Case Law Details
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.
FULL TEXT OF THE ORDER OF ITAT PUNE
These two appeals by the assessee against the common order dated 09-10-2023 passed by the Commissioner of Income Tax (Exemption), Pune in rejecting the application seeking registration u/s. 12AA and 80G of the Act.
2. Since, the issues raised in both the appeals are similar basing on the same identical facts. Therefore, with the consent of both the parties, we proceed to hear both the appeals together and to pass a consolidated order for the sake of convenience.
3. First, we shall take up appeal of assessee in ITA No. 1334/PUN/2023.
4. The assessee raised four grounds of appeal amongst which the only issue emanates for our consideration is as to whether the CIT(Exemption) justified in rejecting the application in Form 10AB violating the principles of natural justice.
5. We note that the assessee filed application in Form 10AB seeking registration u/s. 12AA of the Act on 11-05-2023. In order to verify the genuineness of the activities, a notice dated 09-08-2023 issued through ITBA portal requesting the assessee to upload certain information / clarification by 23-08-2023 the details of which are reflected in pages 3 to 9 of the impugned order. There was no compliance by the assessee on 2308-2023. Again, a show cause notice dated 12-09-2023 issued stating why the application should not be rejected and provisional registration granted should not be cancelled. According to the CIT(Exemption), there was no compliance by the assessee which is evident from para 4 of the impugned order. According to the CIT(Exemption), the requisite details as sought by him are basic details requires to ascertain the overall activities of the assessee and are directly relevant to the present proceedings. Having no compliance by the assessee in this regard, the CIT(Exemption) having reasons recorded in that regard cancelled the provisional registration granted on 21-10-2022 u/s. 12AB of the Act and consequently, rejected the application in Form 10AB seeking registration.
6. The ld. AR, Shri Sachin P. Kumar submits that no notice was received by the assessee as the accountant has been changed and no information about the issuance of notice by the CIT(Exemption) with the Board of Trustees. The assessee has no knowledge about the notices issued by the CIT(Exemption) and prayed for another opportunity in remanding the matter to the file of CIT(Exemption). The ld. AR filed notarized affidavit dated 01-02-2024 supporting his arguments. On perusal of the same, we find the averments made by the deponent are corroborating with the submissions of the ld. AR. Admittedly, there was opportunity for the assessee to submit the requisite details as sought by the CIT(Exemption) as there was no knowledge of proceedings with the Board of Trustees. As rightly held by the CIT(Exemption) the said requisite details as sought by him are necessary for fair adjudication for granting of registration u/s. 12AA of the Act. Further, the ld. AR undertaken the assessee is ready to prosecute its case by filing all requisite details before the CIT(Exemption). The ld. DR reported no objection. Thus, in view of the same, we deem it proper to remand the matter to the file of CIT(Exemption) for its fresh adjudication. The assessee is liberty to file evidences, if any, in support of its claim. Thus, the grounds raised by the assessee are allowed for statistical purpose.
7. In the result, the appeal of assessee is allowed for statistical purpose.
ITA No. 1335/PUN/2023.
8. We find that the facts in ITA No.1335/PUN/2023 are identical to ITA No. 1334/PUN/2023 except the assessee seeking registration u/s. 80G of the Act. Since, the facts in ITA No. 1335/PUN/2023 are similar to ITA No. 1334/PUN/2023, the findings given by us while deciding the appeal of assessee in ITA No. 1334/PUN/2023 would mutatis mutandis apply to ITA No. 1335/PUN/2023, as well. Accordingly, the appeal of assessee is allowed for statistical purpose.
9. In the result, both the appeals of assessee are allowed for statistical purpose.
Order pronounced in the open court on 12th February, 2024.
Author Bio
