Simple Vedas Foundation Vs CIT (Exemptions) (ITAT Mumbai)
Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has issued orders allowing two appeals filed by Simple Vedas Foundation against the Commissioner of Income-tax (Exemptions) [CIT(E)], Mumbai. The appeals challenged two separate orders, both dated July 1, 2024, and July 26, 2024, passed by the CIT(E) that denied the foundation’s application for registration under Section 12AB of the Income-tax Act, 1961, and the approval for exemption under Section 80G of the Act.
ITA No. 4913/Mum/2024 pertained to the rejection of the foundation’s application for 80G exemption. The CIT(E) had raised concerns about the trust’s funds potentially being applied outside India, as indicated in a letter issued during the proceedings under Section 80G(5)(iii). The CIT(E) had requested the foundation to provide documentary evidence of its activities, expenses, and donation details for the financial years 2022-23 and 2023-24 by July 24, 2024, failing which the application for 80G exemption would be rejected.
According to the order, the required details were not submitted within the stipulated timeframe. Consequently, the CIT(E) passed an order rejecting the 80G application. The CIT(E) noted that Section 80G(5)(i) requires an institution or fund to be eligible under Sections 11, 12, 10(23AA), or 10(23C) of the Act. Since the foundation’s application for registration under Section 12AB had also been rejected (in a separate order dated July 26, 2024), it did not meet the criteria for 80G approval, rendering its application untenable.
During the appeal proceedings before the ITAT, the counsel for Simple Vedas Foundation argued that the time provided to submit the necessary details to the CIT(E) was insufficient. The counsel further submitted that all the required information would be furnished if another opportunity were granted by the CIT(E). The Departmental Representative (DR) did not oppose this submission.
Considering the arguments from both sides, the ITAT decided to provide the foundation with another chance to present all the required details to the CIT(E). The ITAT directed the CIT(E) to consider all the submitted information and pass a fresh order on the 80G exemption application. Consequently, ITA No. 4913/Mum/2024 was allowed for statistical purposes, meaning the matter was sent back to the CIT(E) for reconsideration.
ITA No. 4914/Mum/2024 dealt with the rejection of the foundation’s application for registration under Section 12AB of the Act. The CIT(E)’s order revealed that notices were issued to the trust requesting details and explanations, along with supporting documents, regarding the application of funds outside India as mentioned in the trust deed’s object clause. The foundation was also asked to provide evidence of its activities and donation details for the financial years 2022-23 and 2023-24 within a week from the notice dated July 20, 2024.
In response, the foundation could not submit the required information within the given week and requested an adjournment until August 10, 2024. However, the CIT(E) rejected this request, citing the statutory limitation of July 31, 2024, to decide on the application. The CIT(E) stated that the requested details were crucial to determine the genuineness of the trust and whether its objects were being complied with according to the law. Due to the lack of compliance within the stipulated time, the CIT(E) concluded that the genuineness of the trust could not be established, leading to the rejection of the Section 12AB registration application.
Aggrieved by this order, the foundation appealed to the ITAT. Before the Tribunal, the counsel for the appellant reiterated that the time given to submit the required details was too short and asserted that the trust was genuine and entitled to registration under Sections 12AB and 80G. The counsel requested that an opportunity be granted to file all the necessary information before the CIT(E). After reviewing the submissions and the CIT(E)’s order, the ITAT concluded that the foundation was not provided with a sufficient and reasonable opportunity to submit all the required details. Therefore, the ITAT directed the CIT(E) to consider all the details submitted by the foundation and pass a fresh order on the Section 12AB registration. Accordingly, ITA No. 4914/Mum/2024 was also allowed for statistical purposes, remanding the issue back to the CIT(E).
In summary, the ITAT Mumbai allowed both appeals by Simple Vedas Foundation for statistical purposes, setting aside the CIT(E)’s orders rejecting the applications for Section 12AB registration and Section 80G exemption. The cases have been remanded back to the CIT(E) with directions to provide the foundation with an adequate opportunity to submit all the required details and to pass fresh orders thereafter, based on the information provided. The orders were pronounced in open court on December 30, 2024.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
