CIT(E) Rejects S.12AB Application without Sufficient Opportunity: ITAT Orders Re-adjudication

Institute of Driving and Traffic Research Vs Commissioner of Income Tax (ITAT Raipur)

The Institute of Driving and Traffic Research (IDTR), backed by Maruti Suzuki India Ltd. and the Chhattisgarh Government, appealed against the rejection of its Form 10AB application under Sections 12AB and 80G(5) of the Income Tax Act, 1961. The Commissioner of Income Tax (Exemption), Bhopal, declined the application citing commercial activities beyond charitable purposes.

The ITAT Raipur, in ITA No.199/RPR/2024, scrutinized the rejection grounds. The institute argued inadequate opportunity to respond to queries, despite submitting documents. The CIT(E) rejected the application and canceled provisional registration, highlighting perceived commercial nature due to fees charged and revenue from services.

The ITAT reviewed procedural lapses, including the CIT(E)’s failure to consider an adjournment request and subsequent submissions. It found procedural fairness compromised, noting acknowledgment of the adjournment request by CPC, Bengaluru. Consequently, ITAT Raipur directed CIT(E) to re-adjudicate, emphasizing due process.

FULL TEXT OF THE ORDER OF ITAT RAIPUR

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