2023 (8) TMI 1519 - AT - Income Tax

Denial of registration u/s. 12AB - charitable activity or not? - assessee does not filled complete details/documents, such as detailed note on the nature of activities and projects, the details of main charitable/religious undertaken in the last 3 years - HELD THAT - Admittedly, the assessee furnished details about the registration certificate, trust deed and Audit Report for three assessment year and further details. However we find that the Ld. CIT(E) has not contravented exact deficiency in the documents submitted by the assessee and exact nature of clarification, explanation required from the assessee, but rejected the registration application u/s. 12AB of the Act. Further the assessees are existing and carried the objects enumerated in the trust for long time. Therefore considering the facts and circumstances of the case, in order to prevent miscarriage of justice, we find it fit and proper to provide one more opportunity of being heard to the assessee in support of its case for registration of the trust u/s. 12AB of the Act. Therefore we dispose of this appeal by restoring this issue to the file of the Ld. CIT(E) with a direction upon him to provide further opportunity of being heard to the assessee and consider the documents, evidences which the assessee would file as per the notice issued by the Ld. CIT(E) - Appeals filed by the Assessees are allowed for statistical purposes.

Summary

Issues Involved:
Denial of registration under section 12AB of the Income Tax Act, 1961 based on incomplete details submitted by the assessee.

Detailed Analysis:

1. Denial of Registration under Section 12AB:
The judgment involves a batch of six appeals filed by different Assessees challenging the rejection of registration under section 12AB of the Income Tax Act, 1961 by the Commissioner of Income Tax (Exemption), Ahmedabad. The primary issue in all the appeals was the denial of registration based on incomplete details provided by the Assessees.

2. Case Specifics - ITA No. 481/Ahd/2022:
In the lead case, the Assessee failed to provide complete details/documents as requested by the Ld. CIT(E) regarding the nature of activities, application of funds, compliance with relevant laws, and other essential information. Despite multiple opportunities and notices, the Assessee did not furnish the required information, leading to the rejection of the registration application.

3. Grounds of Appeal:
The Assessee appealed against the rejection order, citing errors in law and facts regarding the genuineness of trust activities. The Assessee contended that tangible material submitted during the proceedings was overlooked by the CIT(Exemption), warranting a reevaluation of the registration application.

4. Arguments and Considerations:
During the appeal, the Assessee's counsel presented a Paper Book containing relevant documents, including audit reports and responses to queries raised by the Ld. CIT(E). The Revenue's representative argued that despite opportunities provided, the Assessee failed to submit complete details, justifying the rejection of registration. However, considering the documents submitted and principles of natural justice, the matter was suggested to be reconsidered.

5. Tribunal's Decision:
Upon careful consideration, the Tribunal observed that the Ld. CIT(E) did not specify the deficiencies in the Assessee's documents before rejecting the registration application. Given the long-standing existence of the Assessees and the need to prevent injustice, the Tribunal decided to provide another opportunity for the Assessee to present their case before the Ld. CIT(E) with all necessary documents.

6. Outcome:
The Tribunal allowed the appeal for statistical purposes and directed the Ld. CIT(E) to reevaluate the registration application with a speaking order after considering the Assessee's submissions. The decision in ITA No. 481/Ahd/2022 was deemed applicable to the other appeals with similar issues, resulting in the allowance of all appeals for statistical purposes.

This comprehensive analysis of the judgment highlights the key issues, arguments presented, considerations made by the Tribunal, and the final outcome of the appeals challenging the denial of registration under section 12AB of the Income Tax Act, 1961.