Ahmednagar Cancer Society Vs CIT (Exemption) (ITAT Pune)
Summary: The Income Tax Appellate Tribunal, Pune Bench “A”, comprising Shri R.S. Syal, Vice President, and Shri Partha Sarathi Chaudhury, Judicial Member, considered an appeal filed by Ahmednagar Cancer Society against the order dated 27 September 2023 passed by the Commissioner of Income Tax (Exemption), Pune, rejecting its application for registration under Section 12AB of the Income-tax Act, 1961. The solitary grievance concerned the refusal to grant registration because the assessee-trust had not furnished the supporting evidence and explanations sought by the Department. The CIT(E) had required information to verify the genuineness of the trust’s objects, its charitable activities and compliance with applicable legal requirements. Although opportunities were provided, the assessee failed to submit the necessary clarification or justification in response to the show-cause notice dated 4 September 2023. The CIT(E), therefore, concluded that satisfaction regarding the genuineness of the activities and statutory compliance could not be reached and rejected the application. At the Tribunal hearing, nobody appeared for the assessee, but the Bench proceeded to consider the Departmental Representative’s submissions and the available material on merits.
The Tribunal observed that the provisions governing registration of charitable trusts under Section 12AB and approval under Section 80G derive their underlying purpose from the Directive Principles of State Policy contained in the Constitution of India. These provisions promote public welfare by facilitating charitable institutions whose activities benefit society. Emphasising the welfare-oriented nature of these provisions, the Tribunal considered that rejection of the application merely because necessary supporting evidence had not been furnished should not prevent a final opportunity to establish the trust’s case. In the interest of justice, it set aside the CIT(E)’s order and restored the matter for fresh consideration, directing the authority to permit the assessee to submit relevant documents and present its case on merits. The CIT(E) was directed to re-adjudicate the application in accordance with law and the principles of natural justice. The appeal was allowed for statistical purposes, without any final finding by the Tribunal that the trust had conclusively established eligibility for registration.
FULL TEXT OF THE ORDER OF ITAT PUNE
This appeal preferred by the assessee emanates from the order of Commissioner of Income Tax (Exemption), Pune (for short, „CIT(E)‟), dated 27.09.2023 as per the grounds of appeal on record.
2. That, on perusal of the grounds of appeal, it is evident that solitary grievance of the assessee is the rejection of registration to the assessee-trust u/sec. 12AB of the Act by the ld. CIT(E).
2.1 At the time of hearing, none appeared on behalf of the assessee. The submissions of the ld. DR and materials/documents available on record were considered and the case was heard on merits.
2.2 That, on perusal of the order of ld. CIT(E), certain details were called for from the assessee to verify the genuineness of the objects of the assessee-trust and to ascertain the genuineness of the charitable activities done by the applicant-trust. There were opportunities given by the Department to the assessee for submission of supporting evidences to demonstrate the charitable activities performed by the trust. However, at para 6, the ld. CIT(E) mentions that assessee had not furnished any clarification/justification on the issues raised vide show-cause notice dated 04/09/2023, hence, presumed that assessee has nothing to say further in the matter. Therefore, at para 7, ld.CIT(E) held that it was not possible to arrive at satisfactory conclusion about the genuineness of the activities and compliance of requirements of any other law for the time being in force by the trust/institution, the application of the assessee was rejected.
3. We are of the considered view that it is a case where the application for registration of a trust was filed by the assessee, and for want of supporting evidences, the matter was rejected by the Department. It has to be appreciated that the purpose of the provisions for registration of trust u/sec. 12AB and granting of exemption u/sec. 80G, all these sections derives their spirit from the Directive Principles of State Policy enshrined in the Constitution of India. Since, the Govt. of India makes endeavor to provide welfare to one and all in the society at large and in view thereof the registration for public charitable trusts are given in order to ensure that through these charitable trusts benefits should flow to the entire society wherefrom various charitable activities, the entire society is benefited and the objectives of the Govt. of India in furtherance to the Directive Principles of State Policy are achieved. These provisions for the trust registration u/sec. 12A and granting of exemption u/sec. 80G enhance the socio economic welfare in the society. Furthermore, the Income Tax laws are welfare legislations and not penal in nature. Therefore, in the interest of justice and considering all the afore-stated observations, we are of the considered view that one final opportunity should be provided to the assessee to file the relevant details before the ld. CIT(E) and present their case on merits. In view thereof, we set aside the order of the ld. CIT(E) and remit the matter back to his file with the aforesaid direction and the ld. CIT(E) shall re-adjudicate as per law complying with the principles of natural justice. Grounds of appeal stands allowed for statistical purpose.
4. In the result, appeal of the assessee is allowed for statistical purpose.
Order pronounced in open Court on 22nd December, 2023.
