2012 (7) TMI 461 - AT - Income Tax

Refusal of registration u/s 12AA and 80-G of the Income-tax Act - Assessee submitted the required documents, audited accounts along with copies - specific non compliance is not mentioned - CIT, for want of information, rejected the applications of the applicant for registration u/s 12AA as well as u/s 80G of the I.T. Act Held that - CIT has not indicated the nature of information not furnished and without considering the documents filed by the applicant along with applications for registration u/s 12AA/80G has rejected assessee s claim solely on the ground that applicant could not file most of the informations call for . We find force in the argument of ld. counsel that CIT failed to consider the claim of the applicant on merit, without considering the record and affording opportunity of being heard to the applicant on alleged non compliance matter ramanded to CIT - appeal allowed for statistical purposes only

Summary

Issues:
Refusal of registration under sections 12AA and 80-G of the Income-tax Act.

Analysis:

Issue 1: Refusal of Registration under Section 12AA
The appellant contested the dismissal of the application for registration under section 12AA, claiming that the Commissioner of Income Tax (CIT) wrongly concluded that the trust's aims and objects were not of a charitable nature. The appellant argued that the trust existed solely for educational and charitable purposes, not for profit. The CIT was accused of passing the order hastily and against the provisions of the Income Tax Act. The appellant contended that all required documents were submitted along with audited accounts, and the CIT failed to consider the material furnished. The appellant requested the registration to be granted or the matter to be remanded for a decision on merits after affording a reasonable opportunity to be heard.

Issue 2: Refusal of Registration under Section 80G
Similarly, the appellant challenged the rejection of the application for registration under section 80G, citing similar grounds as in the case of section 12AA. The appellant argued that the CIT wrongly ignored the charitable nature of the trust's aims and objects and passed the order hastily without due consideration of the documents submitted. The appellant requested the registration to be granted or the matter to be remanded for a fresh decision after affording a reasonable opportunity to be heard.

Court's Decision
After hearing the arguments and reviewing the material on record, the court found merit in the appellant's contention that the CIT failed to consider the claims on merit and rejected the applications based solely on alleged non-compliance without specifying the nature of information not furnished. In the interest of natural justice, the court ordered the issues of registration under sections 12AA and 80G to be restored back to the file of the CIT for a fresh decision on merit in accordance with the law, after providing a reasonable opportunity for the appellant to be heard. Consequently, both appeals filed by the appellant were allowed for statistical purposes only.

This judgment highlights the importance of due process and the need for authorities to consider applications for registration under the Income Tax Act on their merits, affording applicants a fair opportunity to present their case before making a decision.