2022 (9) TMI 1495 - AT - Income Tax

Exemption u/s 11 - Assessment of trust - rejecting application for registration u/s.12A - CIT (E) has rejected the application on the ground that none appeared before the CIT(Exemptions) - HELD THAT - It is pertinent to note that the CIT(Exemptions) has categorically quoted the details required on behalf of the assessee Trust but the assessee within the stipulated time could not produce the same. After going through the appeal records it is found that there is a delay of filing the appeal before us of 568 days which was not explained by the assessee at any point of time. But since the assessee has not been given any opportunity of hearing for placing the documents called for by the CIT (Exemptions) we are condoning the delay and direct the CIT(Exemptions) to consider the application of the assessee filed under Section 12AA after taking cognisance of the details filed before the CIT(Exemptions). Needless to say the assessee be given opportunity of hearing by following the principles of natural justice. We further direct the assessee to co-operate with the proceedings and file the relevant details within the stipulated time given by the CIT(Exemptions) otherwise the CIT(Exemptions) can decide the case according to the law. Assessee appeal is partly allowed for statistical purpose.

Summary

Issues:
1. Rejection of application for registration under Section 12AA of the Income Tax Act, 1961.
2. Grounds raised by the Assessee against the rejection.
3. Lack of appearance before the CIT(Exemptions).
4. Delay in filing the appeal before the Appellate Tribunal.

Issue 1: Rejection of application for registration under Section 12AA:
The appeal was filed by the Assessee against the order of the CIT(Exemptions) rejecting the application for registration under Section 12AA of the Income Tax Act, 1961 for the Assessment Year 2014-15. The Assessee had submitted the application for registration along with detailed activities carried out by the Trust and relevant documents. The rejection by the CIT(Exemptions) was based on the grounds that no one appeared before them during the proceedings.

Issue 2: Grounds raised by the Assessee:
The Assessee raised several grounds in their appeal, arguing that the rejection of the application was erroneous. They contended that the rejection was based on irrelevant considerations and that the information requested was already available in the trust deed submitted with the application. The Assessee also cited various legal precedents to support their claim that registration should not be denied when the trust deed and other documents are genuine, even if there are suspicions regarding income or resources.

Issue 3: Lack of appearance before the CIT(Exemptions):
During the proceedings before the Appellate Tribunal, it was noted that no one appeared on behalf of the Assessee. However, written submissions were filed by the Assessee's Authorized Representative. The lack of appearance before the CIT(Exemptions) was a key factor in the rejection of the registration application, as highlighted by the CIT(Exemptions) and emphasized by the Departmental Representative during the Tribunal hearing.

Issue 4: Delay in filing the appeal before the Appellate Tribunal:
The Appellate Tribunal observed a significant delay of 568 days in filing the appeal by the Assessee, which remained unexplained. Despite the unexplained delay, the Tribunal decided to condone the delay and directed the CIT(Exemptions) to reconsider the application after the Assessee cooperates and provides the relevant details within the stipulated time. The Tribunal emphasized the importance of following the principles of natural justice and giving the Assessee an opportunity to be heard.

In conclusion, the appeal filed by the Assessee was partly allowed for statistical purposes, with directions given to the CIT(Exemptions) to reconsider the application after the Assessee cooperates and provides the necessary details within the specified timeframe.