2023 (2) TMI 1367 - AT - Income Tax

Rejecting registration application u/s 12AA and u/s 80G - HELD THAT - According to the CIT(A) note on activity submitted by the assessee was very general without giving any specific details as who were the beneficiaries and where the activities were carried out. CIT has a straightway passed the order rejecting the registration of the assessee, without giving opportunity of being heard. In our opinion, this action of the CIT is not justified. If, he desired to go through the specific activities of the assessee, he should have called for further information from the assessee - Thus we set aside the finding of the Ld. CIT and restore the matter back to him for deciding afresh after providing adequate opportunity of being heard to the assessee. The grounds raised in the appeal are accordingly allowed for statistical purposes. Rejection of registration of the assessee u/s 80G - CIT rejected the application for non-filing specific details of actual activities carried out and non-filing of Registration certificate u/s 12AA or 10(23C) - Assessee has filed general information regarding the genuineness of the activity in respect of the notice issued by the CIT on Income-tax Portal. CIT was not satisfied with the said information and according to him the assessee should have filed specific details of the activities carried out by it including name of the beneficiaries and the places where activity was carried out. But the Ld. CIT without issuing any further notice, rejected the registration of the assessee under section 80G on this ground. Non-registration u/s 12AA - appeal of the assessee against rejection of registration has already been set aside and restored back to the Ld CIT. The action of the CIT of rejection of application u/s 80G of the Act, is in violation of the principle of natural justice. Therefore, in the interest of substantial justice, we feel it appropriate to restore this issue back to the Ld. CIT for deciding afresh - Ground of appeal of the assessee is according allowed for statistical purposes.

Summary

Issues:
Appeal against rejection of registration u/s 12AA of the Income-tax Act, 1961.
Appeal against rejection of registration u/s 80G of the Income-tax Act, 1961.

Analysis:

Appeal against rejection of registration u/s 12AA:
The assessee appealed against the rejection of registration u/s 12AA, citing lack of application of judicial mind, inadequate opportunity to be heard, and rejection based on the absence of specific details on trust activities. The ITAT noted the absence of the assessee during the hearing despite prior notification. The CIT had requested specific information to verify the genuineness of the trust's activities, including details of activities, compliance with laws, and proof of donations received. The CIT found the activities note submitted by the assessee to be general without specific details or supporting evidence, leading to the rejection of registration. The ITAT deemed the CIT's action unjustified for not providing adequate opportunity to be heard and set aside the decision, instructing the CIT to reconsider after granting the assessee a proper hearing.

Appeal against rejection of registration u/s 80G:
Similarly, the appeal against rejection of registration u/s 80G was based on similar grounds of lack of judicial application, inadequate opportunity to be heard, and rejection due to insufficient details on trust activities. The ITAT observed that the CIT rejected the application for not providing specific details of activities and for lacking a registration certificate u/s 12AA or 10(23C) of the Act. Despite the assessee filing general information, the CIT was unsatisfied and required specific details, but without issuing further notice, rejected the registration. The ITAT found this rejection to violate natural justice principles and instructed the issue to be reconsidered by the CIT after granting the assessee a fair hearing. Ultimately, both appeals were allowed for statistical purposes.

In conclusion, the ITAT found the rejection of registration u/s 12AA and u/s 80G to be unjustified due to inadequate opportunity for the assessee to present their case and lack of specific details provided. The ITAT set aside both decisions and instructed the CIT to reevaluate the applications after affording the assessee proper hearings, ensuring compliance with the principles of natural justice.