Case Law Details
Shri Maheshwari Mahila Mandal Vs CIT (Exemption) (ITAT Pune)
The Pune Bench of the Income Tax Appellate Tribunal heard two appeals filed by the assessee against separate orders dated 09.10.2023 passed by the Commissioner of Income Tax (Exemption), Pune denying registration under Section 12AB(1)(ac)(vi) and approval under Section 80G(5)(iv) of the Income Tax Act, 1961.
The assessee was a trust formed with the objective of spreading and promoting educational facilities among native, tribal, backward class and minority communities in rural and urban areas for both girls and boys. The trust had filed an application in Form No.10AB on 15.05.2023 seeking registration under Section 12AB of the Act.
During the processing of the application, the Commissioner of Income Tax (Exemption) issued a notice dated 05.08.2023 through the ITBA portal calling upon the assessee to furnish certain information and clarifications. However, the assessee did not comply with the notice. In the absence of any response or compliance from the trust, the Commissioner (Exemption) denied registration under Section 12AB and also cancelled the provisional registration earlier granted to the assessee.
Aggrieved by the denial of registration, the assessee filed appeals before the Tribunal.
Before the Tribunal, the authorised representative submitted that there had been changes in the Board of Directors and that the accountant who was handling the pending proceedings and compliances had resigned. As a result, the trustees were unaware of the pending proceedings and the notices issued by the Commissioner (Exemption). Because of this lack of knowledge, the assessee could not submit the relevant documentary evidence or comply with the notices issued through the portal.
The authorised representative therefore requested that another opportunity be granted to the assessee to present its case before the lower authorities.
The Tribunal considered the rival submissions and examined the record. It observed that the notice dated 05.08.2023 had indeed been issued asking the assessee to furnish details, but the assessee failed to respond. The Tribunal further noted the explanation offered by the assessee that the Board of Directors had changed and the accountant had resigned, resulting in the trustees remaining unaware of the notices and compliances required.
The Tribunal also took note of the affidavit filed by the assessee explaining the circumstances under which compliance could not be made. The Tribunal was satisfied that there existed sufficient and reasonable cause for the non-compliance with the notices issued by the Commissioner (Exemption).
Considering the factual circumstances and in the interest of justice, the Tribunal held that the assessee deserved one more opportunity to properly represent its case before the Commissioner (Exemption). Without expressing any opinion on the merits of the registration claim, the Tribunal set aside the impugned order and remanded the matter back to the file of the Commissioner (Exemption) for fresh adjudication.
The Tribunal also recorded the undertaking given by the authorised representative that the assessee would fully cooperate and render assistance during the fresh proceedings before the Commissioner (Exemption).
Since the order denying registration under Section 12AB and cancelling provisional registration was restored for fresh adjudication, the connected appeal concerning denial of approval under Section 80G was also remanded back for reconsideration.
Accordingly, both appeals filed by the assessee were partly allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT PUNE
These two appeals filed by the assessee are directed against the orders of ld. Commissioner of Income Tax, Exemption, Pune [the CIT, Exemption] both dated 09.10.2023 denying registration u/s. 12AB(1)(ac)(vi) and approval u/s.80G(5)(iv) of the Income Tax Act, 1961 (‘the Act’).
2. Briefly, the facts of the case are that the appellant is a trust whose core objectives are to spread and publish educational facility in respective of Native, Tribunal, Backward class, Minority in the area of Rural & Urban countries for Girls and Boys. The appellant made an application on 15.05.2023 in Form No.10AB for grant of registration u/s 12AB of the Act. In the extant appeal under consideration in ITA No.1336/PUN/2023, the ld. CIT, Exemption issued a notice dt. 05.08.2023 through ITBA portal calling upon the appellant to file certain information/clarification. The appellant society did not comply with the said notice. In the absence of any compliance from the side of the appellant trust, the ld. CIT, Exemption denied the grant of registration u/s.12AB of the Act and accordingly cancelled the provisional registration granted to the appellant trust.
3. Being aggrieved, the assessee is in appeal before us in the present appeal assailing the impugned order denying the grant of registration u/s.12AB.
4. Before us, the ld. AR submitted that the Board of Directors had changed and the Accountant who was pursuing the pending proceedings and required compliances etc., had resigned. The trustees were not enlightened with the pending proceedings and are ignorant of the same. In that circumstances, the appellant trust had not complied with the notices and thus could not submit relevant documentary evidences. It is, therefore, urged before the Tribunal to grant one more opportunity may be granted to represent its case before the lower authorities.
5. We heard the rival submissions and perused the material on record. On perusal of the impugned order, it is clear that the appellant was asked to furnish certain information vide notice dated 05.08.2023 requesting the appellant society to file the details. The appellant trust could not comply with the notices. The reason for non-compliance of notices as stated by the appellant trust was that the Board of Directors had changed and the Accountant had also resigned. Therefore, the trustees were unaware about the notices and submission of relevant documents. The appellant trust had submitted an affidavit to this effect to demonstrate as to under what circumstances it could not comply with the notices. We are satisfied that the appellant trust could not comply with the notices for sufficient and reasonable cause. Considering the aforementioned factual scenario in the present case, in the interest of justice, we are of the considered opinion that the appellant deserves one more opportunity to properly represent its case before CIT (Exemption). In view thereof, without touching upon the merits of the case, we set-aside the impugned order and remit the matter back to the file of ld. CIT, Exemption for fresh adjudication. The ld. AR has undertaken that the assessee will render full assistance to the ld. CIT(E) in such fresh proceedings. Since the impugned order cancelling the registration granted u/s.12AB of the Act has restored back in the circumstances mentioned therein, the appeal in ITA No.1348/PUN/2023 filed against the denial of approval u/s.80G is also remitted back. We order accordingly.
6. In the result, both the appeals of the assessee stands partly allowed for statistical purposes.
Order pronounced on this 02nd day of February, 2024.
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