2021 (5) TMI 995 - AT - Income Tax

Exemption u/s 11 - Registration application made u/s 12AA denied on the ground of non-submission of certain details - Denial of natural justice - HELD THAT - On one hand the assessee contends that the provisions of principles of natural justices were not followed by the Department and the opportunity of hearing was not properly accorded to the assessee in this case and on the other hand, the facts demonstrate as from the order of the Ld. CIT (Exemption) that he could not arrive at proper satisfaction as regards the genuineness of the activities of the trust since the relevant details as called for by the Ld. CIT (Exemption) were not uploaded in the ITBA portal by the assessee. The provision of section 12AA of the Act mandates that the satisfaction has to be arrived at by the Ld. CIT (Exemption) before granting any registration under the said provisions. The satisfaction can only be arrived at once all the relevant details are placed before him - one more opportunity should be given to the assessee and accordingly, we set-aside the order of the Ld. CIT (Exemption) and restore the matter back to his file for re-adjudication while complying with the principles of natural justice - Appeal of the assessee is allowed for statistical purposes.

Summary

Issues:
1. Rejection of registration u/s 12AA of the Income Tax Act.
2. Allegation of lack of proper opportunity and compliance with principles of natural justice.
3. Requirement of furnishing relevant details for satisfaction under section 12AA.

Issue 1: Rejection of registration u/s 12AA:
The appeal arose from the rejection of registration u/s 12AA by the Ld. CIT (Exemption) due to the assessee's failure to provide credible evidence supporting activities as per section 12AA(1)(a) of the Act. Despite notices requesting information, the assessee did not comply, leading to the rejection of registration. The Tribunal noted the importance of satisfying the genuineness of trust activities before granting registration under section 12AA.

Issue 2: Allegation of lack of opportunity and natural justice:
The assessee contended that they were not given a proper opportunity by the Ld. CIT (Exemption), citing discrepancies in notice dates and the order pronouncement date. The Tribunal considered this argument alongside the Department's requirement for relevant details to assess the trust's activities. It emphasized the need for compliance with principles of natural justice and providing adequate opportunity for the assessee.

Issue 3: Furnishing relevant details for satisfaction under section 12AA:
The Tribunal set aside the Ld. CIT (Exemption)'s order and directed the matter to be re-adjudicated, emphasizing the necessity for the assessee to furnish all relevant details as required by the Department. Referring to specific guidelines from the Hon'ble Apex Court, the Tribunal highlighted the importance of examining the genuineness of trust objects and activities for registration under section 12AA.

In conclusion, the Tribunal allowed the appeal for statistical purposes, emphasizing the need for adherence to principles of natural justice and the provision of all relevant details to assess the genuineness of trust activities for registration under section 12AA of the Income Tax Act.