2021 (9) TMI 1165 - AT - Income Tax

Exemption u/s 11 - Rejecting the application for registration u/s 12AA(1)(b)(ii) - HELD THAT - CIT (Exemptions) had issued only one letter dated 22.10.2019 calling for certain queries. The assessee could not appear before the ld. CIT(E) on the date fixed for and the CIT (Exemptions) passed the order and rejected the application of the assessee for registration u/s. 12A(1) of the Act. The submission of assessee before us was that the notice dated 22.10.2019, fixing the date of hearing on 4.11.2019 has not been received by the assessee in time; and that all the relevant details as sought for by the ld. CIT(E) had already been filed along with the application for registration under section 12A - one more opportunity should be given to the assessee to explain its case before the ld. CIT (Exemptions). We are of the view from the facts of the case that the assessee has not been given proper and sufficient opportunity before disposing of the application of registration by the ld. CIT (Exemptions). Matter is remitted to the ld. CIT(E) to be decided afresh in accordance with law, within a period of two months from the date of receipt of this order. Appeal of the assessee stands allowed for statistical purposes.

Summary

Issues:
1. Rejection of registration under section 12AA of the Income-tax Act, 1961.
2. Compliance with notice and grounds for rejection.
3. Adequate opportunity for the assessee to present its case.

Analysis:
1. The appeal was against the rejection of registration under section 12AA of the Income-tax Act, 1961 by the ld. Commissioner of Income-tax (Exemption), Lucknow. The grounds of appeal included reasons such as the non-receipt of a notice in time, the charitable nature of the trust, timely filing of relevant details, and lack of sufficient time and opportunity for the assessee to respond.

2. The facts revealed that the assessee trust had filed an application for registration under section 12A(1) of the Act, but failed to comply with specific queries within the given time frame. Consequently, the ld. CIT (Exemptions) rejected the application, assuming the applicant had nothing further to add. The Tribunal noted that the assessee had not received the notice in time and had already submitted the required details with the initial application. It was observed that the assessee was not given proper and sufficient opportunity before the rejection of the registration application.

3. The Tribunal, after hearing the case, decided to remit the matter back to the ld. CIT (Exemptions) for a fresh decision, emphasizing the importance of providing the assessee with due and adequate opportunity to present its case. The Tribunal directed the ld. CIT (Exemptions) to decide the matter afresh within two months from the date of the order, with the expectation of cooperation from the assessee in the proceedings. As a result, the appeal of the assessee was allowed for statistical purposes.

This comprehensive analysis highlights the issues surrounding the rejection of registration under section 12AA of the Income-tax Act, the compliance with notice requirements, and the necessity of providing adequate opportunity for the assessee to present its case, as detailed in the judgment delivered by the Appellate Tribunal ITAT Lucknow.