Shree Maheshwari Mandal Vs CIT (ITAT Pune)
The Pune Bench of the Income Tax Appellate Tribunal heard two appeals filed by the assessee against a common order dated 09.10.2023 passed by the Commissioner of Income Tax (Exemption), Pune rejecting the applications seeking registration under Sections 12AA and 80G of the Income Tax Act. Since both appeals involved identical facts and issues, the Tribunal heard them together and passed a consolidated order.
In ITA No.1334/PUN/2023, the primary issue before the Tribunal was whether the Commissioner of Income Tax (Exemption) was justified in rejecting the application filed in Form 10AB for registration under Section 12AA while allegedly violating the principles of natural justice.
The assessee had filed Form 10AB on 11.05.2023 seeking registration under Section 12AA. During the verification process, the Commissioner (Exemption) issued a notice dated 09.08.2023 through the ITBA portal calling upon the assessee to furnish certain information and clarifications by 23.08.2023. According to the impugned order, there was no compliance from the assessee. Subsequently, another show cause notice dated 12.09.2023 was issued asking why the application should not be rejected and why the provisional registration granted earlier should not be cancelled. The Commissioner (Exemption) recorded that there was again no compliance from the assessee.
The Commissioner (Exemption) observed that the information sought was basic and necessary to ascertain the genuineness and overall activities of the assessee for deciding the registration application. Due to the continued non-compliance, the Commissioner (Exemption) cancelled the provisional registration granted on 21.10.2022 under Section 12AB and rejected the application filed in Form 10AB seeking regular registration under Section 12AA.
Before the Tribunal, the authorised representative for the assessee submitted that the notices issued by the Commissioner (Exemption) were not brought to the knowledge of the Board of Trustees because the accountant had been changed. It was argued that the assessee had no knowledge of the proceedings initiated by the Commissioner (Exemption). The authorised representative requested that one more opportunity be granted and sought remand of the matter for fresh adjudication. A notarized affidavit dated 01.02.2024 was also filed in support of these submissions.
The Tribunal examined the affidavit and found that the averments contained therein corroborated the submissions made on behalf of the assessee. The Tribunal observed that the assessee did not effectively get an opportunity to furnish the required details due to lack of knowledge regarding the proceedings. At the same time, the Tribunal agreed with the Commissioner (Exemption) that the details sought were necessary for proper adjudication of the application seeking registration under Section 12AA.
The Tribunal further noted the undertaking given by the authorised representative that the assessee was willing to prosecute its case by furnishing all the necessary details before the Commissioner (Exemption). The Departmental Representative also reported no objection to the request for remand.
Considering these facts, the Tribunal deemed it appropriate to remand the matter back to the file of the Commissioner (Exemption) for fresh adjudication. The assessee was granted liberty to file evidence and relevant material in support of its claim for registration. Accordingly, the grounds raised in the appeal were allowed for statistical purposes.
In ITA No.1335/PUN/2023, the facts were found to be identical except that the assessee had sought approval under Section 80G of the Income Tax Act. The Tribunal held that the findings recorded in the appeal concerning Section 12AA registration would apply equally to the appeal concerning Section 80G approval. Consequently, this appeal was also allowed for statistical purposes.
As a result, both appeals filed by the assessee were allowed for statistical purposes.
Assessee Represented by : Shri Sachin P. Kumar
FULL TEXT OF THE ORDER OF ITAT PUNE
