitted that once the trustees became aware of the proceedings, the assessee started consolidating the required documents. However, since the data was voluminous, additional time was required. Accordingly, the assessee filed an adjournment request dated 29.01.2024 seeking extension of time till 13.02.2024. The authorised representative argued that despite the adjournment request being available on the IT portal, the Commissioner (Exemption) proceeded to pass the impugned order without considering the request. It was therefore urged that another opportunity be granted to furnish the required information and documents.
The Departmental Representative opposed the submissions and argued that adequate opportunities had already been granted to the assessee. According to the Revenue, the assessee repeatedly failed to comply with notices and did not furnish the documents and evidence called for by the Commissioner (Exemption). Therefore, the rejection of the application for non-compliance was justified.
After considering the rival submissions and examining the record, the Tribunal held that, in the facts and circumstances of the case, it would be appropriate and in the interest of justice and fair play to restore the matter to the file of the Commissioner (Exemption) for fresh consideration. The Tribunal directed the Commissioner (Exemption) to reconsider the application for registration under Section 12A(1)(ac)(iii) afresh and decide the matter on merits in accordance with law after providing adequate opportunity of hearing to the assessee.
Accordingly, the appeal of the assessee was treated as allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT PUNE
The appeal filed by the assessee is directed against the order dated 29.01.2024 of the Ld. Commissioner of Income Tax (Exemption), Pune [“CIT(E)”] whereby he rejected the application of the assessee filed before him in Form No. 10AB on 30.09.2023 u/s 12A(1)(ac)(iii) of the Income Tax Act, 1961 (the “Act”).
2. The assessee has raised the following grounds of appeal :-
“1. The Ld CIT( Exemption) erred in law and on facts by rejecting application filed in Form 10AB under clause (iii) of Sec 12A(1) (ac) of Income Tax Act, 1961 with Sole ground that information called u/s 12AB (1)(b)(i) of Income Tax Act, 1961 were not furnished in time even though assessee Trust requested for short adjournment dt 29/01/2024. It is urged that, considering the genuineness of the Trust, Assessee be given one more opportunity to furnish details instead of rejecting our application by Ld CIT( Exemption) Pune.
2. CIT( Exemption) erred in law and on facts by cancelling provisional registration granted earlier on 7/4/2023 u/s 12AB r.w.s 12A(1)(ac) (vi) of Income Tax Act, 1961, which is too harsh as the Trust is an Educational Trust and it is urged that assessee Trust be given one more opportunity to comply the details instead of cancelling the provisional registration as granted earlier dt 7/4/2023.
3. The appellant craves leave to add, alter, modify or substitute any ground of appeal at the time of hearing.”
3. Briefly stated, the facts of the case are that the assessee was granted provisional registration u/s 12AB r.w.s. 12A(1)(ac)(vi) of the Act dated 07.04.2023 from AYs 2023-24 to 2025-26. Since then, the assessee has filed its return of income for the AYs 2022-23 & 2023-24 claiming exemption u/s 11 of the Act. Subsequently, on receipt of the assessee’s application filed in Form No. 10AB u/s 12A(1)(ac)(iii) of the Act along with annexures thereto, with a view to verify the genuineness of the activities of the assessee etc., the Ld. CIT(E) issued notice on 30.11.2023 through ITBA portal requiring the assessee to upload certain information/details under the provisions of section 12AB of the Act. The compliance was sought by 15.12.2023. The notice was duly served on the assessee through e-portal and e-mail. Since, the assessee did not furnish compliance to the said notice dated 30.11.2023, a show cause notice dated 09.01.2024 was issued requesting the assessee to show cause as to why its application for registration u/s 12A(1)(ac)(iii) of the Act should not be rejected and the provisional registration/approval shall not be cancelled in the event of non-furnishing of documents/details so sought. The assessee was required to submit compliance by 18.01.2024. However, it failed to furnish compliance of the said notice(s) and did not furnish the information/details called for. The Ld. CIT(E), therefore, proceeded to pass impugned order on 29.01.2024 rejecting the application of the assessee and also cancelling the provisional registration granted on 07.04.2023 u/s 12AB r.w.s. 12A(i)(ac)(vi) of the Act.
4. Dissatisfied, the assessee is in appeal before the Tribunal.
5. The Ld. AR submitted that the assessee was not able to comply with the first notice issued on 30.11.2023 to which the compliance was to be made by 09.01.2024 as the in-house Accountant was not aware of the times lines involved. As regards, the second notice dated 09.01.2024 for which the compliance was to be made by 18.01.2024, the Ld. AR submitted that as soon as the said notice was brought to the notice of the trustee the assessee tried to consolidate the documents. However, the data being voluminous it required additional time and therefore the assessee requested for adjournment vide letter dated 29.01.2024 seeking additional time for making submissions till 13.02.2024. A copy of adjournment letter was produced and is also available on the IT portal. However, the Ld. CIT(A) proceeded to pass the impugned order without considering the request of the assessee. The Ld. AR therefore, urged that considering the genuineness of the activities of the assessee trust, the assessee be given one more opportunity to furnish the details/information sought by the Ld. CIT(E).
6. The Ld. DR, on the other hand, opposed the above contention of the Ld. AR and submitted that the assessee was given adequate opportunity to present its case before the Ld. CIT(E). However, the assessee failed to make the requisite compliance and did not submit the required documents/evidence called for. The Ld. CIT(E) was therefore fully justified in rejecting the assessee’s application for non-compliance of notice(s) of hearing.
7. We have considered the rival submissions and perused the records. On the facts and in the circumstances of the assessee’s case, we are of the view that it would be judicially expedient and in the interest of justice and fair play if the matter is restored back to the file of Ld. CIT(E) to consider afresh the assessee’s application for registration u/s 12A(1)(ac)(iii) of the Act and decide the matter on merits, in accordance with facts and law after allowing adequate opportunity of being heard to the assessee and present its case. We order accordingly.
8. In the result, the appeal of assessee is treated as allowed for statistical purpose.
Order pronounced in the open court on 18th September, 2024.
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