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Case Law Details

Case Name : D S Mittle Charities Vs CIT Exemption (ITAT Mumbai)
Appeal Number : ITA Nos. 6037 & 6038/Mum/2024
Date of Judgement/Order : 15/01/2025
Related Assessment Year : 2025-26
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D S Mittle Charities Vs CIT Exemption (ITAT Mumbai)

In the case of D S Mittle Charities vs. CIT (Exemption), the Income Tax Appellate Tribunal (ITAT) Mumbai addressed the rejection of a charitable trust’s applications for registration under Sections 12A and 80G of the Income Tax Act, 1961. The Commissioner of Income Tax (Exemptions) [CIT(E)] denied the registration, citing the trust’s failure to submit the required documents and respond to subsequent show-cause notices. Although the trust had initially complied with the CIT(E)’s first notice, it claimed that unavoidable circumstances prevented it from responding to subsequent queries.

After hearing both parties, the ITAT found that the rejection was solely based on non-compliance with documentation requirements. The tribunal observed that the trust’s counsel assured compliance if given another opportunity. As a result, the ITAT set aside the CIT(E)’s decision and restored the matter for reconsideration. It directed the CIT(E) to re-examine the applications for registration under Sections 12AB and 80G on their merits, ensuring the trust is given a fair chance to address all queries. The appeals were allowed for statistical purposes.

FULL TEXT OF THE ORDER OF ITAT MUMBAI

The captioned appeals have been filed by the assessee, challenging the orders passed by learned Commissioner of Income Tax (Exemptions), Mumbai, (‘ld.CIT(E)’ for short), rejecting applications seeking registration u/s. 12A and section 80G of the Income Tax Act, 1961 (‘the Act’ for short).

2. We have heard Shri Ashok Mehta, learned counsel appearing for the assessee and Smt. Sanyogita Nagpal, learned Departmental Representative (‘ld. DR’ for short).

3. Briefly, the facts are, the assessee is stated to be a Charitable Trust, filed applications before the competent authority seeking registration u/s. 12AB of the Act as well as u/s. 80G of the Act. While verifying assessee’s application for registration u/s. 12AB of the Act, ld. CIT(E) found that in terms with Rule 17A, certain documents were required to be filed along with the application for registration. Finding some deficiencies in complying to the said provision, ld. CIT(E) called upon the assessee to remove the deficiencies. Additionally, he called for further documents/clarifications from the assessee. Alleging that the assessee did not comply with the queries raised in the subsequent show cause notices, ld. CIT(E) rejected assessee’s application seeking registration u/s. 12A of the Act. As a natural corollary, application seeking approval u/s. 80G of the Act was also rejected.

4. Before us, it is the say of the assessee that though the assessee complied with the first show cause notice issued by ld. CIT(E), however, it could not comply with the subsequent show cause notices, because of unavoidable circumstances. However, ld. Counsel assured that given an opportunity, assessee will comply with all the queries raised by ld. CIT(E).

5. The ld. DR submitted, in case the assessee is in a position to comply with the queries raised by the competent authority, the matter may be re-examined by him.

6. Having considered rival submissions, we find, the only reason based on which assessee’s applications seeking registration u/s. 12AB and approval u/s. 80G of the Act have been rejected is on account of non-furnishing of certain documents/clarifications sought from the assessee. However, before us, ld. Counsel appearing for the assessee has given an assurance that given an opportunity, all the queries raised by the competent authority would be complied with.

7. Considering the above, we are inclined to set aside the impugned orders of the ld. CIT(E) and restore the matters back to him for reconsideration of applications filed, seeking registration u/s. 12AB and approval u/s.80G of the Act on their own merits. Before taking decision on these applications, the assessee may be provided due and reasonable opportunity of being heard. With the afore-said observations, the matters are restored back to ld. CIT(E).

8. In the result, the appeals are allowed for statistical purposes.

Order pronounced in the open court on 15.01.2025

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