2022 (5) TMI 828 - AT - Income Tax

Exemption u/s 11 and 12 - CIT(E) rejected the application under Section 80G of the Act for want of necessary evidence on the activities carried by the assessee-trust - HELD THAT - The assessee failed to file the details genuineness of activities and the audited accounts for financial year (F.Y.) 2018-19 and provisional accounts for the period from 01/4/2019 to till filing the application for registration/approval. Before us, neither the officer bearer of the assessee-trust has come forward to explain and substantiate nor filed any written submission. In the statement of fact, the assessee submitted that the assessee was granted certificate u/s 12AA decades ago and assessee is not having any record of physical copy. The assessee is claiming exemption u/s 11 and 12 on the basis of registration under Section 12A of the Act, thus, there was no question of rejection of 80G application. It is also stated that Form 10G is complete and that all information were furnished within due time. We do not find any merit in the statement of fact in absence of any supporting evidence as required by ld. CIT(E) in its various show cause notices as recorded of the impugned order. Therefore, we do not find any merit in the grounds of appeal raised by the assessee and the same is dismissed.

Summary

Issues:
1. Rejection of 80G application by CIT(Exemption) without considering submitted documents.
2. Rejection of 80G application due to non-provision of provisional financial statement.
3. Rejection of 80G application despite providing 12A number and emphasizing on receipt of 12A certificate.

Analysis:
1. The appeal was against the order of the Commissioner of Income Tax (Exemptions) rejecting the 80G application. The appellant claimed that all required documents were submitted manually by speed post. However, the CIT(E) found the information provided insufficient and lacking verification of activities, leading to rejection of the application.

2. The CIT(E) issued notices requesting details and evidence on activities carried out by the trust. Despite multiple opportunities, the appellant failed to provide complete information, including audited accounts for the relevant period. The rejection was based on the absence of verification of objects and activities, preventing the establishment of genuineness, as required for approval under Section 80G(5) of the Act.

3. The appellant argued that the rejection was unjustified as they had a Section 12A certificate and claimed exemption under Sections 11 and 12. However, the Tribunal found the appellant's submissions lacking supporting evidence. The appellant failed to substantiate their case or provide necessary documentation, leading to the dismissal of the appeal and upholding the rejection of the 80G application.

This case highlights the importance of providing complete and verifiable information when applying for tax exemptions. Failure to substantiate activities and provide necessary evidence can result in rejection, as demonstrated by the CIT(E) and upheld by the Tribunal. It serves as a reminder for taxpayers to ensure compliance with documentation requirements to support their claims for tax benefits.