Shanti Bai Chogalal Bhubaji Darlesha Vs CIT (Exemption) (ITAT Jodhpur)
12AB Registration Cannot Be Rejected Merely for Pending RPT Act Registration: ITAT Jodhpur Remands Batch of Trust Cases for Fresh Consideration
The Jodhpur Bench of the Income Tax Appellate Tribunal, Jodhpur Bench allowed a batch of appeals filed by various trusts and societies and set aside the orders of the CIT (Exemptions), Jaipur, which had rejected their applications for registration u/s 12AB.
The CIT(E) had denied registration mainly on two grounds:
(i) the trusts were not registered under the Rajasthan Public Trust Act, 1959 (RPT Act) at the time of application, and
(ii) alleged non-satisfaction about genuineness of activities.
Before the Tribunal, it was shown that in most cases the RPT Act registration was already granted subsequently (after rejection by the CIT(E)) or was pending with the competent authority. The assessees also sought an opportunity to place further material to establish genuineness of activities.
The ITAT held that the CIT(E) acted prematurely and in haste in rejecting the applications solely because RPT Act registration was pending, especially when such registration was later granted. Following its coordinate Bench decision in Jay Durga Brahmani Gaushala Samiti Pally, the Tribunal observed that at the stage of initial registration u/s 12AB, hyper-technical objections should not defeat substantive rights, and principles of natural justice require a fair opportunity.
Accordingly, the Tribunal restored all matters to the file of the CIT(E) with directions to examine the applications de novo, after granting adequate opportunity to the assessees to furnish documents regarding RPT Act registration and genuineness of activities. All appeals were allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT JODHPUR
