International Society for Life Sciences Vs CIT (Exemption) (ITAT Jaipur)
Summary: The Income Tax Appellate Tribunal (ITAT), Jaipur Bench, considered two appeals filed by International Society for Life Sciences against separate orders dated 30 December 2024 passed by the Commissioner of Income Tax (Exemption), Jaipur. The appeals concerned rejection of permanent registration under Section 12AB of the Income Tax Act, 1961 and approval under Section 80G, along with cancellation of the provisional registration and approval previously granted to the assessee. The Tribunal examined both matters together since the Section 80G issue was dependent upon the determination of the assessee’s eligibility for registration under Section 12AB.
In ITA No. 277/JP/2025, the CIT(E) had rejected the application for permanent registration under Section 12A(1)(ac)(iii) on three grounds: non-registration under the Rajasthan Public Trust Act, 1959; discrepancy in the dissolution clause; and concerns regarding the genuineness of the assessee’s activities. The CIT(E) also cancelled the provisional registration granted on 4 April 2022 under Section 12A(1)(ac)(vi), observing that the assessee had failed to provide adequate justification for converting its provisional registration into regular registration.
In the connected appeal, ITA No. 282/JP/2025, the CIT(E) rejected the assessee’s application for permanent approval under Section 80G. The Commissioner reasoned that approval under Section 80G could not be granted without registration under Section 12AB or satisfaction of the relevant statutory conditions. The order also referred to the applicable Income Tax Rules and rejected the application in Form No. 10AB. Consequently, the provisional Section 80G approval dated 28 June 2022 was also cancelled.
Before the Tribunal, the assessee submitted that it had not received an adequate opportunity of being heard during the proceedings before the CIT(E). The authorised representative requested an additional opportunity to submit the required documents and explain the outstanding issues. It was specifically pointed out that the assessee had applied for registration under the Rajasthan Public Trust Act, 1959 on 26 July 2024 and that the application was at the final stage of consideration before the Assistant Commissioner-1, Devsthan Vibhag, Jaipur. The assessee also expressed willingness to furnish documents addressing the dissolution clause and the genuineness of its activities. The Departmental Representative relied upon the orders passed by the CIT(E).
After considering the rival submissions and examining the record, the ITAT observed that the assessee should be provided another opportunity to produce documentary evidence before the CIT(E). It accordingly restored the Section 12AB registration matter to the file of the CIT(E), directing that the application be examined afresh in accordance with law upon production of the registration certificate under the Rajasthan Public Trust Act, 1959 and other required documents. The assessee was also directed to furnish material concerning the dissolution clause and genuineness of its activities. Since the Section 12AB registration issue had been restored for fresh adjudication, the Tribunal held that the outcome of the connected Section 80G appeal was consequential in nature.
The Tribunal expressly clarified that remanding the matter should not be construed as an expression of opinion on the merits of the dispute. The CIT(E) was required to independently decide the issues in accordance with law. Both appeals were allowed for statistical purposes. The decision therefore provided the assessee with an opportunity for fresh consideration but did not itself grant permanent registration under Section 12AB or approval under Section 80G.
FULL TEXT OF THE ORIGINAL JUDGMENT/ORDER
Both these appeals have been filed by the assessee against two different orders of the Ld.CIT (Exemption), Jaipur dated 30-12-2024 passed under section 12AB and 80G of the Income Tax Act, 1961 respectively. The grounds of appeal raised by the assessee in the above mentioned appeals are as under:-
ITA NO. 277/JP/2025
INTERNATIONAL SOCIETY FOR LIFE SCIENCES VS CIT (EXEMPTION), JAIPUR
ITA NO. 277/JP/2024 U/S 12AB of I.T. Act, 1961
1. The ld. CIT(E) erred in law and on facts in rejecting the application for permanent registration u/s 12A(1)(ac)(iii) of the Income Tax Act, 1961.
2. The ld. CIT(E) erred in law and on facts in cancelling the provisional registration granted u/s 12A(1)(ac)(vi) of the Income Tax Act, 1961.
ITA NO. 282/JP/2025 U/S 80G of I.T. Act, 1961
1. The ld. CIT(E) erred in law and on facts in rejecting the application for permanent registration u/s 80G of the Income Tax Act, 1961.
2. The ld. CIT(E) erred in law and on facts in cancelling the provisional approval granted u/s 80G of the Income Tax Act, 1961.
2.1 Apropos to the ground so raised by the assessee in ITA No. 277/JP/2025, the ld. CIT(E) rejected the assessee’s claim of registration u/s 12AB of the Act by observing as under:-
‘’05. In view of above discussion assessee’s claim of registration section 12AB is liable to be rejected and thus being rejected on following grounds:-
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- Non registration under Rajasthan Public Trust Act, 1959.
- Discrepancy in dissolution clause.
- Genuineness of activities
06. Further 12AB (1)(b)(ii) (B) of the Income Tax Act, 1961 also state that if CIT is not satisfied has to pass order rejecting such application and also cancelling its earlier registration. Thus, it is clarified that applicant’s provisional registration under clause (vi) of clause (ac) of sub-section (1) of section 12A of the Income Tax Act, 1961 dated 04.04.2022 is also being cancelled. Further assessee has failed to give proper justification for regularization of provisional registration, thus with this order provisional registration is also cancelled.’’
2.2 Apropos to the ground so raised by the assessee in ITA No. 282/JP/2025, the ld. CIT(E) rejected the assessee’s claim of exemption u/s 80G of the Act by observing as under:-
02. Approval u/s 80G cannot be granted without registration u/s 12AB.
2.1 As per rule 11A of the Income Tax Rule, 1962, the registration u/s 12A/12AB or notification u/s 10(23C) is a precondition for granting approval u/s 80G of the I.T. Act, 1961. Vide this office order No ITBA//EXM/F/EXM45/2024-25/1071662356(1) dated 30-12-2024.
In view of above discussion, the application in Form No.10AB seeking exemption u/s 80G is liable to be rejected
03. Further 2nd proviso to 80G(5) also state that if CIT is not satisfied has to pass order rejecting such application and also cancelling its earlier approval. Thus, it is clarified that applicant provisional approval under clause (iv) of first proviso to sub-section (5) of section 80G of the Income Tax Act, 1961 dated 28.06.2022 is also being cancelled. Further assessee has failed to give proper justification for regularization of provisional approval, thus with this order provisional approval is also lapsed and cancelled.’’
2.3 During the course of hearing, the ld. AR of the assessee in the above appeals mainly submitted that the assessee was not provided adequate opportunity of being heard by the ld. CIT(E). The ld.AR of the assessee submitted that the appeals may be set aside to the file of the ld. CIT(A) to pass order after providing sufficient opportunity of being heard and to accept and consider the certificate under RPT Act, 1959. Conclusively, the ld AR of the assessee prayed that the assessee trust may be provided one more opportunity to the contest the case before the ld CIT(E) and restore the appeals to the file of ld CIT(E) for afresh adjudication as the assessee was ex-parte before the ld. CIT(E).
2.4. Per contra, the ld. DR relied on the orders of the ld. CIT(E).
2.5 After hearing both parties and perusing the materials available on record, we noticed that the ld. CIT(E) has rejected the assessee’s claim of registration u/s 12AB of the Act. It is also noticed that the ld.CIT(E) has cancelled the provisional registration of the assessee for the reason that the assessee trust had failed to give proper justification for regularization of provisional registration. The prayer of the ld.AR of the assessee was that the assessee may be provided one more chance to adduce the documents before the ld. CIT(E) to resolve the issue in question and the assessee trust has applied for Registration under Rajasthan Public Trust, 1959 on 26-07-2024 and the same is under final stage of disposal by the Assistant Commissioner-1 Devsthan Vibhag, Jaipur. As regards the other queries like discrepancies of dissolution issue and genuineness of activities, the assessee trust is directed to submit all the desired documents before the ld. CIT(A) with a view to resolving the issue. Therefore, in these circumstances, we restore the matter back to the file of the ld. CIT(E) with the direction that as and when the assessee trust produces the copy of the Registration under RPT Act, 1959 and other documents required by him then the application of the assessee trust for registration u/s 12AB of the Act be decided afresh in accordance with law. The assessee trust is also directed to produce the documents relating to discrepancy of dissolution clause and the genuineness of the activities etc. before the ld CIT(E)
2.6 Since we have restored the appeal of the assessee with regard to the registration u/s 12AB of the Act to the file of the ld. CIT(E) for afresh adjudication, therefore, the outcome of appeal of the assessee u/s 80G of the Act is consequential in nature.
2.7 Before parting, we may make it clear that our decision to restore the matter back (supra) to the file of the ld. CIT(E) shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by the ld. CIT(E) independently in accordance with law.
3.0 In the result, the appeals of the assessee are allowed for statistical purposes.
Order pronounced in the open court on 04/06/2025.
