Case Law Details
Seva Samarpan Charitable Trust Vs CIT (Exemption) (ITAT Ahmedabad)
The Income Tax Appellate Tribunal (ITAT) Ahmedabad addressed an appeal filed by Seva Samarpan Charitable Trust, challenging the Commissioner of Income Tax (Exemptions)’s (CIT(E)) rejection of their application for registration under Section 12A of the Income Tax Act. The CIT(E) had rejected the trust’s application due to the trust’s failure to provide requested details and information, after issuing two notices. The CIT(E) noted that the trust did not file any submissions or request an adjournment. The CIT(E) also cancelled the trust’s previously granted provisional registration. The CIT(E)’s rejection was based on the trust’s inability to demonstrate the genuineness of its activities, their alignment with the trust’s objectives, and compliance with relevant laws.
The trust argued before the ITAT that it was not given a reasonable opportunity to present its case, as the two notices were issued within a short timeframe. The trust claimed it had difficulty accessing the e-portal during that period and was unaware of the notices. The trust’s counsel highlighted that substantial details, including the registration certificate, trust deed, and audit reports, were submitted in Form 10AB, and that the trust had been operational since December 2020. The trust requested the ITAT to restore the case to the CIT(E) for a fresh review, providing the trust with a proper opportunity to present its case. The Revenue did not object to this request. The ITAT, considering the facts and in the interest of justice, decided to restore the case to the CIT(E) for a de-novo consideration. The ITAT directed the CIT(E) to provide the trust with a reasonable opportunity to be heard. The trust’s appeal was allowed for statistical purposes, and the case was remanded for a fresh review.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Exemptions), (in short “Ld. CIT(E)”), Ahmedabad vide order dated 02.09.2024.
2. The Assessee has taken the following grounds of appeal:-
“1. On the facts and in circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Exemption) has erred in rejecting application for registration u/s 12A of the Act.
2. On the facts and in circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Exemption) has not provided reasonable opportunity of being heard as provided under Section 12AB(1)(b)(ii)(B) of the Act.
3. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal.”
3. The brief facts of the case are that the assessee / applicant trust filed application for grant of registration under Section 12A of the Act in Form 10AB. CIT(E) issued notices to the assessee dated 04.07.2024 and 07.08.2024 asking for certain details / information. The CIT(E) noted that the applicant trust has neither filed any submission nor sought any adjournment in this case. Accordingly, the Ld. CIT(E) rejected the application for grant of registration under Section 12A of the Act and also directed cancellation of provisional registration earlier granted to the applicant trust. While passing the order, Ld. CIT(E) made the following observations:
“7. As discussed above, the applicant/assessee has failed to file documentary evidences to enable me to satisfy about:
i. Genuineness of the activities of the trust or institution.
ii. That the activities of trust or institution are in consonance withthe objects of the trust or institution.
iii. That other laws material for the purpose of achieving objects are complied with.
8. IN view of the above, the present application filed in Form 10AB sub-clause (iii) of clause (ac) of sub- action (1) of section 12A of the Income Tax Act, 1961 is rejected and also your provisional registration stands cancelled.
9. Further, the applicant should compute its tax liability under section 115TD of Income Tax Act, 1961 read with Rule 17CB of IT Rules and report the same in return of Income. It should also pay the tax so computed within timeline provided under section 115TD(5)of Income Tax Act,1961. In case applicant is filing appeal against this order u/s. 253 of IT Act 1961, proof of filing of appeal should be provided to AO to get benefit of extended time limit provided u/s. 115TD(5) of IT Act 1961.””
4. The assessee / applicant is in appeal before us against the aforesaid order passed by Ld. CIT(E).Before us, the Counsel for the assessee submitted that there was lack of opportunity granted to the assessee / applicant trust since only two notices of hearing were issued on very short intervals. The assessee for that period could not access the e-portal and accordingly, the assessee / applicant trust was not aware about the issuance of notices by Ld. CIT(E). However, the Counsel for the assessee submitted that the applicant trust has been operating since December, 2020 and in the Form 10AB filed by the assessee, substantial details were furnished like Registration Certificate, Trust Deed, Audit Report for the last three Accordingly, it was submitted that on the basis of these details, Ld. CIT(E) could have verified the genuineness of the activities of the trust, but Ld. CIT(E) chose completely to ignore the above details / information . Accordingly, the Counsel for the assessee submitted that the matter may be restored to the file of Ld. CIT(E) to decide the case of the assessee on merits, after giving due opportunity of hearing to the assessee.
5. In response, the R. also did not object to the matter being restored to the file of Ld. CIT(E) for de-novo consideration.
6. We have heard the rival contentions and perused the material on record .
7. Accordingly, looking into the above facts placed on record, in the interest of justice, the matter is restored to the file of Ld. CIT(E) for de- novo consideration, after giving due opportunity of hearing to the assessee.
8. In the result, the appeal of the assessee is allowed for statistical purposes.
This Order pronounced in Open Court on 24/01/2025
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