2022 (1) TMI 685 - AT - Income Tax

Exemption u/s 11 - rejecting approval u/s 12AA - assessee trust while filing the online application for grant of registration u/s 12A had on account of a bonafide mistake, inadvertently stated at Column 5a of its application in Form No. 10A that its case was that of registration under clause (ab) of sub-section (1) of Sec. 12A - HELD THAT - We concur with the ld. A.R that the assessee trust which had filed an application seeking grant of registration u/s 12A of the Act, had inadvertently, on account of a bonafide mistake stated in its application in Form No. 10A that the same was filed under clause (ab) of sub-section (1) to Sec. 12A of the Act. Backed by the aforesaid facts, we are of the considered view, that in all fairness the matter requires to be restored to the file of the ld. CIT(Exemption) for de novo consideration of the assessee s application i.e, after allowing an opportunity to the assessee to rectify the mistakes in the same. We, thus, in terms of our aforesaid observations restore the matter to the file of the CIT(Exemption).. The Ground of appeal No.1 is allowed for statistical purposes.

Summary

Issues:
- Rejection of approval u/s 12AA of the Income Tax Act, 1961 by the Commissioner of Income Tax (Exemption), Pune.
- Failure of the assessee to provide necessary information for registration under clause (ab) of sub-section (1) to Sec. 12A of the Act within the stipulated time period.
- Lack of response from the assessee to notices issued by the CIT(Exemption) regarding clarification on the application filed.
- Request for restoration of the matter to the file of the CIT(Exemption) for re-examination.

Analysis:
1. The appeal was filed by the assessee trust against the order of the Commissioner of Income Tax (Exemption), Pune, declining the grant of registration u/s 12AA of the Act. The assessee contended that the CIT(Exemption) erred in rejecting the approval and failed to understand the facts and contentions properly.

2. The assessee trust had filed an application for registration under clause (ab) of sub-section (1) to Sec. 12A of the Act but failed to provide necessary information within the stipulated time period. The CIT(Exemption) observed this and issued notices to the assessee for clarification. Despite multiple opportunities, the assessee did not respond adequately, leading to the conclusion that the application was not maintainable.

3. The assessee appealed the decision of the CIT(Exemption) before the Tribunal. During the hearing, the authorized representative of the assessee explained that the mention of clause (ab) in the application was due to a bonafide mistake. The Departmental Representative agreed that the issue had not been examined properly and supported the restoration of the matter for re-examination.

4. After considering the submissions and facts, the Tribunal agreed with the assessee's representative that the mention of clause (ab) was a genuine mistake. The Tribunal directed the matter to be restored to the file of the CIT(Exemption) for fresh consideration, allowing the assessee to rectify the errors in the application.

5. Consequently, the appeal was allowed for statistical purposes, and the matter was restored to the CIT(Exemption) for re-examination. The Tribunal emphasized the need for a fair consideration of the application and rectification of the mistakes before a final decision is made.

This detailed analysis covers the issues related to the rejection of approval under section 12AA of the Income Tax Act and the subsequent restoration of the matter for re-examination, highlighting the procedural lapses and the corrective steps taken by the Tribunal.